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Adult using a smart phone to text about a real estate contract

Can Text Messages Form a Binding Real Estate Contract?

Adult using a smart phone to text about a real estate contract

In Massachusetts, real estate contracts or agreements must be in writing. Traditionally, this means that a real estate sale agreement must be set out in a purchase and sale agreement, signed by all parties. However, the world has gone digital; this drastically changes this rule. Can text messages form a binding real estate contract? Read on.

The changes began with email

Courts were called upon to consider whether an exchange of emails between a buyer and a seller could create a binding contract. Over time, courts have concluded that email messages exchanged between a prospective buyer and seller can, in fact, constitute a binding contract as long as the emails, taken together, show agreement on specific key points, such as the closing date, the purchase price, the deposit amount, and treatment of contingencies. Parties who may have thought they were simply exploring the possibility of a purchase or sale by email found themselves in a binding contract.

Smart phones continued the issue

The logical next question was whether parties could be bound to a real estate deal as a result of an exchange of text messages. The Land Court has answered that question in the affirmative. Of course, the context of the text messages is important and, as with emails, the essential terms of the deal must be agreed upon. However, a court will consider a string of texts together in considering whether there is a binding agreement between the parties. Thus, all of the essential terms of the deal need not be contained within a single text.

So, can text messages form a binding real estate contract?

The danger here is clear. Through a simple, informal exchange of text messages, a  property owner could inadvertently agree to bind themselves to sell their property or a prospective buyer could inadvertently agree to buy property. The moral of the story is that it is far better to seek legal assistance before you engage in any negotiation concerning real property, even an informal exchange of text messages. So can text messages form a binding real estate contract? Yes. Yes they can.

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