“Just confirming by email what we agreed…” How many times have you sent or received an email like this after a business discussion? Perhaps you’ve negotiated delivery terms with a supplier through a quick email exchange, or finalised a client agreement without formal paperwork. But what happens when disagreements arise later – can those casual emails actually bind you or your business to contractual obligations?
The answer might surprise you. Under English law, those seemingly informal email exchanges can indeed create legally binding contracts with real consequences. However, whether your specific email exchange constitutes an enforceable agreement depends on several key factors that every business owner and manager should understand.
For any agreement to be legally binding – whether reached through formal documents, handshakes, or email exchanges – it must contain these fundamental elements:
A contract requires one party to make a clear offer that is unambiguously accepted by the other party. In email exchanges, this could manifest as:
The key issue is whether, objectively viewed, both parties intended to be bound by what was discussed. Phrases like “Subject to contract” or “Without prejudice” can indicate that discussions remain preliminary and non-binding.
Valid contracts require something of value to be exchanged between the parties. This “consideration” doesn’t need to be monetary – it could be services, goods, or even a promise to do (or not do) something.
In commercial contexts, consideration is rarely an obstacle as business arrangements typically involve clear exchanges of value. An email agreeing to provide services at a specified price would generally satisfy this requirement.
The parties must intend their agreement to have legal consequences. In business contexts, this intention is usually presumed – when companies negotiate, the law generally assumes they intend to create binding obligations.
However, certain email language might indicate a lack of intention to form a binding contract:
These phrases can help signal that negotiations are still ongoing and that formal documentation is expected before any binding commitment arises.
For a contract to be enforceable, its essential terms must be sufficiently clear and certain. Vague or ambiguous email exchanges might fail this requirement.
Critical terms that should be clear include:
“Email has revolutionised business communication, allowing for faster negotiations and greater flexibility. However, this convenience brings potential risks when informal exchanges inadvertently create binding obligations. With proper understanding and careful practices, businesses can harness the efficiency of email while maintaining appropriate contractual control.”
Satish Jakhu, Director and Head of Litigation Department
The courts typically take a pragmatic approach when determining whether email communications create binding contracts. Here are some scenarios where emails are more likely to be deemed legally binding:
When emails contain all essential terms and show clear agreement, courts are more likely to find a binding contract exists. For example, an email exchange where:
This scenario presents strong evidence of a binding contract, even without formal documentation.
Emails containing electronic signatures provide stronger evidence of contractual intent. Under the Electronic Communications Act 2000 and the EU eIDAS Regulation (which continues to apply post-Brexit), electronic signatures are legally valid.
An electronic signature might be:
If parties start performing the agreed terms after an email exchange, this strongly suggests a binding contract exists. Actions like:
These acts of performance can effectively affirm that both parties considered themselves bound by the email agreement.
Despite the potential for emails to create binding contracts, several factors can undermine their enforceability:
Certain types of contracts require specific formalities by law, regardless of the parties’ intentions:
Email exchanges alone may not satisfy these statutory requirements.
A common challenge to email contracts involves questioning whether the person sending the email had proper authority to bind their organisation. This might arise when:
Courts will consider whether the sender had actual or apparent authority to enter into the agreement on behalf of their organisation.
Email negotiations often evolve through multiple messages, sometimes involving several people. This can lead to uncertainty about:
The more fragmented and unclear the email trail, the less likely it will be considered a binding contract.
To protect your business interests while leveraging the convenience of email communications, consider these practices:
If you don’t intend emails to create binding obligations:
Conversely, if you do want to create binding terms:
Establish clear protocols for who can make commitments on behalf of your business:
Even when using email for efficiency:
Consistency in behavior reinforces your position:
At RLK Solicitors, we regularly advise businesses on contract formation issues, including the enforceability of email agreements. Our services include:
We take a practical, business-focused approach to these issues, helping you balance commercial efficiency with appropriate legal protection.
If you’re concerned about the contractual implications of your business email communications or face a dispute involving email agreements, contact RLK Solicitors for practical guidance. Our experienced commercial team can help you understand your position and develop appropriate strategies.
Call us on 0121 450 7800 or email enquiries@rlksolicitors.com to arrange a consultation.
For more information about our commercial contract services, visit our litigation services page.
Richard is a highly experienced litigator with over 20 years' experience across Corporate & Commercial Litigation. Richard has held senior roles in firms such as Knights, Emms Gilmore Liberson where he was Head of Commercial Litigation. Syndney Mitchell, Gateley Plc and Bell Lax Solicitors.
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