by Mert Buckley

Most people know that a real estate contract must be in writing and signed in order to be enforceable. The legal term is that it must be “signed by the party to be charged.” An email, under the right circumstances, can be binding as a signature, but not in the following case.

Tanya Coltrane, the owner of real estate, emailed to Sigg an unsigned “offer to purchase” the Coltranes’ real estate. The document also said Coltranes had “the right to reject any and all bids.” Sigg signed the document and deposited 10% of the purchase price into Coltranes’ bank account. The Coltranes later sold the property to someone else, returning Sigg’s deposit to her. Sigg then sued for specific performance, taking the position that the Coltranes signed the document electronically by emailing it to Sigg. Both the trial court and the Court of Appeals ruled for Coltranes, finding they never signed the contract.

Kansas law provides that “no action shall be brought...upon any contract for the sale of lands...unless the agreement...shall be in writing and signed by the party to be charged therewith....” Here, Coltranes had not signed any documents in the traditional sense. Sigg argued the email transmission constituted an electronic signature under the Uniform Electronic Transactions Act (K.S.A. 16-1601 et seq.).

The Electronic Transactions Act defines an electronic signature as “an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” But there was no such sound, symbol or process in this case. The Court of Appeals said that simply sending the offer to purchase as an attachment by email to the daughter of Sigg’s real estate agent did not constitute a signature under the Act.

The Court also noted the Electronic Transactions Act only applies to transactions where the parties agree to conduct the transaction by electronic means. Whether they “agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties conduct.” The Court said there was “absolutely nothing” to indicate the parties agreed to conduct the transaction by electronic means. Sigg v. Coltrane, ____ Kan. App. 2d ____, ____ P. 3d ____ , 2010 WL 5095831.

Our Comments: The seller only emailed an unsigned contract to a prospective buyer. The buyer signed it, emailed it back, and then claimed a contract had been made. This seems like quite a stretch, to claim a contract had been formed. The Court is saying here that just emailing an unsigned contract does not amount to signing the contract as long as there is nothing in the email message, surrounding circumstances or parties’ conduct to indicate that the person sending the unsigned contract has “signed” it by transmitting the email.

(Article appeared in Adams Jones March 2011 Newsletter)