It's Settled - via Email

Be wary of your electronic communications regarding settlement -- they may bind you to an agreement.  That's the basis of the ruling in Basis Technology Corp. vs. Amazon.com Inc., 2006-P-1048.  The Jan. 7 decision serves as a reminder to lawyers that e-mail settlements carry the same weight as deals on paper.

Citing the trial judge's decision to terminate the trial instead of suspending it for exploratory negotiations, Associate Justice Mitchell J. Sikora Jr. rejected Amazon's argument of characterizing the e-mail exchange as a "framework" causing the "suspen[sion]" of the trial and forming a "starting point" toward a "final settlement."

The Appeals Court ruling was based on an e-mail exchange between Basis and Amazon during mid-trial at the lower court (Basis Technology Corp. v. Amazon.com Inc, No. SUCV2003-02246 (Suffolk Co., Mass., Super Ct.)). It contained six different points which make up the essential business terms of the settlement agreement:

  • Amazon's agreement to pay Basis for a certain sum
  • Amazon's exercise of its conversion rights pursuant to the terms set forth in a stock purchase agreement between Amazon and Basis
  • Amazon's relinquishment of all its rights held as a share holder as set forth in the settlement agreement
  • Basis's permission to use the Amazon name and logo on its website
  • Amazon's removal of Basis from any and all 'do not use' lists or 'blacklists' set forth in the settlement agreement
  • Amazon and Basis exhange of comprehensive releases of all claims

As Nimmer and Towle stated in their treatise The Law of Electronic Commercial Transactions, "mutual conduct associated with online systems establishes a contractual arrangment online in the same way that conduct in other environment does, if the conduct manifests the existence of a contract. Receipt of valuable information, goods, or services, payments for it, compliance with mutual commitments, and like conduct may do so." (Raymond T. Nimmer and Holly K. Towle, The Law of Electronic Commercial Transactions, A.S. Pratt & Sons. ¶ 5.03)

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