In this episode we discuss the concept of intent in email negotiations. How does intent become legally binding via email communications?
Matthew Karakoulakis explains that in today’s world of digital communications most negotiations are done via email. And this can present some legal traps to parties involved.
He specifies that even when negotiating via email, 5 key requirements have to be met for contacts to become binding. There must be:
1- Offer
2- Acceptance of the offer
3- Parties to the contract
4- Consideration
5- Intention for the parties to enter in a legally binding relationship
To illustrate the dangers of email communications Matthew Karakoulakis looks at one landmark case: Stellar PTY Ltd and another against the North Queensland Fuel PTY Ltd.
This case demonstrates how a court looks at intention to contract, it also looks at how an email communication can form the basis of a contract and the type of email communications that form the basis for negotiations.
This case showed that it is very important to make it clear in an email communication, what is intended to be legally binding and to make it clear when a contract is legally formed while engaging in negotiations.
Take away message: when engaging in email negotiations make sure that the emails are very clear, written clearly in unambiguous terms and specify the intent to enter into a contract.
