Texas: E-mails Read Together Construed as One Contract | Practical Law

Texas: E-mails Read Together Construed as One Contract | Practical Law

A recent opinion from the Texas Court of Appeals for the Thirteenth District of Texas held that the essential terms of an option contract were present when three e-mail messages exchanged by the parties were read together.

Texas: E-mails Read Together Construed as One Contract

Practical Law Legal Update 4-525-3877 (Approx. 3 pages)

Texas: E-mails Read Together Construed as One Contract

by PLC Commercial
Published on 25 Mar 2013Texas
A recent opinion from the Texas Court of Appeals for the Thirteenth District of Texas held that the essential terms of an option contract were present when three e-mail messages exchanged by the parties were read together.
The Texas Court of Appeals for the Thirteenth District of Texas in Dittman v. Cerone, , at *4 (Tex. App.—Corpus Christi–Edinburg Oct. 31, 2013) held that the essential terms of an option contract for the purchase of real estate were present when three email messages exchanged by the parties were read together.
Appellants argued that a series of three emails exchanged with the appellee's real estate agent could not be incorporated by reference into an option contract because the emails:
  • Were unsigned.
  • Did not plainly refer to each other.
The court rejected this argument, holding that:
  • Instruments pertaining to the same transaction may be read together to ascertain the parties' intent.
  • Multiple documents can be read together to satisfy the statute of frauds.
The court explained that the documents need not contain all the terms of the contract, only the essential terms. The three e-mails, taken together, embodied the essential terms of an option contract because they contained:
  • An offer to provide a two-year option to purchase the property.
  • The price of the offer.
  • Consideration.
The court found that the option contract satisfied the statute of frauds because the e-mails:
  • Contained all of the essential terms of the option contract and that no terms of the agreement were left to future negotiations.
  • Provided means by which the property could be reasonably identified.
  • Supported a finding that the parties intended to conduct business electronically.
This case serves as a reminder that parties should familiarize themselves with the laws in the jurisdiction governing a contract and, if applicable, include an entire agreement clause to increase the likelihood that courts will consider their contract fully integrated. Parties should also be mindful in communicating during the negotiation of deals to ensure that no materials exchanged may be construed as part of the final agreement.
For more information on entire agreement clauses and parol evidence in commercial agreements, see Standard Clauses, General Contract Clauses: Entire Agreement (TX) and Practice Note, UN Convention on Contracts for the International Sale of Goods (CISG).
For more information on amending agreements, see Standard Document, Amendment Agreement.
For more information on general contract and boilerplate, see Standard Clauses, Boilerplate Clauses (TX) and General Contract Clauses Toolkit.