In the electronic age, when is a deal a deal?

esignatures-real-estateMassachusetts courts have been grappling with the question of “when is a deal a deal” for a long time. Most communication in real estate is now done via email and other electronic means. It was just a matter of time before a court was faced with whether and to what extent emails, and electronic signatures constitute a binding and enforceable agreement to purchase and sell real estate.

Don’t real estate deals need to be in writing?

The Statute of Frauds is the genesis of the saying “always get it in writing.” The ancient law, originating in England, provides that all real estate contracts must be in writing signed by the party (or agent) to be charged. In the old days, application of the Statute was quite simple. If there wasn’t a written agreement signed in ink, there was no binding deal. Now, email makes it much more complicated.

The UETA
In 2004, Massachusetts adopted the Massachusetts Uniform Electronic Transactions Act (UETA), which provides that parties to a real estate transaction may consent to conduct the transaction electronically via email or electronic signature technology if they use such technology in their dealings (which everybody does these days). The UETA requires some form of electronic signature.  Just what exactly constitutes an electronic signature has not yet been fully determined by the courts. In a recent Superior Court case, Feldberg v. Coxall (May 22, 2012),  the judge ruled that an email signature block or even the “from” portion of the email could constitute a valid electronic signature. Accordingly, the judge found that the buyer would at least have the opportunity to make a case that a binding deal had been reached, despite the seller refusing to sign the hard copy offer. Email signature technology in the residential real estate business

Many real estate agents in Massachusetts still work with hard copy contracts signed in ink, hard copies of contracts,  or, at best, electronic copies (PDFs).  I expect this practice will wane. There are a variety of free Internet services that enable you to sign documents electronically. Check out DocuSign.com (which I was able to register for and use in minutes), e-signlive.com, or rightsignature.com. My office of Keller Williams recently started accepting electronic signatures and takes it one step further by using a company called Dotloop. With this system, all the parties to a transaction can register for access to a common electronic file cabinet. Any party can enter a password to access and electronically sign a document.

A deal is still a deal in Massachusetts, but a signature is not what it used to be.

This article is a modified version of the article “Think Before You Hit Send: Emails May Constitute Binding Real Estate Agreement Without Signed Offer.” Many thanks to Attorney Vetstein for allowing me to use his article.  The Mass. Real Estate Law Blog is absolutely one of the best out there.

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