Paper Example on Business Law: E-mails as Contracts

Introduction

In the case of In Re: Lehman Brothers Holdings Inc., the main parties are Lehman Brothers Holdings Inc. (appellants) and Shinhan Bank (appellees). In 2010, these parties entered into a settlement after a bankruptcy court issued an order requiring Shinhan Bank to pay the Lehman Brothers Holdings (Corrigan n.p.). According to the court papers, the two parties engaged in email communications for many weeks and in 2016, Shinhan Bank's lawyer sent an email to a lawyer representing Lehman stating that Shinhan had completed and confirmed the internal approval process and that the parties would sign the agreement after some days (Corrigan n.p.). The settlement amount was never disclosed to Lehman and no document was signed by the parties to seal and conclude the agreement. Shinhan Bank then refused to enforce the settlement agreement claiming that deal was invalid on the basis that no full execution took place. Despite these claims, a Circuit judge held that from the emails that the Attorneys of Shinhan sent to Lehman Bank, it was evident that the parties had entered into a valid binding contract.

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The main requirements of a valid and enforceable contract include an offer, acceptance, consideration, intention to create legal relations, capacity, legality, parties, consent, and mutuality. An offer refers to an invitation by an offeror to the offeree to enter into a binding agreement with them while acceptance is the offeree's unequivocal statement agreeing to be bound by the terms of the offer. Consideration refers to what the parties to a contract have bargained for. That is, consideration is something of value that one party foregoes or parts with and the other party benefits from or gains, such as a promise to pay (Steinberger n.p.). Also, for a contract to be binding, the parties must have intended to be bound by its terms and the subject matter of the contract must be legal under the relevant laws. In Cont'l Ins. Co. v. Atl. Cas. Ins. Co. (2010), the court stated the principle that under contract law, the intention of the parties should be given precedence or weight when interpreting a contract. According to Steinberger, the parties should also have the capacity to enter into a contract, consent voluntarily to its terms, and have a mutual agreement or meeting of minds (n.p.).

Where a party to a contract drags its feet for weeks on signing a contract as was the case here with Lehman Brothers Holdings Inc., the court cannot force them into the agreement where they have not signed or appended their signature on the contract. For, the general legal principle of contract law is that parties must enter into a contract willingly and voluntarily without any undue influence and pressure from any source, including the courts. Also, it is a trite law that a court of law cannot purport to write a contract for the parties or attempt to force them into an agreement which they do not intend to be bound by since intention to contract is one of the fundamental elements of a binding contract. Hence, the judge's decision to hold Lehman's "feet to the fire" by forcing them into the agreement even without a signature could be challenged as unlawful. However, since the agreement had been reached by a mediator, the court in such cases reserves the right to compel parties to honor the decision of a mediator as a way of promoting alternative dispute resolution. What an appellate court would look at should this decision be challenged in higher court is Lehman's intention in dragging is feet before signing the agreement. If the appellate court finds that Lehman had a malicious intent such as the intention to delay the proceedings, defeat the purpose of the contract and the mediation, and to waste time, then the decision will be upheld as lawful.

By "performance tweak s don't count as a lack of agreement," what the judge meant within the context of her statement is that a mere change, twist, or improvement in a contract does not necessarily affect the terms of a contract since they relate to performance rather than the actual terms of an agreement. It is only where changes made to a contract related to and affect the terms of the contract that the whole agreement is affected. However, where the parties to an agreement or one of them improves on its terms relating to things like negotiation or dispute resolution clauses, this does not in itself adversely affect the entire agreement or count as lack of one. Only in cases where the performance tweaks relate to the parties' rights and responsibilities under the contract can such tweaks count as a lack of agreement. Hence, I agree with the judge's statement since it represents a correct construction of the terms of a contract and their performance.

An e-mail would be sufficient to substantiate an agreement such that no physical signature would be required for a deal to be made as per the court's decision in Lehman Brothers case. Moreover, according to Menes, under the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act, agreements concluded electronically through emails are valid and enforceable (n.p.). The UETA, in particular, provides that merely because a contract or signature is in an electronic form does not in itself deny it a legal effect. The general legal principle under these laws is also that the name of the sender printed in the "Form" line, in the email's signature block, or at the end of the email constitutes a sufficient electronic signature that can bind a vendor to a contract negotiated through email communication (Menes n.p.). However, the legal principle under these laws is only applicable to cases where the parties have agreed that their business transactions will be conducted by electronic means. The fact that emails can be sufficient to support the existence of a valid enforceable contract has also been affirmed by courts in various cases, such as Steens v. Publicis (2008) and Forcelli v. Gelco Corp. )2013). In Forcelli, the court stated that owing to the widespread nature of the usage of emails as forms of written communication by both businesses and individuals in the contemporary society, it would not be reasonable to hold that email messages cannot conform to the law of contract and UETA merely because of the inability to physically sign them. Further, according to Hertzfeld, the decision in Forcelli is a reminder that email communications are enough to form binding agreements and hence appropriate precautions should be taken by businesses to avoid being bound by unintentional messages (n.p.).

The spirit of the law means those ideas or concepts and legal meanings that the drafters of particular laws intended and wished to have the effect (U.S. Legal n.p.). That is, the spirit of any law is the lawmaker's or framer's purpose and intent, the determination of which is to be made by considering the whole context of the law particular law in question. To ascertain the spirit of the law, one looks at the letters used in the law and the circumstances that surround the enactment of that law. In other words, it is the mischief that the legislature wanted to avoid or the objective it intended to accomplish by enacting the law. On its part, the letter of the law refers to the precise wording of a particular law such as a statute (Dictionary.com n.p.). In determining the letter of the law, the court looks at the exact words used by Congress and tries to put them into their context to know what was meant by particular phrases, words, and provisions. Hence, in a contract, the intentions of both parties could be sufficient enough to create an agreement where the parties have clearly stated the purpose of their agreement or where this specific intent can be gleaned and inferred from the wording of the contract. For instance, where the parties have explicitly stated that any disputes arising out of the contract shall be resolved through a mediation or arbitration process, this is the intention of the parties which the court must give effect to unless that particular clause is found to be invalid. The general legal principle of contract law is that a court should always give effect to the intention of the parties as reflected in the language of the contract document signed by the parties. The invention may also be inferred from the parties' conduct or documents and communications exchanged between them in cases where it is not clearly stated in the agreement between them.

Conclusion

In summary, as a judge, in this case, my conclusion is that email communications are sufficient to create legally enforceable and binding contract between parties where the intention to be bound is clearly stated in the contract or where it can be presumed from the conduct of the parties. In the case of In Re Lehman Brothers Holdings Inc., in particular, even though the parties never signed the settlement agreement, a binding contract came into being since the message from Shinhan's attorneys to Lehman brothers' lawyers was a clear indication of the intention to enter into an enforceable agreement. Any reasonable bystander would interpret the email message as a confirmation that Shinhan Bank had agreed to settle.

Works Cited

Corrigan, Tom. "Judge Rules Lehman Settlement, Affirmed in Emails, Is Enforceable." Cetu News, 4 Aug. 2017, http://www.cetusnews.com/business/Judge-Rules-Lehman-Settlement--Affirmed-in-Emails--Is-Enforceable-.H1XmXMmWvW.html. Accessed 21 Nov. 2018

Dictionary.com. "Letter of the Law." Dictionary.com, n.d., https://www.dictionary.com/browse/letter-of-the-law

Herzfeld, Oliver. "Are Your Emails Enforceable Contracts?" Forbes, 9 Dec. 2013, https://www.forbes.com/sites/oliverherzfeld/2013/12/09/are-your-emails-enforceable-contracts/. Accessed 21 Nov. 2018

Menes, Paul. "What Do You Mean We Have A Contract?! How to Prevent an Email Exchange From Inadvertently Becoming a Binding Contract." Law Gives, 1 Apr. 2015, https://www.lawgives.com/guide/551c797e777777655d8e0000/What-Do-You-Mean-We-Have-A-Contract-How-to-Prevent-an-Email-Exchange-From-Inadvertently-Becoming-a-Binding-Contract. Accessed 21 Nov. 2018

Steinberger, Jeffrey. "Is This Contract Valid?" Entrepreneur, 28 Feb. 2007, https://www.entrepreneur.com/author/jeffrey-steinberger. Accessed 21 Nov. 2018

U.S. Legal. (n.d.). "Spirit of the Law and Legal Definition." USLEGAL.COM, n.d., https://definitions.uslegal.com/s/spirit-of-the-law/. Accessed 21 Nov. 2018