Legal Question in Business Law in Nevada

Are all eMail messages binding contracts?

If an employee of business Beta makes an offer to buy an corporate asset of company Alpha - and an employee of corporation Alpha agrees to the price - but then learns from his corporation's president that the prior owner of the asset had a right of first refusal in his original sale - so employee of Alpha informs Beta that he didn't know that the original owner has this right (as he's not a company officer) and has now exercised it and demands the asset back - If no money has exchanged hands and no formal written corporate contract was yet drawn up, is the employee's email a complete contract that Beta can force Alpha to sell to them after all? After all, a corporation would insist on a formal contract for the sale of an important asset, to be signed by an officer anyway. Is the acceptance of the purchase price via email a legally binding corporate contract?


Asked on 8/10/02, 2:56 am

1 Answer from Attorneys

Rick Williams Law Offices of Frederick D. (Rick) Williams, Chtd.

Re: Are all eMail messages binding contracts?

The answer here would depend, in large part, on the position held by the employee who "accepted" the offer. If he is not an authorized representative of the corporation, and the intended purchaser of the asset cannot legitimately claim that he believed he was, the contract may never have been formed for lack of such authority. Upon notifying the putative purchaser that he DID NOT have authority, any acceptance would have been withdrawn, and unless the "wannabe buyer" could demonstrate he was damaged by his reliance on the purported acceptance, he would have no real claim.

Bottom line . . . if you want to buy a corporate asset, make sure the person with whom you are dealing has ACTUAL authority to speak for the corporation before entering any kind of contract - email or otherwise. There is also a strong argument that the prior agreement with the "first right" purchaser supercedes the email contract, making the latter voidable at the discretion of the person holding that first right of refusal.

Contact my office if you feel you have a fight on your hands! I love to scrap it out on matters such as this.

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Answered on 8/10/02, 8:36 pm


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