(June 2019) - An Arizona court recently ruled that language included in a motor carrier's email signature block became part of the operative contract between the parties. The language at issue referenced and incorporated standard terms and conditions into all business transactions, and was included in the motor carrier's offer of services. The court held that the email signature block, and, consequently, the terms and conditions, became part of the contract between the parties when the offer was unconditionally accepted. Brokers and carriers should take note of the clear benefits of referencing and incorporating their preferred terms and conditions into all of their written communications.

Contract Formation

Generally speaking, to form a valid contract, there must be an offer, acceptance, some form of consideration, and terms specific enough to enable the parties to determine their obligations. Any material revision to an offer by the party receiving the offer constitutes a rejection and counteroffer. These general principles can apply with equal force in the context of email negotiations between motor carriers, brokers, and prospective customers.

Form Email Language Can Become Part of the Offer

When parties are engaged in contract negotiations for services via email, standard form language below a signature line in those emails can be considered part of an offer or counteroffer. A carrier that receives an email offer that includes such standard form language should carefully review and/or expressly reject the referenced terms. The carrier should further protect itself by verifying that the actual signed agreement covers any scenario to which the form language could apply. In addition, the carrier should include an integration clause in the agreement that expressly negates any terms outside the signed agreement.

On the other hand, a carrier should include standard language in its email offers and/or counteroffers that references and incorporates its standard terms and conditions. This standard language should help the carrier avoid situations where a customer might argue that there are no governing terms other than the relatively limited pricing terms in the email body.

For example, in the unpublished Maricopa County Superior Court case, National Odd Shoe Exchange v. Davis Trucking, National Odd Shoe Exchange sued Davis Trucking for alleged damage and loss of shoes being stored at Davis Trucking's facility. Davis Trucking moved to dismiss the case based on a forum selection clause included in its terms and conditions. Davis Trucking noted that during contract negotiations for storage and transportation services, each of Davis Trucking's emails contained the same form language below the signature block:

In the absence of a separate contract signed by both parties, all business transactions are based upon Davis Trucking LLC terms and conditions, available upon request or by visiting our website at www.davistrucking.com. No other terms will apply.

The last email from Davis Trucking during the negotiations (constituting an offer) contained a proposed price for storage services and a proposed price for transportation services within the body of the email, and attached the terms and conditions to be signed. The terms and conditions themselves expressly stated that they governed transportation services, and also included a forum selection clause.

National Odd Shoe Exchange argued that because the language in the terms and conditions governed transportation services, the terms and conditions did not apply to the storage portion of the agreement between the parties. National Odd Shoe Exchange argued that there was a separate contract for storage services. The court disagreed, stating:

Defendant's emails consistently pointed to the Terms & Conditions as applying to "all business transactions." Plaintiff never suggested that its principal expressed to Defendant his understanding that two separate agreements—one for transporting and one for storing—existed. This unspoken understanding cannot form the basis of a contract, particularly considering the undisputed evidence of the parties' negotiations and resulting written agreement.

The court ultimately determined that the terms and conditions applied to all business transactions—including storage services. The court held that because the plaintiff unconditionally accepted Davis Trucking's email offer, including the language incorporating the terms and conditions, the parties created an enforceable contract, complete with the disputed forum selection clause. Because the plaintiff failed to reject the terms and conditions during negotiation, the court reasoned, the plaintiff was bound thereby.

Key Takeaway:

Contract negotiations between brokers, carriers, and customers can spread out over a long period of time and over several email communications. Consequently, parties should carefully review any standard form language contained below the signature line of an offer or counteroffer email to determine whether any additional terms might be included by reference. Carriers and brokers should strongly consider using form language referencing and incorporating their standard terms and conditions in every email or other written correspondence to ensure their remedies are not limited to whatever narrow terms were included in the body of an email.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.