Texas Appeals Court Cites Khoury, Dismisses Trial Court’s Summary Judgment Under UETA

Courts Appellate Digital Commerce Electronic Signatures UETA

On October 3, a three-judge panel of a Texas Court of Appeals reversed and remanded, while affirming in part, a trial court’s decision concerning an alleged breach of contract over a $230 million sale agreement. On appeal were three issues, including a challenge to the grounds on which the trial court granted summary judgement under the Uniform Electronic Transactions Act (UETA). The trial court concluded that the “parties did not agree to conduct business electronically and that the alleged contract did not contain a valid electronic signature.” But the panel reversed the decision, holding that an agreement between parties to conduct transactions by electronic means “need not be explicit” under UETA, and finding that the parties’ email negotiations constituted “at least some evidence that the parties agreed to conduct some of their transactions electronically.” and The panel also cited their earlier decision in Khoury v. Tomlinson, that was previously discussed in InfoBytes, to address the question of whether the emails between the two parties were signed electronically. Khoury ruled that an email satisfied the writing requirement because it was an electronic record, and that the header, which included a “from” field constituted as a signature because that field served the same “authenticating function” as a signature block. Consequently, because there was “at least some evidence that the relevant emails were signed as defined in UETA,” the trial court in this matter erred in granting summary judgment.

Further, because the panel found that there still remain questions regarding whether the parties actually formed an agreement concerning the sale of assets, the panel stated they were unable to determine “as a matter of law, under the particular facts of this case, whether such a contract is illusory.” Thus, the trial court erred in granting summary judgment on these grounds as well.

The remainder of the trial court’s judgments were affirmed, and the case was remanded for further proceedings consistent with the opinion.