Watch Before You E-mail, Court Says

E-mails are just as binding in real estate negotiations as traditional ink-on-paper contracts, according to a state court ruling in New York regarding a real estate dispute.

“Given the vast growth in the last decade and a half in the number of people and entities regularly using e-mail,” handwriting and e-mail should now basically be considered one and the same, ruled the Appellate Division, First Department of State Supreme Court in Manhattan, N.Y.–which handed down its ruling on Oct. 5, but it mostly went unnoticed by the public. The ruling was appealed this week to New York’s highest court, the Court of Appeals.

The case–Naldi v. Grunberg–stems from accusations of a breach of contract in a commercial real estate transaction. The court’s ruling, which also applies to residential transactions, is expected to bring some clarity to how legally binding e-mail is in real estate.

“As much as communication originally written or typed on paper, an e-mail retrievable from computer storage” is proof of a deal, the court said.

Robert J. Braverman, a Manhattan real estate lawyer, told The New York Times, “you need to be mindful of what it is you are saying in electronic communications.” For example, a broker or seller who uses a phrase such as “$700,000 was more of what I had in mind” in an e-mail “might have a problem,” Braverman says.

Mario J. Suarez, a lawyer at Thompson Hine, says adding a disclaimer on e-mails may help. The e-mail disclaimer may read something like the communications “shall not be deemed an offer, as no documents are binding unless and until executed.”

Source: “E-mail May Be Binding, State Court Rules,” The New York Times (Feb. 17, 2011)