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Whats a commision agreement sent by email from a client to a sole trader worth if things go pear shaped?

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4 Answers

I know that when I needed to change some domain stuff with godaddy I emailed in a signed form with id stuff attached (scanned in). I also know when doing consulting some of the recruiters want an email agreement saying I won't try to work for this company through another recrutier/consulting company. Also I emailed my contract signature page to the hotel prior to having my wedding reception.

So obviously there are areas where the agreement via email has some significance but having said all that I wouldn't buy a house or a car without having an original signed copy agreemnt. Contract law is funny in that verbal is normally sufficient but then you get into the higher priced items where it needs to be in writing, and then some only work if it is in writing and conforms to a standard and recognized by the government. So it depends on your jursidiction obviously having a written agreement of some type is better then verbal.

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There is no one-size-fits-all answer to this, especially not as the original question was a bit light on facts, such as which nation / state the agreement is made in.

In general, and in abstract principle, an email can be just as good as a written and signed contract. What you generally need is:

  • Proof that the parties entered into contract in the legal sense. An email could be accepted for this, especially if: a) it contains clear wording like "confirm that we hereby enter into contract". b) if the parties have a history of using emails for agreements. c) there is no question the email was sent and received.

  • Clarity on what was agreed upon. Email is not much different than paper here. But most likely the email was casually written and not discussed with a lawyer beforehand, so the terms are probably not that clear.

  • An ability to enforce the contract. Again, email is no different than paper here, but it really comes down to who has the strongest negotiation position, and the resources to go to court if needed. Lawsuits are expensive, and huge attention and energy drains.

So emails can be stronger in court than one might think. But you should still absolutely get a real, written contract in place ASAP. With emails there is always a question about the validity of the agreement, with a properly signed contract on paper there is no such question.

I'm no lawyer. If this is real and important, then you should go see a good lawyer.

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Always (and I mean always) say what jurisdiction (if you are in the US then that means state) that you are in because law is like that, local.

There are two parts to your specific question and both are highly sensitive to jurisdiction:

(1) what is the legal position - would an emailed contract be enforceable in court in principle?

(2) what is the practical position - would a court have difficulty accepting the email in evidence?

As to point (1): as far as I know all jurisdictions let you make some kinds of contract not in writing. Plenty of everyday contracts are made orally, or even without words being used (you hold a newspaper up at a street trader and hand over the money). However there are usually some kinds of contract that have to be in writing.

In my own jurisdiction (England and Wales) this is confined to certain kinds of sale and transfer of things like real estate, guarantees and a few other special situations. A consultancy contract would normally be fine if made orally.

There's a second wrinkle here - does your jurisdiction count emails as being as good as writing or differently in some way? Again here in England an email is pretty much just as good as writing because as a general rule we treat electronic documents as being as good as paper documents. That is not true everywhere.

There may also be requirements concerning formalities like signatures and they vary pretty widely too.

Point (2): the practical situation. Emails can, of course, be forged, but then so can a lot of written documents and written signatures for that matter, but there's no getting away from it emails do get forged. My experience of English civil courts is that its pretty rare for there to be a problem over this. There's usually enough surrounding information to make it clear that there was an agreement.

For example if you come to the agreement, do the work, and then the client refuses to pay, a court is going to wonder why you did the work if there was no contract. Difficult for the client to deny there was some kind of contract in place.

There's no harm in a belt & braces approach if you think your clients will be happy with that. Sending a written version of the contract and asking them to sign and return to you (or sending two copies signed by you and asking for the return of one if you think that looks better) may obviously help.

Pretty much all of my contracting (as a lawyer) is done electronically and I haven't had any problems but (i) that's very much how things are done here and (ii) I already know quite a bit about my clients already, so I'm not worried about being defrauded.

On both these points your experience may differ a lot.

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I love these kinds of questions. Funny how I just wrote about "how to hire a co-founder with a tweet", it's the exact same kind of problem: how binding is that?

An e-mail explaining what the commissions are can be very effective to make sure you get paid. But of course, you'd be better off with a real contract.

The e-mail will easily prove the intent and how much commission you were supposed to get. But depending on how it's worded, it may be worth nothing or a lot of money. Think of it as a backup insurance: you're not quite sure if it will help, but just in case, it may turn out to be useful.

Consider these two examples:

Email #1: Dear John, It was great meeting you the other day. Yes, we are definitely looking to bring onboard a sales guys, with commissions in the 30% range. I love your profile and it sounds like a perfect match for the job!

Email #2: Dear John, It was great meeting you the other day. I wanted to confirm that you will be paid 30% commissions on sales you bring us. I think you are a perfect match for the job!

The first e-mail will get you nowhere. The second one is definitely stronger. The key is that the e-mail will be just one piece of evidence, you'll need to show other evidence that together prove that you are due the commissions. Other evidence would be that the company actually treated you as a rep, for instance. Combined, those kinds of elements of proof can go pretty far.

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