I’ve written on occasion about the effectiveness of electronic communications to create binding contracts. For example, in Contracts Quiz: Is This Email Settlement Binding? I discuss a recent case in which a court found that an exchange of emails created a binding settlement agreement, and “NO LIMIT” + “Awesome!” = Contract Modification considers a pithy instant message conversation that modified a written contract. Not all electronic communications that purport to have legal consequences are effective, however.
Venkat Balalsubramani wrote about a recent case where an email exchange was held not to create a contract in Email That Says “Done … thanks!” Doesn’t Transfer Copyrights — MVP Entertainment v. Frost. Here’s an excerpt from Venkat’s description of the facts:
This case involved an alleged agreement to transfer rights in the book titled “The Match: The Day the Game of Golf Changed Forever.” MVP wanted to purchase rights in the book and turn it into a movie. Attorneys for the parties exchanged emails. The lawyer for MVP sent an email (to the author’s lawyer) with proposed terms, and asked whether “this is okay and [he would] send paperwork.” In response, the lawyer for the copyright owner (Alan Wertheimer) said: “done … thanks! Werth.”
When the copyright owner later decided not to allow MVF to make the movie, MVF sued, arguing that the email exchange created a binding agreement. The court held that the email exchange didn’t transfer copyright because section 204 of the Copyright Act requires a writing signed by the copyright owner or the owner’s duly authorized agent. Since Wertheimer didn’t have actual authority to act for the author, the purported transfer of copyright wasn’t valid.
It’s important to note, however, that the result didn’t turn on whether the email was an effective medium to transfer copyright or whether the email at issue was too brief to be effective (the court doesn’t address these issues). Rather, the Copyright Act requires a purported agent to have actual authority to assign the rights, and Wertheimer lacked that authority.