Text messages can also be used to negotiate and accept bilateral agreements. Bilateral contracts accepted by SMS, as in writing, have an offer, consideration, contractual capacity and acceptance. In 2016, St. John`s Holdings, LLC vs. Two Electronics, LLC created the precedent for text messages as valid legal documents. This judgment specifies that text messages can be considered legally enforceable as long as they meet the requirements for a bilateral offer, counterparty, capacity and acceptance contract. The Massachusetts Regional Court`s ruling also indicated that these contracts could replace the written contracts on paper and ink, imposed by the Fraud Act, which is enforced by many states. As I said before, text messages are written. However, there is a significant difference between a text message and an email compared to the «signature» requirement.
E-mail messages are often closed with a person`s name or an automatically inserted signature line (with name, company, email address, phone number, etc.). These email closures are all considered «signatures» under the law. However, text messages are almost never closed with a person`s name. It would be if unnerdy sign a text! Unfortunately for the broker, there was no signature. Therefore, there is no signed written agreement that complies with the fraud law. The simplest solution to respond to this progress in corporate culture is to say that no, text messages cannot create legally binding contracts. This is exactly what California has done by adding to the Fraud Act (Assembly Bill 2136) a new language that explicitly states that a text message is considered a volatile e-mail message, insufficient to create a real estate investment contract.  Although there is a limited exception, text messages can provide an essential reflection on whether a contract is concluded, the express exclusion of text messages from the statute resolves much of the potential ambiguity for both California companies and lawyers. However, the average man does not recognize that textual communication can, in some cases, create contractual relationships.