Tenth Circuit Finds Emails Provide Sufficient Evidence of a Contract Reply

E-Commerce News provided by BuckleySandler LLP for informational purposes only, and should not be construed as legal advice on any subject matter.

April 26, 2012

On April 12, the U.S. Court of Appeals for the Tenth Circuit held that a series of emails taken as a whole provided sufficient evidence that the parties intended to form a contract. Republic Bank, Inc. v. West Penn Allegheny Health Sys., Inc., No 10-4145, 2012 WL 1223933 (10th Cir. Apr. 12, 2012). In this case, a Utah bank that acquired certain medical equipment after a borrower defaulted on an equipment lease identified a hospital as a potential buyer. The hospital subsequently made an offer via email to purchase certain pieces of equipment. A bank representative accepted the offer, also by email, and subsequently agreed to prepare a written agreement. Eventually the hospital informed the bank that it would not be able to make the purchase and the bank was forced to auction the equipment. The bank then sued the hospital for breach of contract. The court applied the Uniform Commercial Code to uphold the district court’s ruling that a contract had been formed and breached. The UCC standard relies on “objective, observable manifestations of intent to contract.” Evidence of intent requires a signed writing that need only contain the essential terms of the agreement. In this case, an email from the hospital offering to purchase the items and an email from the bank accepting that offer, combined with multiple, subsequent references to a binding agreement by the bank that the hospital did not refute, as a whole, provided sufficient evidence of a contract.

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