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Texas Restaurant Law

Can An Email Bind Your Restaurant Like A Contract?

Posted in Acquisitions, Commentary, Contracts, Employees & Waitstaff, Liability, Litigation, Negotiation, Recent Law Trends, Vendors

We all think of email as a convenience. The same is true for text messages. These are just easy ways to communicate. They don’t really mean anything. Right? Wrong!

Email and text messages are some of the most dangerous tools created. They are powerful. They are permanent. And in Texas, they are binding.

Don’t believe this? You should. Here’s why:

The Texas Electronic Transactions Act

In 2002, the Texas legislature enacted the Texas Electronic Transactions Act (the “ETA” or “Act”). Its purpose was to make it easier to transact business electronically. However, most people and even many lawyers have not heard of the Act. The scary thing is that it might be endangering your business without your knowledge. This is because the ETA does not simply let you sign a contract and send it by email or let you agree to credit card charges over the Internet. Instead, it can make everything you say in an email, voicemail or a text message a binding contract.

I know that I just lost a few readers. You don’t believe this. It can’t be true! BUT, it is true.

Examples Of The Binding Nature Of Emails And Text Messages

The unintended nature of binding emails, voicemails and text messages affects us all. See the following examples:

  1. You leave a voicemail for a vendor agreeing to “a few extra charges” for alcohol this week. – You could be bound!
  2. You text an employee and tell her that coming in late is “no big deal.” – You could be bound!
  3. Your real estate broker sends an email to your landlord (without asking you) and tells your landlord that 2 (instead of 3) years for your renewal should be fine with you. – You could be bound!
  4. You leave a voicemail for your neighbor saying, “We really should share our parking.” – You could be bound!
  5. At lunch, an employee records you saying, “All my employees are worth $20 per hour!” – You could be bound!

Please note the ambiguous language in each example above. Also note that none of these examples show the intent to be bound. Still, there are possible facts outside of each of these examples that could make each one binding.

Of course, the opposite is true, as well. If any of these examples were reversed, you could use that to your advantage to bind others.

While these examples are probably not the intended consequence of the Electronic Transactions Act, its required breadth to allow us to contract electronically causes some unfortunate results.

Have you made a contract like the ones above? By voicemail? By email? By text? Please share your experiences!

About the author: Matthew Sanderson is a restaurant lawyer in Texas. “Good service with a smile” is his motto. Click here to find out more about Matthew Sanderson’s legal practice and how he can help you today. Follow him on Twitter @dealattorney.