On March 31, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in Rhodium Special Opportunity Fund, LLC v. Life Trading Holdco, LLC, 2014 NY Slip Op. 30840(U), addressing whether an exchange of emails created a binding contract under the statute of frauds.
In Rhodium Special Opportunity Fund, the plaintiff hedge fund sued a number of defendants in connection with the “unsuccessful negotiation for the purchase of a $44 million portfolio of forty-five life insurance policies.” The court addressed several issues in deciding the defendants’ motion to dismiss, including the question of whether e-mails could meet the statute of frauds’ requirement that a writing be “subscribed by the party to be charged therewith”:
The New York statute of frauds provides that: “Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking . . . is a contract to pay compensation for services rendered in negotiating a business opportunity . . . .” Courts in New York have held that an email may constitute a writing for the purpose of the statute of frauds. The courts have focused on the requirement of a signature to determine when emails meet the requirement. In Rosenfield v Zerneck, 776 NYS2d 458, 460 (Sup Ct 2004), the court held that typing a name on the bottom of an email indicated authentication in the way that a signature would on paper for the statute of frauds. The act of typing the name matters, as a preprinted signature in an email footer has been held to be insufficient as a signature for an email to meet the statute of frauds. In the instant case, the set of emails had typed signatures that met the signature requirement.
(Internal quotations and citations omitted) (emphasis added).
This decision shows that even an agreement that has to be written under the statute of frauds does not necessarily have to be in the form of a separate document with handwritten signatures.