Massachusetts: Emails Fulfill Statute of Frauds Signature Requirements

In real estate transactions, the statute of frauds generally requires that a signed writing be produced in order for the transaction to be valid and enforceable. The statute of frauds applies not only to real estate, but also goods worth more than $500, and guarantees, as well as those that can’t be performed within one year.

As we delve deeper into the electronic age, emails are increasingly used to enter into an confirm numerous transactions on a daily basis. The courts are just beginning to be confronted by the effect of emails, and the law on email communications is rapidly evolving.

In a recent, the Massachusetts Superior Court found that an email exchange among parties pursuing a real estate purchase transaction satisfied the signature requirement embodied in the Statute of Frauds. In Feldberg v. Coxall, buyers’ counsel emailed to seller’s counsel a proposed offer to purchase real estate which included a financing contingency.  The next day, the seller emailed buyer’s counsel directly, stating that if a written approval letter from the buyer’s lender was received by 5 p.m., “I think we are ready to go.”  Buyer’s counsel provided a lender’s commitment letter the same afternoon, before 5 p.m.
The transaction then fell apart, and the buyers ran to court to try to protect their deal.  The seller contended that the email exchange did not satisfy the Statute of Frauds.

In rendering its decision, Court noted that the courts have “not yet set forth rules of the road for the intersection between the seventeenth-century statute of frauds and twenty-first century electronic mail.”  Calling the issue presented by the case one of first impression, the court stated that the Massachusetts Uniform Electronic Transactions Act (“MUETA”), was one attempt to provide those rules of the road to persons involved in real estate transactions.

That statute applies to “transactions between parties each of which has agreed to conduct transactions by electronic means,” and under that statute, whether the parties have so agreed is “determined from the context and surrounding circumstances, including the parties’ conduct.”  MUETA §5.  The Court noted that in using email to conduct negotiations, the parties could be found to have agreed to conduct the transaction by email.

With regard to the signature requirement of the Statute of Frauds, MUETA §7(d) states that “if a law requires a signature, an electronic signature satisfies the law.”  An electronic signature is “an electronic…symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”  MUETA §2.

According to the Court, in an extraordinary finding, both an email signature block, as well as the “from” portion of an email, may constitute a signature under the statute.