The BUSKLAW Newsletter

Forming (or not forming) a contract in the digital age can be a tricky business. Millennials in particular are more accustomed to negotiating deals not by exchanging offers, counteroffers, and acceptances as email attachments requiring signatures, but by emails, text messages, and social media exchanges. And each of these channels can easily include emojis :  those funny little pictographs that are fast becoming ubiquitous in our digital lives.   But this casual approach can lead to confusion in contract negotiations. Before we discuss how, let's review basic legal principles of forming a contract under Michigan (and many other jurisdictions') law:  Verbal Contracts . Verbal contracts are generally enforceable if their subject matter isn't real estate, or goods priced at $1,000 or more. (Note to my IT clients: software programs are not "goods," so beware informal statements that can be construed to form a license agreement.) But there are problems of provin...

Consider the letter of intent (also known as a "memorandum of understanding," a "preliminary agreement," or other innocuous-sounding title). Some business folks believe that a surefire way to do a deal at the last minute (and no reason to bother their lawyer at 5 PM on a Friday!) is to sign a letter of intent ("LOI"). The typical LOI is a short agreement that states some - but not all - of the terms of the deal, contemplating that the parties will eventually sign a complete or definitive agreement ("DA") that will state all of the deal's provisions, both business and legal. LOIs are inherently troublesome (an "Invention of the Devil" according to one lawyer) because the parties to a LOI may disagree on its legal significance. One party may view the LOI as obligating the parties to sign a DA at a future date, even if a disagreement develops over the provisions in the DA that the LOI didn't address. The other party may regar...