Is An SMS Legally binding ?

Have a friend who was offered an amount for an item when a customer came to his house to view other items and price was discussed via SMS later, since then my friend has decided not to sell the item both due to personel reasons and the fact that it is worth much more than offered, now said customer is sending SMS's saying he is going to sue because an SMS is legally binding ?? is this the case ? I always assumed that the seller has the right to withdraw the item from sale ?? any anvice would be appreciated.

Your friend has nothing to worry about. A sale is not final until a contract has been signed, or an item paid for. IF you read through these forums you will notice that there are many cases like this, eg an agreement was reached on lets say leasing a property, but the vendor pulled out. IT is common practise here to let a sale drag on until the best outcome is reached by the seller.


Furthermore, the customer could have pulled out from the sale just as easily as your friend did. I say, let him waste his many sending soliciter letters. But IMHO the cutomer wont do anything.

Many thanks Rob, that's what I thought but this guy keeps sending SMS messages saying "you better be prepared to pay all legal costs" etc, I have told my friend to ask the police.


Thanks again, any Laywers who can advise ?? yes or no would be ok as an answer

[UPDATE] Please note that fee quotes stated in historic postings may be out-of-date.


Whether a SMS is binding or not is a very important question because it highlights the essence of most enquiries regarding contracts.

A contract covers many different relationship from employment, to renting properties, to the sale of goods and services, so the starting point for an answer as to whether “SMS” creates a “legally binding obligation” can be rephrased as “has a binding contract been agreed?”. The point being that it does not matter whether a contract was made verbally, in handwriting, signed or unsigned via email internet or VOIP; these are simply the methods of communicating the offer and acceptance which are the two essential ingredients of a contract, there are very narrow certain exceptions to this rule which requires specific formats to bind the parties contractually (e.g. transferring interests in land, matters of wills and estates, etc.).

So to answer the questions properly one needs to effectively have a first year law class in contracts where you would look at a whole series of questions on specific full facts disclosed, in order to determine IF a contract actually has arisen. These ingredients start from a determination as to “whether there was an intention between the parties to create legally binding obligations” and moves through the whole question of “whether all aspects of a transaction based on a clear offer to purchase and an acceptance of that offer to purchase were made” and would also include considerations such as “whether communication by email, SMS/electronic means was an acceptable method of coming to an agreement and whether all important aspects of the agreement were made over such meeting”.

As you can see from the above, and easy question to ask and a difficult one to answer because as in most contracts, all depends on “the facts of the case and the documents and evidence available”, in the context of the applicable law.

If you put aside the question of SMS for the moment and consider an example where Party A places an advertisement for sale of his stereo for a thousand dollars; Party B attends the premises, reviews the stereo and makes an offer for a thousand dollars; the owner accepts and the parties agree that the stereo is to be picked up the next day on payment of $1,000 in cash. Then a contract has been formed. If Party B comes back to pick the stereo up, the next day with his thousand dollars in cash and finds that Party A has sold the stereo for $1,500 to Party C, then Party B would have every right to sue Party A for breach of contract. The $500 “profit” that Party A made would give the judge a good indication of the minimum damages Party B should be entitled to. In this example a verbal contract has been formed but a contract could have just as easily been formed by email, SMS or letter; the key point being that all terms of the agreement have been agreed and there is a breach by one party, having already agreed all terms of the contract.

So the essence of your query above is not so much re SMS but rather whether an agreement was made between the parties. The SMS serves to act as the “medium” to express such agreement.


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