A recent opinion by the 7th Circuit Court of Appeals addressed the issue of whether an email constitutes a contract. In PFT Roberson, Inc. v. Volvo Trucks North America, Inc., the court held that an email from one party to the other during contract negotiations which left many details open for discussion did not constitute a contract.
Roberson and Volvo discussed an arrangement for Roberson’s purchase and maintenance of new Volvo trucks over a period of several years. The parties exchanged numerous draft contracts, none of which were signed. Roberson later brought suit against Volvo, however, alleging breach of contract. Roberson claimed that an email sent to Volvo entitled “confirmation of our agreement” constituted a contract between the parties. The email was a summary of the status of negotiations between the parties and identified numerous items on which the parties had yet to agree.
Roberson argued the email constituted a contract, because the email did not state the agreement was subject to the items that had not yet been agreed. However, the court found that the email merely called for the negotiation of many open items, and was not an offer which could be accepted to form a contract. The court reasoned the email was not something to which Roberson could respond saying, “I accept.” Rather, the email merely called for additional negotiations over key terms to the agreement instead of being an offer which could be accepted.
This case highlights the importance of creating a formal, written contract, even if negotiations are conducted over email. If a formal document setting forth offer and acceptance of certain terms does not exist, a court may not find the existence of a contract. If you have any questions regarding the enforceability of a contract or whether an email constitutes a contract, please contact a member of the firm