Before you engage in a mobile or online chat, you should know that anything you say might later be found legally binding, or at least this is the implication of a recent case concerning WhatsApp. The following reviews the details of this case as well as its impact.
What is WhatsApp?
WhatsApp is a freeware messaging app for social communication that people use to send and receive texts, photos, videos, and other digital communication. A division of Facebook, WhatsApp currently has more than 1 billion users in over 180 countries.
The Role of the New York Statute of Frauds
The New York Statute of Frauds states that certain agreements are not enforceable unless they are in writing and signed by the parties to the agreement. Some types of contracts that must have signatures to be enforceable include:
- Contracts that cannot be enforced within one year
- Contracts that involve real property
- Contracts where a party assumes responsibility for someone else’s financial obligations
- A promise to pay a debt discharged bankruptcy
- Contracts for the transfer of property after a person’s death
When it comes to deciding what constitutes a signature, New York courts have held that electronic signatures constitute written signed agreements. Understanding the role that the New York Statute of Fraud plays is critical to understanding the meaning of this case.
How the Case Arose
In October 2019, the Kings County Supreme Court ruled in Spilman v. Matyas that a WhatsApp conversation between two parties satisfied the statute of fraud. The plaintiff sought payment of a debt that was discharged bankruptcy. During the electronic WhatsApp conversation, the debtor acknowledged the existence of the debt and promised to pay the amount.
The party who was owed the debt used this conversation as a legally binding contract because the conversation contained the party’s names and therefore an electronic signature. The party who owed the amount, however, attempted to void the contract by claiming that a WhatsApp conversation was not enforceable under the New York statute of frauds.
In reaching its conclusion, the court compared the Whatsapp conversation to an email exchange and found that even though the defendant did not type his name, the WhatsApp chat contained the party’s electronically printed name. Furthermore, the defendant at no point denied ever making the statements. This led the court to find that the agreement to repay the debt was not barred by the Statute of Frauds. As a result, the court held that the text exchange constituted a legally binding agreement.
What This Case Means for WhatsApp Users
After this case, if you have a conversation on WhatsApp or any other messaging service, you should be mindful that anything you say could later be used as a binding contract. You should be cautious about making any promises when engaging in business or social conversations online.