Communicating acceptance of a contract by email

QUESTION: I am having a friendly disagreement with a fellow broker about what the effective date of a contract would be if notice of acceptance is sent via email. Let’s say a seller signs an offer and the listing agent scans and emails it to the buyer agent. The email, including the attachment, is sent to the buyer agent at 10 p.m. on Friday and the buyer agent opens and reads the email the following Saturday morning. He thinks the effective date is Saturday and I think it’s Friday. Who’s right?

ANSWER: We believe the effective date of the contract in your hypothetical transaction is likely Friday, the date the email was sent. This answer is based on our understanding of the requirements of the North Carolina Uniform Electronic Transactions Act (“UETA”) and on the assumption that the following facts are present: (1) the Offer to Purchase and Contract (form 2-T)  was used; (2) the buyer agent’s email address was set forth in the “Confirmation of Agency/Notice Addresses” section of the contract; (3) the email was delivered into the buyer agent’s “information processing system” on Friday, (4) the buyer agent could open the email and the attachment, and (5) the listing agent had a reasonable basis to believe that the buyer agent would be able to open and read the email.

UETA provides that a transaction can be conducted by electronic means if the parties have agreed that it can be conducted electronically. Paragraph 21 of form 2-T specifically provides that any notice or communication given in connection with the contract may be given by electronic means communicated to the email address of a party’s agent set forth in the “Notice Information” section of the contract. Thus, if the first two assumed facts listed above are present, it’s clear that the parties to your hypothetical contract have agreed that their transaction can be conducted electronically and that it’s appropriate to send notice of acceptance to the buyer agent’s email address.

Section 66-325 of UETA establishes the time and place that an “electronic record” (in this case, an email) is deemed to be sent and received. According to our reading of the statute, if assumed facts (3) through (5) above are present, the listing agent’s email is deemed to be sent and received on Friday. The fact that the buyer’s agent isn’t aware that the email has been sent until he opens and reads it the next day is irrelevant. As subsection (e) of the statute states, “[a]n electronic record is received…even if no individual is aware of its receipt,” provided that “the sender has a reasonable basis to believe that the record can be opened and read by the recipient.”

As always, if there is a “real life” dispute about the effective date of a contract, the answer would depend on an analysis of all the facts and circumstances, and our thoughts on your question are simply intended to illustrate how UETA might be applied to the formation of a contract using the Offer to Purchase and Contract.

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