Business security

Australia: Email negotiations - Beware, you might already be bound!

Courts are routinely ruling that email negotiations create binding contracts well before any formal documentation is prepared or signed. Recent cases show this as a clear trend. The lesson for negotiating parties is: be aware of the binding nature of emails and use them with extreme care.

In its short life, email has quickly surpassed traditional hard copy letters and faxes to become the universally preferred communication method for businesses and lawyers alike, including in contractual negotiations.

Although the Courts are often perceived as being behind the times, they have in fact responded to this shift in communication by accepting email as a means of creating binding agreements then and there.

However, not all businesses have caught up with this trend. Some still mistakenly believe that what is said or agreed over email is not binding, and that a legally binding contract is only made when a formal written document is signed.