Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

The Perils of Text Message Contract Negotiations

Author: Dan Brecher

Date: July 15, 2015

Key Contacts

Back

With the explosion of smart phones, contract negotiation is no longer confined to business letters, telephone conversations, or even emails. However, are text message contract negotiations the way to go?

For busy business professionals, text message contract negotiations between partners is becoming increasingly common. Unfortunately, it is not the most legally sound way to negotiate a deal.

Many states, including New Jersey, have adopted the Uniform Electronic Transactions Act (“UETA”), which states that a “contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation” and that “[i]f a law requires a record to be in writing, an electronic record satisfies the law.” Courts have also relaxed the rules regarding when an email signature is sufficient to create a contract. However, courts are still determining how best to apply traditional contract law to emails, text messages, and other types of electronic communication.

In any case, the basic principles of contract law still apply. In order for a business contract to be enforceable, there must be a valid offer and acceptance, supported by consideration. If one party sends a text message or email proposing different terms, the offer is considered rejected, and the contract formation process starts fresh. In addition, the parties must also intend to be contractually bound. While intent need not be expressly conveyed in the electronic communication, it must be clear that the parties intended that the agreement be legally binding.

Tips for text message contract negotiations

To avoid a costly breach of contract lawsuit, below are five tips for text message contract negotiations, email or other form of electronic communication:

  • Expressly convey your intentions. The court will analyze what you said during text message contract negotiations, not your subjective intentions, when evaluating whether a valid contract has been formed. Therefore, it is imperative to memorialize everything in writing.  In New York, recent decisions indicate that the court is likely to view whether or not you put your name at the end of your message as an indicator of intent to form an agreement.
  • Put the other party on notice. If you do not want to be bound by the terms discussed via text or email, make it clear to the other party that your electronic correspondence should be considered non-binding, and that any agreement is contingent upon the execution of a physically executed, formal written contract.
  • Clear up any confusion. If you suspect that the other party may be interpreting your email exchange as the basis for a binding contract, it is imperative to take swift action, in writing, to correct any misconceptions.
  • Be mindful of accidental contract amendment. Texts and emails can also amend the terms of an existing agreement. Therefore, it is important to be equally mindful that you do not unknowingly waive or modify an important contract term via electronic correspondence.
  • Train your employees. Make sure your employees understand the risks of negotiating via electronic correspondence, including the unintentional formation of a binding agreement.

As a business owner do you find yourself making text message contract negotiations? If you feel you need to speak to an attorney regarding this issue contact attorney and editor of Business Law News Dan Brecher.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses post image

Buying Commercial Property in New Jersey: Legal Guide for Small Businesses

Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]

Author: Robert L. Baker, Jr.

Link to post with title - "Buying Commercial Property in New Jersey: Legal Guide for Small Businesses"
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities post image

The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities

On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]

Author: Dan Brecher

Link to post with title - "The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities"
Common Legal Mistakes NYC and New Jersey Business Owners Make post image

Common Legal Mistakes NYC and New Jersey Business Owners Make

Operating a business in the New Jersey and New York City metropolitan region offers incredible opportunities, but it also requires navigating a dense and highly regulated legal environment. From entity formation to regulatory compliance, seemingly minor legal oversights can expose business owners to significant risk. In our work with businesses throughout the region, our attorneys […]

Author: Dan Brecher

Link to post with title - "Common Legal Mistakes NYC and New Jersey Business Owners Make"
What Founders Can Learn From Start-up Suits post image

What Founders Can Learn From Start-up Suits

High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]

Author: Dan Brecher

Link to post with title - "What Founders Can Learn From Start-up Suits"
Corporate Governance Reviews: A Practical Guide for New Jersey Companies post image

Corporate Governance Reviews: A Practical Guide for New Jersey Companies

Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]

Author: Ken Hollenbeck

Link to post with title - "Corporate Governance Reviews: A Practical Guide for New Jersey Companies"
What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights post image

What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights

Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]

Author: Robert E. Levy

Link to post with title - "What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!