Agreed the deal by email? Turn the thread into a contract

Read the thread from first email to last, list every point you both agreed, and keep only the latest version of each. Put each point in the clause it belongs in, then fill the gaps emails leave, such as late payment, ownership and how the deal ends. Send one document for both sides to sign, with a note listing what the thread never covered.

Is the email thread already a contract?

An email thread can sometimes be a binding contract, but don't rely on it. Whether it is depends on the law that applies and on the usual rules for forming a contract.

In the US, the federal ESIGN Act covers transactions in or affecting interstate or foreign commerce. For those, a contract can't be denied legal effect solely because an electronic record was used to form it. That removes one objection only. The Act has exceptions, such as wills and family law. It doesn't require anyone to use electronic records.

In England and Wales, the Law Commission's 2019 report describes Green v Ireland, a 2011 case about a land deal. The court held a chain of emails wasn't a contract. They set no binding terms, and suggested a formal contract would follow. The same report notes that a name typed at the end of an email can count as a signature where the law requires one. The sender must mean it to authenticate the document.

Even when a thread does count, its terms may sit across many emails and can be read more than one way. A clear document both sides sign cuts that risk.

What do you actually have in the thread?

A deal agreed by email usually arrives as a thread, not a list of terms, with three kinds of point mixed together:

• Agreed: "Yes, $8,400 works."
• Half-agreed: "Should be fine," "let me check with finance."
• Changed later: the price in the second email, replaced by a new one in the ninth.

Replies quote earlier emails, so the old price can sit right below the new one. Drafting is the first stage in how a contract deal runs; here, most of it is already in the thread.

How do you turn the thread into a contract?

To turn an email thread into a contract, work through it in this order:

1. Gather everything. Include side threads, forwarded emails, any quote you sent and notes from calls. Sort it oldest first.
2. List every point. Copy each one into a document or spreadsheet, with the date and who said it.
3. Keep the latest version. Where a point changed, the last message both sides accepted usually governs. Strike out the earlier versions.
4. Flag the half-agreed points. "Should be fine" is unclear, so ask for a plain yes. Put these in [brackets] meanwhile.
5. Place each point in its clause. Use the table below, and start from your usual contract if you have one.
6. Fill the gaps. Add the terms the thread never covered, written as proposals.
7. Swap vague words for numbers. "Roughly," "ASAP" and "when it's done" become dates, amounts and named events. Anything firmer than the thread is a proposal too.
8. Send one document, with a short email that lists what you added or firmed up.

Which clause does each email line belong in?

Most lines in a deal thread map to one clause. The right-hand column is what the email usually leaves open.

Australia's business.gov.au gives the same advice for changes: both sides agree, in writing.

What does the thread usually leave out?

Deal emails often focus on the price, the work and the date, and skip what happens when something goes wrong. Check for these six:

• When payment is due. "The rest when it's done" leaves "done" and the payment period unclear. Name the event and a number of days after the invoice, such as 14.
• What happens if they pay late. Decide whether you pause work, charge a late fee where the law allows one, or both.
• What extra revisions cost. "Two rounds" says nothing about round three. Set a rate, and say you'll confirm before starting.
• When ownership passes. Handing over files isn't the same as transferring copyright, which in the US takes a signed writing. Say what rights transfer, and when, for example once they've paid in full.
• Who signs off the work. Name the person who approves, and say what happens if they don't reply.
• How either side can end it. Australia's business.gov.au suggests covering when it applies, the notice each side gives, and what money is payable.

Flag each new term when you send the draft, so nothing looks slipped in:

What does a thread look like once it's written as clauses?

Here is a made-up thread between Quillmere Studio, a web designer, and its client Vantelle Ceramics:

• March 2, Noor Aldaine at Vantelle: "We'd love the new site live by roughly the end of April. Budget is $7,200 for the six pages. Can we do half up front and the rest when it's done?"
• March 3, you: "That works. The price includes two rounds of changes, and I'll try to get first designs to you within two weeks of the deposit."
• March 9, Noor: "Could we add a stockists page? And we'd like to launch on April 24 for our spring sale."
• March 10, you: "Yes to both. Seven pages comes to $8,400. For the 24th, I'll need your photos and copy by March 27."
• March 10, Noor: "Perfect, go ahead."

Drafting from the March 2 email would give the wrong fee, page count and date. The clauses below use the latest version of each point. Bracketed text is new or firmer than the thread, so list it in your cover email as a proposal.

What mistakes happen when you draft from email?

Three mistakes are easy to make when you draft from email.

When should you get a lawyer?

A short, clear thread for routine work usually doesn't need a lawyer. Get one when:

• The other side says the emails already bind you, on terms you don't accept.
• The thread includes terms you don't fully understand, such as exclusivity, a non-compete, or how rights in your work are assigned or licensed.
• The deal is large for your business, such as several months of revenue.
• The other side is in another country, or wants its own law to apply.

When does drafting from a thread by hand stop working?

Working through a thread by hand is fine for a few weeks of emails between two people. It starts to slip when the thread runs long and several people chime in. It also slips when the deal changed across many emails, or when you draft for several clients a month. Past that point, it's worth handing the first draft to a tool, so your time goes on checking it.

DealMate is an AI contract assistant that takes a deal from first draft to final: describe the deal in a sentence and get a draft built from your templates and clauses; when they send their template, review it from your side and see what's risky; when their redlines come back, compare the versions and see every change and the risk it carries.