Originally published by Charles Sartain.
Co-author Trenton Paterson
Copano Energy, LLC v. Stanley Bujnoch, Life Estate, et al. asked whether an enforceable easement had been established by email. The trial court and court of appeal said yes (here is our report), holding in favor of landowner the Bujnochs. The Texas Supreme Court reversed.
How to almost create a contract by email
- James for Copano approaches the Bujnochs for an easement to construct an additional 24-inch pipeline over an existing easement.
- Schwartz, counsel for the Bujnochs, sends emails, typing his name below the message.
- James creates a plat reflecting the second easement.
- James emails Schwartz, agreeing to pay $70 per foot for the second line, typing his name below the message.
- Schwartz accepts and requests advance notice of survey activities.
- James emails Schwartz, agreeing to pay a Bujnoch party $88 per foot, again typing his name above a signature block that has his job title and contact info.
- Schwartz, through his secretary, proposes a formal amendment to the original easement modifying the description consistent with the parties’ communications.
- James replies “I’m fine with these charges”, typing his name.
- Goolsby, another Copano rep, mails letters offering to pay no more than $25 per foot. No one accepts.
- Eubank, also for Copano, offers Schwartz $20-$40 per foot for the second easement.
- Schwartz replies, “This is not our deal.”
- Eubank replies, “Sorry for the confusion.”
Copano fails to honor the agreement. Bujnochs sue. Copano asserts the Statute of Frauds.
How to satisfy the statute
- There must be a written memorandum which is complete within itself in every material detail, and which contains all of the essential elements of the agreement, so that the contract can be ascertained from the writings without resorting to oral testimony.
- The memorandum need not always be a single document, and courts may determine, as a matter of law, that multiple documents comprise a written contract.
- Where multiple writings are proffered as a single contract, the “essential elements of the agreement” must still be evident from the writings themselves, without resorting to oral testimony.
Why there was no contract
The January emails contained an offer and an acceptance, but failed to specify what is being offered and accepted. Other than the price per foot and the pipeline’s size, the emails had none of the essential elements of the agreement. The text indicated that other terms of the deal may have been discussed in an earlier conversation, but none of the writings give insight into that conversation.
The other essential terms of the alleged agreement were not found in the December emails. This is for two reasons:
- The emails themselves reflected no agreement to be bound by the terms they describe.
- No later writing evidenced an agreement to be bound by the terms stated in the emails.
The chain of December emails was part of James’s request for a meeting between with Schwartz on a later date at which they would discuss a new easement. James merely described what he intended to offer at the meeting. The thread anticipated a future meeting where negotiations may or may not occur.
The future-tense phrasing of the December emails further confirmed the absence of an agreement to be bound by the terms stated therein. James used language such as “Copano will be asking for …”, Copano “will be buying …” . These were not present-tense offers of terms. Writings couched in futuristic language contemplating later negotiations do not satisfy the statute. There was no agreement to be bound in any of the December emails.
Nothing in the January emails reflected an agreement to the terms described in December. The only mention of earlier conversations was that they occurred. There was no evidence of what was discussed, or what terms the parties settled on. The December and January emails did not show with certainty and clarity that the January “acceptance” by Schwartz included the acceptance of terms described in the December emails.
The emails failed to create a written memorandum, complete within itself in every material detail. Copano’s future-tense language illustrated no intent to be bound. The January emails, although evidencing an “acceptance” of some terms, failed to establish what those terms were.
You deserve a musical interlude having nothing to do with email. Apologies to the White Stripes.