Fort Worth Business Press, June 2, 2014 Vol. 26, No. 22 | Page 17

fwbusinesspress.com | June 9 - 15, 2014

ucontracts from page 15
tained and accessed for later reference.

Pitfall of electronic contracting
One of the pitfalls of using electronic communications, such as email,
is the possibility that a party might
accidentally enter into a binding legal
agreement via email. While UETA is
clear that a party cannot be bound to
an electronic contract unless the party
agreed to conduct a transaction by electronic means, it is less clear how a party
can indicate that the party does (or
does not) wish to conduct a transaction
electronically. For example, one might
be surprised to learn that one of the
official comments to the model UETA
statute, the model on which the Texas
UETA was based, notes that it might be
reasonable for a recipient of a business
card which includes a business email
address to infer that the individual
handing out the card has agreed to
conduct business electronically.

Recent Texas case
A recent court case, 2001 Trinity
Fund, LLC v. Carrizo Oil & Gas Inc.,
which was decided by a Texas state

appeals court in Houston, illustrates
the danger of negotiating the terms of
a business transaction over email. In
that case, the trial court analyzed a
series of email messages between two
oil and gas companies and concluded
that the emails collectively constituted
a binding legal agreement to revive
and amend their existing participation
agreement. The emails including statements such as:

serve as a reminder of how easily an
email might be alleged to represent a
binding legal agreement

Conclusion

• “I agree in principle, but need to have
this interest flow directly back to me.”
• “[i]f you are in agreement in principle, then I’m assuming we can work
out the mechanics.”
• “That will work. I will call before the
day is over and give you an exact time.”
• “Yes, has been my final answer. I will
give you the final date ASAP.”
• “As I told you before, I intend on being involved in the drilling program.”
The trial court initially awarded
one of the parties over $10 million in
damages for the other party’s breach of

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the alleged electronic agreement. That
trial court verdict was later overturned
on appeal when the appellate court
reached the opposite conclusion, finding that the evidence was legally insufficient to support the jury’s conclusion
that an electronic agreement existed.
Regardless of the ultimate legal resolution of this particular case, it should

Especially when discussing the terms
of a potential business transaction,
one should be careful in the use of
email and other electronic communications to make clear whether one does
(or does not) intend to enter into an
electronic transaction. When in doubt,
one should consider adding a disclaimer to emails and other electronic communications specifically stating either
(1) one’s desire and intent to enter into
an electronic transaction under UETA,
or (2) one’s desire and intent NOT
to enter into an electronic agreement
under UETA or otherwise, and that any
definitive agreement may only be by
means of a writing on paper signed by
each of the parties.