A contract can be created by e-mail. Both the Uniform Commercial Code and the Uniform Electronic Transactions Act are relevant in determining disputes regarding the formation of e-mail contracts. In Alliance Laundry Systems, LLC v. Thyssenkrupp Materials, NA, Case No. 07C0589 (E.D. Wisc. Aug. 5, 2008), a federal court concluded that, the UCC, not the UETA, governs a contract by an exchange of e-mails.
Join the Internet Law Forum (ILF)
to... discuss, share information and knowledge, questions and doubts... regarding the legal aspects of the Internet. The ILF is ALL about the INTERNET... business, laws and regulations, social media... Sign up to enjoy the benefits of the Free Global membership in the IBLS international community!
In 1996, the National Conference of Commissioners on Uniform State Laws (NCCUSL) authorized a Drafting Committee to "draft an act consistent with but not duplicative of the Uniform Commercial Code (UCC) relating to the use of electronic communications and records in contractual transactions." The proposed Act was entitled the "Electronic Transactions Act.” The Act was adopted by the NCCUSL in 1999.
If a signature or written record is required, an electronic signature or record is sufficient to fill this requirement. Most states and the District of Columbia have adopted some version of the Uniform Electronic Transactions Act (UETA) statute, giving electronic records and signatures the same legal effect as ink signatures and paper records.
Sometimes in a contract action there is a question of whether the UCC or the UETA controls. In the Alliance Laundry case, a plaintiff buyer and a defendant steel company corresponded by e-mail concerning a proposed transaction. When the defendant failed to deliver the steel that the buyer expected, the buyer sued, alleging that a contract was formed by the exchange of e-mails. The defendant argued that the exchanges of e-mails between the parties did not result in the formation of a contract because, under the UETA, a contract cannot be formed electronically without prior agreement. The court rejected the defendant’s contention, noting that the issue of contract formation is governed by Article 2 the UCC and not by the UETA. Citing the Prefatory Note to the UETA, the court emphasized that it is the UCC rather than the UETA that provides the substantive law that determines whether parties form a contract.
This article is only available to members,
click here to learn more
Ira Piltz, Greenpoint Technologies