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 17 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.