We have litigated some very strange “contracts”, including a construction contract comprised of a series of text messages.  And while we await the day when a party alleges a contract was formed via Instagram posts, the Texas Supreme Court has recently provided some guidance on whether a series of emails (dinosaur technology, I am told by my kids) can comprise a binding contract.

The “contract” at issue in Capano Energy was an easement for a gas pipeline. In 2011, Plaintiffs granted Capano a 30-foot wide easement across their properties for installation and maintenance of a 24-inch gas line.  That contract was never at issue in the lawsuit.  A year later, however, Capano requested a second easement to allow it to construct another 24-inch gas line.  Through a series of emails, various terms and prices were discussed and seemingly accepted.  Except that when Capano decided it no longer needed the second easement, Plaintiffs sued seeking the amounts Capano had offered in the emails.

Plaintiffs main argument that a contract existed relates to two email threads, one written in December and another the following January.  In the December email thread, the law firm representing Plaintiffs in the easement negotiations requested the size of the gas line to be installed in preparation for an in-person meeting to be conducted later that month.  Capano responded that the gas line “will be” 24-inches and that it “will be” laying the line north of the existing pipeline.

The January email thread makes no reference to the December emails or the meeting in December, but instead consists of Capano’s offer of $70 per foot for the easement grant and Plaintiffs’ attorney accepting the offer and authorizing Capano to proceed.  A separate set of letters dated February that Capano sent to Plaintiffs attached an amended plat with the location of the new easement bubbled.  An even later February email thread between Capano and Plaintiffs’ counsel discusses different prices Capano is willing to offer different landowners for the easement.  Plaintiffs did not accept any of those later offers.

Do the December and January email threads, taken together comprise a binding contract?  More to the point, does Capano owe $70 per foot to Plaintiffs for the easement it decided not to use?  In deciding this question, the Texas Supreme Court first recognized that a contract for the sale of real estate must be in writing, complete as to material issues, and contain all the “essential elements” of the contract without resorting to oral testimony (parol evidence).  It also recognized that multiple documents can comprise a written contract even if the parties executed the documents at different times and the documents do not expressly refer to each other.

The Court, however, found that the December and January email threads did not supply the “essential elements” of a binding contract.  The December email thread talked about what “will be”, a “forward-looking” statement that “contemplates a contract will be made in the future.”  That is not sufficient.

As to the January email thread, the Court found that those emails did not contain the “essential elements” of the agreement, either.  The January emails did not reference the December emails or the December in-person meeting, but instead vaguely stated that the agreement was made pursuant “to our conversation earlier”.  To provide proof of what that earlier conversation consisted of, Plaintiffs submitted an affidavit.  But, the Court reiterated that if oral testimony is needed, it definitively proves that all the “essential elements” are not in writing.

Are your email threads or Snapchat posts binding contracts?  The attorneys in our Austin and Dallas offices are available to answer any questions you may have regarding whether your compilation rises to the level of an enforceable agreement.

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