At what point can an e-mail form a contract?


With a substantial number of pre-contractual negotiations taking place via e-mail, it is important to consider at what point an e-mail exchange can form a contract.

There are no specific rules that apply to the formation of contracts via e-mail; the basic rules of contract creation apply. However, understanding how these principles apply will help reduce the risk of unintentionally entering into contracts.

In order to form a contract there must be an offer, acceptance of that offer, consideration (although this is not a requirement in Scots law) and an intention to create legal rights. If these elements can be found through the exchange of e-mails, a legally enforceable contract will have been created.

Case law has shown that the principles of acceptance and the intention to create legal rights have often created difficulties when applied to transactions carried out via e-mail.


When negotiations take place via e-mail, it can be difficult to determine when an offer has been accepted. English law contains two rules of acceptance:

1. the receipt rule, operated so that the contract is formed when the acceptance is received; and
2. the postal rule, operated so that the contract is formed when the acceptance is sent.
E-mails do not fall clearly into either camp and, as such, the point of acceptance is usually determined by the circumstances. If the parties specifically intend to conclude negotiations via e-mail, then appropriate provisions can be included.

The intention to create legal rights

E-mail disclaimers are often used by parties when they do not intend to create legal rights. However, care must be taken when using disclaimers as case law has shown that, even when disclaimers are used, courts will also consider the sequence of e-mails, the language used and the conduct of the transaction when deciding whether a contract has been formed.

When using disclaimers, you should ensure that:

1. the surrounding circumstances to the e-mail do not show a contrary intention;
2. the content of the e-mail is consistent with the disclaimer;
3. the disclaimer includes any attachment to the e-mails (which may, for example, contain the proposed terms and conditions to the contract); and
4. when the intention is to enter into a contract, the disclaimer is removed from the footer.
In addition, when negotiating contracts via e-mail in Scotland, alternative wording should be used which makes clear that the party does not intend to enter into a legally binding contract, as the phrase ‘subject to contract’ has no decided legal meaning.

Recent case law

In the recent case of Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd and another (2012), the Court of Appeal confirmed that an exchange of e-mails can create an enforceable guarantee. Guarantees are a form of contract and must therefore conform to the principles described above. The Court found that the parties intended to be bound by the terms in the e-mails and that these applied even if the parties expected a formal guarantee would be drawn up in the future. The Court also noted that when a person with authority puts his or her name on an e-mail (to indicate that his or her authority is given) it will be treated as a signature even if only the first name or an informal nickname is used.

This case demonstrates how important it is, when negotiating via e-mail, to make it clear that the parties do not intend to be bound until a formal document is drawn up.