Because it specifies the exact terms of agreement for conveying property, a real estate contract is arguably the most important document used in the sale of real property. It identifies in writing the terms and conditions of a real estate transaction and legally binds buyer and seller to fulfill their obligations as outlined in the contract. This article discusses a case where one party argued that a series of emails were sufficient to comply with the Statute of Frauds and contract for the creation of an easement.
The Statute of Frauds was central in the case of Copano Energy, LLC v. Stanley D. Bujnoch, Life Estate, 593 S.W.3d 721 (Tex. Jan. 31, 2020) [18-0044]. In this case, James Sanford, services director of Copano Energy, LLC, negotiated with landowners for the creation of an easement. Copano emailed the landowner’s attorney, Marcus Schwartz, requesting a meeting and sharing details about the planned easement. Following their meeting, Sanford sent another email stating the offered price, which Schwartz accepted.
After that email exchange and during a company merger, a different representative emailed Schwartz with a lower price than was originally offered, and, despite objections from both Schwartz and Sanford, Copano refused to honor the price originally agreed upon in the earlier email exchange. The landowners then sued for breach of contract.
Initially the trial court sided with Copano, based on the Statute of Frauds outlined below. When the landowners appealed that verdict, the court sided with the landowners, saying that the emails were effectively a memorandum of agreement which included the required terms of agreement and which were signed by both parties. When the case was brought to the Texas Supreme Court, however, that verdict was reversed, and the landowner’s case against Copano was once again dismissed. While the Texas Supreme Court decided that the emails in the case at bar did not constitute a contract, the court recognized that certain emails and various other documents may satisfy the Statute of Frauds and create a valid contract. The Statute of Frauds is included below for the convenience of the reader.
Effective: September 1, 2005
V.T.C.A., Bus. & C. § 26.01
§ 26.01. Promise or Agreement Must Be in Writing
(a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is
(1) in writing; and
(2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.
(b) Subsection (a) of this section applies to:
(1) a promise by an executor or administrator to answer out of his own estate for any debt or damage due from his testator or intestate;
(2) a promise by one person to answer for the debt, default, or miscarriage of another person;
(3) an agreement made on consideration of marriage or on consideration of nonmarital conjugal cohabitation;
(4) a contract for the sale of real estate;
(5) a lease of real estate for a term longer than one year;
(6) an agreement which is not to be performed within one year from the date of making the agreement;
(7) a promise or agreement to pay a commission for the sale or purchase of:
(A) an oil or gas mining lease;
(B) an oil or gas royalty;
(C) minerals; or
(D) a mineral interest; and
(8) an agreement, promise, contract, or warranty of cure relating to medical care or results thereof made by a physician or health care provider as defined in Section 74.001, Civil Practice and Remedies Code. This section shall not apply to pharmacists.
Parties should be careful when using emails and texts to negotiate any type of transaction, including real estate. Hiring a lawyer knowledgeable in contract law can help the parties avoid these kinds of painful mistakes.
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