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It is a well-established legal principle that a contract contains promises, for which the failure to adhere to those promises, could result in a remedy under various forms of the law for the aggrieved party. (1) As contracts became a part of business dealings, the extent of this principle found its way into transactions for the sale of goods and property. (2) In recent years, courts have found binding contracts within the email exchanges of parties involved in contract dealings. (3) In St. John's Holdings, LLC v. Two Electronics, LLC, the court held that text messages had the capability of creating binding contracts. (4) Finding that the text messages were signed in a previous memorandum and order, the St. John's Holdings court held that the Statute of Frauds was satisfied even when a sizeable portion of the contractual dealings were handled over text messages. (5)

St. John's Holdings ("SJH") expressed interest in purchasing the Subj ect Property owned by Two Electronics through their real estate broker. (6) Two Electronics' broker received an email containing a "Binding Letter of Intent" from the broker representing SJH to purchase the Subject Property. (7) SJH never signed the first letter and when it sent another letter of intent via email, it failed to sign again. (8) The manager of Two Electronics spoke with his broker to make revisions to the letter of intent, and afterwards sent an email to SJH's broker stating they were ready to proceed, but there were a few issues. (9) The next day, SJH's broker sent an email with the unsigned Final Letter of Intent to Two Electronics' broker, but Two Electronics' manager did not review the document because SJH had again failed to sign. (10)

The same day SJH sent the Final Letter of Intent, a second potential buyer sent Two Electronics an offer to purchase the Subject Property, but for a smaller amount. (11) The following day, Two Electronics' broker sent SJH's broker a text message explaining the normal practice of signing intent letters and asking if SJH could sign and return it. (12) SJH signed multiple copies of the Final Letter of Intent and provided a deposit check for their broker to proceed; SJH's broker notified Two Electronics' broker through a text message. (13) While both parties' brokers conducted a physical meeting to exchange documents, Two Electronics' manager accepted the offer of the third party by completing a written purchase and sale agreement. (14) SJH's broker sent a text message to Two Electronics' broker asking about the status of their negotiation, but Two Electronics notified him that they refused to execute the Letter of Intent. (15)

SJH brought an action against Two Electronics claiming that their rights as a buyer were violated because Two Electronics failed to proceed with the Letter of Intent to purchase the Subject Property. (16) SJH claimed that the text messages and emails were evidence of an agreement between the parties and thus, satisfied the requirements for a valid contract under the Statute of Frauds. (17) The court determined whether the parties simply conducted negotiations for the property or if they created an enforceable contract through electronic communications. (18)

The Statute of Frauds was first introduced into modern law in 1677 by the English Parliament to prevent fraud in contractual dealings. (19) Effectively, it became the law for all territories that fell under English power in the late 1600s through the early 1700s. (20) The original 1677 Statute of Frauds expressly stated what type of dealings were to be governed by the statute, but while it aimed to be a form of protection against fraud, it failed to address dealings that would develop in the future. (21) While the original 1677 version has since been repealed and revised multiple times, the foundational aspect is still used throughout the English sphere of influence today. (22)

The United States used the 1677 Statute of Frauds as a model for its own legislation to protect against fraud in contractual dealings within the States. (23) Although the legislation was not adopted in whole, it was remodeled into different versions to serve each state respectively. (24) While the federal government has not adopted a Statute of Frauds, every state has enacted a statute governing the contractual dealings of parties involved in real estate and other matters. (25)

In Massachusetts, the state legislature enacted a Statute of Frauds governing contracts for the sale or dealings of land. (26) The goal of the Massachusetts version of the Statute of Frauds is to protect all real property transactions and ensure sufficient evidence is present within written documents for land dealings. (27) However, the judiciary has interpreted the statute and determined that oral contracts are an exception to the Massachusetts Statute of Frauds. (28)

Technological change in the form of communication forced the judiciary to decide whether electronic communication in contractual dealings satisfied the Statute of Frauds. (29) To help the courts make those decisions, the Massachusetts legislature adopted the Uniform Electronic Transactions Act, which provided specifications on how to determine whether electronic signatures and contracts sufficiently met the requirements of the Statute of Frauds. (30) As emails became an active part of business dealings, courts held that emails could in fact create binding agreements between parties. (31) Presently, more people have become familiar with using text messages in the business world as a quick way to convey important information in a matter of seconds by pressing a few buttons. (32)

In St. John's Holdings, the issue before the court was whether the parties simply negotiated a transaction of the property or if their electronic communication created a binding and enforceable contract. (33) To address the main issue of whether an enforceable contract was formed, the court first had to determine whether a contract was formed that satisfied the Statute of Frauds. (34) The court noted that traditional contract formation included an offer, acceptance, consideration, an agreement with sufficiently defined terms, and mutual intent to engage in a contractual dealing. (35)

While the court stated the traditional elements of a contract, the

dynamic portion of the court's discussion dealt with whether the text messages exchanged by the parties' brokers constituted a valid writing under the Statute of Frauds. (36) The traditional definition of a writing involves intent and sufficient discussion over the essential terms of the proposed agreement, which are typically present in letters of intent. (37) The joint analysis of Shattuck v. Klotzbach (38) and Feldberg v. Coxall (39) paralleled the facts and the issue of whether a sufficient writing existed in St. John's Holdings. Feldberg and Shattuck addressed the sale of property and what constituted a sufficient electronic writing under the Statute of Frauds. (40) Ultimately, the court found that the text messages were sufficient writings under the Statute of Frauds due to the essential terms regarding the sale and purchase of the property that were discussed, and no changes were made except for the method of acceptance within the text messages. (41) Lastly, the court found that the vital text messages included a signature where previous texts had not. (42)

While some may disagree with the use of text messaging in business dealings, the undisputed facts of St. John's Holdings suggest that this form of communication is capable of becoming a norm in the business world. (43) First, the court properly analyzed the traditional elements of a contract and the requirement of present intent of both parties to enter into an agreement for the sale and purchase of land, which is the practice of other jurisdictions. (44) Next, the court provided an analysis of how a text message could meet the writing requirement of the Statute of Frauds by defining how each element was met. (45) Lastly, the court used detailed reasoning to find that the text message met the signature requirement under the Statute of Frauds, and that the decision aligned with the Uniform Electronic Transactions Act. (46)

By following the traditional elements of a contract, a party arguing that it was not their intent to perform a disputed action can easily be addressed by applying proven methods as to what the parties sought to do within their letters of intent and whether negotiations were no longer needed. (47) Also, by expressly reaffirming the Statute of Frauds requirement that a sale of land be evidenced in writing with the essential terms present, the court allowed the use of other forms of communication, specifically electronic, to be considered in meeting the requirements set forth by the statute. (48) Moreover, in discussing the use of the text message as a sufficient writing, the court set a standard for parties seeking to conduct land dealings to properly consider how they are signing land agreements. (49) This decision joins other jurisdictions' decisions in considering the sufficiency of e-signatures in electronic communications within business dealings. (50)

The finding that the text message amounted to a sufficiently signed writing will allow higher courts in various jurisdictions to begin routinely interpreting electronic communications as sufficient writings under the Statute of Frauds, assuming that all other requirements are met. (51) However, the decision creates a risk that text messages could expand beyond real property sales and into general business dealings, which could cause an increase in claims pertaining to agreements made over text messages. (52) Legal counsels are likely to advise caution as the use of text messages are likely to be subject to similar traditional analysis as used by the court in St. John's Holding. (53)

The court's use of the traditional elements of contract law and the Statute of Frauds led to a fair and accurate decision. In applying those traditional elements, the court was able to address how new communications technology should be considered in light of long-standing precedent. The court prevented major changes to existing law and provided modern approaches in applying the law to future communication methods. Furthermore, the court used emails as an example of how text messages should be viewed in the context of land dealings. The court ruled accurately and has implemented a fair and firm ruling that many jurisdictions should follow.

(1) See Restatement (Second) of Contracts: Contract Defined [section] 1 (1981) (providing general definition of contract). "A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. " Id.

(2) See Uniform Commercial Code [section] 2-204 (1952) (stating statutory elements of contracts for sale of goods). U.C.C. [section] 2-204 states:

(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.

(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

Id.; see also Aaron Hall, The Uniform Commercial Code: What it Means to Your Business, Aaron Hall, (last visited Mar. 14, 2019) (providing example of how UCC is involved with property transactions). The example provides:
   If a business is selling you property, you should check to see if
   there is a filed UCC form showing a secured interest in the
   property before you sign a contract. Also, in the contract, you may
   want the seller to represent that there is no secured interest in
   the property.


(3) See Forcelli v. Gelco Corp., 972 N.Y.S.2d 570, 575 (N.Y. App. Div. 2013) (finding valid written settlement in email communications). The court stated:
   Morever [sic], given the now widespread use of email as a form of
   written communication in both personal and business affairs, it
   would be unreasonable to conclude that email messages are incapable
   of conforming to the criteria of CPLR 2104 simply because they
   cannot be physically signed in a traditional fashion....


(4) See St. John's Holdings, LLC v. Two Elecs., LLC, No. 16 MISC 000090 RBF, 2016 WL 6191911, at * 8 (Mass. Land Ct. Oct. 24, 2016), aff'd, 94 N.E.3d 880 (Mass. App. Ct. 2017) (finding text messages satisfy Statute of Frauds).

(5) See id. at * 8 (giving court's in-depth reasoning within memorandum). "[T]he Court finds that the February 3rd text message is a writing and that, read in the context of exchanges between the parties, it contains sufficient terms to state a binding contract between SJH and Two Electronics." Id.; see also Seth Heyman, Can Texting Create a Binding Contract?, Upcounsel BlOG, (last visited Apr. 2, 2018) (explaining court's findings).

(6) See St. John's Holdings, LLC, 2016 WL 1460477, at * 3 (summarizing purpose of contractual dealing). Piccione was the manager of Two Electronics, McDonald was the manager of SJH, Cefalo acted as the broker for SJH, and Barry acted as the broker for Two Electronics. Id. SJH offered $3,232,000. Id.

(7) See id. (describing first Letter of Intent). On January 27, 2016, Cefalo ("SJH") sent a Letter of Intent to purchase the Subject Property. Id. The letter also contained the deposit, due diligence period, and closing date. Id.

(8) See id. (illustrating first communications between parties). Piccione reviewed the initial terms and communicated revisions to Barry. Id. Two days later, on January 29, 2016, SJH sent a second letter to Two Electronics increasing the nonrefundable deposit from $128,000 to $168,000, but did not sign it. Id. Piccione reviewed and again communicated to Barry about terms in the letter. Id.

(9) See id. at * 4 (explaining Two Electronics' issues with second intent letter). Barry sent an email to SJH stating that Piccione preferred three weeks for a due diligence period instead of four, no thirty-day extension, and an applied penalty to the deal if the $200,000 is not paid at the end of forty-eight months. Id.

(10) See id. (giving details of final intent letter). The only change within the final letter was a reduction of the date for the $200,000 amount from sixty months to forty-eight months post-closing. Id. None of the issues raised by Piccione in the second intent letter review were raised in SJH's email. Id.

(11) See St. John's Holdings, LLC, 2016 WL 1460477, at * 4 (detailing third party's involvement). The third party offered $3,080,000. Id.; see also Georgette C. Poindexter, Letters of Intent in Commercial Real Estate Leases, Ali Cle (July 25, 2007), available at (providing examples of importance and presence of intent letters in agreement litigations).

(12) See id. (discussing request for signed Letter of Intent).

(13) See id. (showing text message communication). "At 4:25 PM on February 3, 2016, Cefalo sent a text message to Barry stating: Tim, I have the signed LOI and check it is 424 [PM] where can I meet you?" Id.

(14) See id. at * 4-5 (describing deal with third party).

(15) See id. (stating Piccione's reasons for refusing Final Letter of Intent). Barry attempted to set a meeting time for Piccione to sign the received letters, but Piccione notified Barry that another party had taken the deal. Id.

(16) See St. John's Holdings, LLC, 2016 WL 1460477, at * 5 (stating cause of action).

(17) See id. (listing SJH's claim).

(18) See id. (providing issue of case).

(19) See Charles II, 1677: An Act for prevention of Frauds and Perjuryes, British History Online, (last visited Apr. 12, 2018) [hereinafter Act for Prevention] (discussing creation of Statute of Frauds). The statute reads:
   IV. No Action against Executors, upon a special Promise, or upon
   any Agreement, or Contract for Sale of Lands, unless Agreement, be
   in Writing and signed. And bee [sic] it further enacted by the
   authoritie [sic] aforesaid [t]hat from and after the said fower and
   twentyeth day of June noe [sic] Action shall be brought whereby to
   charge any Executor or Administrator upon any speciall [sic]
   promise to answere [sic] damages out, of his owne [sic] Estate or
   whereby to charge the Defendant upon any special [sic] promise to
   answere [sic] for the debt default or miscarriages of another
   person or to charge any person upon any agreement made upon
   consideration of Marriage or upon any Contract or Sale of Lands
   Tenements or Hereditaments or any Interest in or concerning them or
   upon any Agreement that is not to be performed within the space of
   one yeare [sic] from the, makeing [sic] thereof unlesse [sic] the
   Agreement upon which such Action shall be brought or some
   Memorandum or Note thereof shall be in Writeing [sic] and signed by
   the partie [sic] to be charged therewith or some other person
   thereunto by him lawfully authorized.


(20) See 72 Am. Jur. 2d Statute of Frauds [section] 2 (2018) (describing sphere of influence of English Parliament's Statute of Frauds). "The English statute became effective in the English colonies in this country at the same time it became effective in Great Britain, June 24, 1677." Id. (citing Kline v. Lightman, 221 A.2d 675 (Md. 1966)).

(21) See Act for Prevention, supra note 19 (listing contractual topics that statute protects).

(22) See Jonnette Watson Hamilton, Two cases concerning the Statue of Frauds (1677, U.K.), (Feb. 26, 2008), (providing modern uses of UK version of Statute of Frauds).
   Most common law jurisdictions have adopted the provisions of the
   Statute of Frauds in some form which generally requires contracts
   for the sale of land to be in writing and signed by the party to be
   charged. In Alberta [Canada], it is the original English statute
   that is in force.


(23) See 72 Am. Jur. 2d Statute of Frauds [section] 1 (2018) (detailing influence of British Statute of Frauds on United States' version).
   The progenitor of statutes of frauds in this country was the
   English statute entitled 'An Act for the Prevention of Frauds and
   Perjuries.' Although it has no effect on statutes of frauds in this
   country, all provisions of the English Statute of Frauds, except
   those relating to land and guaranty contracts, were repealed by The
   Law Reform (Enforcement of Contracts) Act.


(24) See Statutes of Frauds--Part of English Act Repealed., 68 Harv. L. Rev. 383, 384 (1954) (illustrating how various states used 1677 English Statute of Frauds in drafting legislation).

(25) See 72 Am. Jur. 2d Statute of Frauds [section] 2 (2018) (providing how states have governed contractual dealings).

(26) See Mass. Gen. Laws Ann. ch. 259, [section] 1 (West 2018) (stating Massachusetts' contractual requirement for land dealings). The fourth portion of the statute states:
   No action shall be brought: ... Fourth, Upon a contract for the
   sale of lands, tenements or hereditaments or of any interest in or
   concerning them ... Unless the promise, contract or agreement upon
   which such action is brought, or some memorandum or note thereof,
   is in writing and signed by the party to be charged therewith or by
   some person thereunto by him lawfully authorized.


(27) See Schwanbeck v. Fed.-Mogul Corp., 592 N.E.2d 1289, 1293 (Mass. 1992) (listing Massachusetts' objective in real estate dealings and protection); see also Blackstone Realty LLC v. FDIC, 244 F.3d 193, 198 (1st Cir. 2001) (stating Massachusetts' objective in real estate transactions). "Massachusetts cases suggest that the adequacy of descriptive language in an agreement is to be determined 'as between the parties' actually involved in the transaction." Id.

(28) See Hurtubise v. McPherson, 951 N.E.2d 994, 997 (Mass. App. Ct. 2011) (explaining judiciary's reasoning in applying Commonwealth's Statute of Frauds to oral contracts). The Appeals Court reasoned:
   Such an agreement [equitable qualification] 'may be specifically
   enforced notwithstanding failure to comply with the Statute of
   Frauds if it is established that the party seeking enforcement, in
   reasonable reliance on the contract and on the continuing assent of
   the party against whom enforcement is sought, has so changed his
   position that injustice can be avoided only by specific
   enforcement. '... The application of this equitable exception to
   the operation of the statute has depended upon the degree of
   reliance on the oral agreement by the party pursuing specific

Id. (quoting Restatement (Second) of Contracts [section] 129 (1981)).

(29) See Shep Davidson, Emails Can Satisfy the Signature Requirement of the Statute of Frauds, Burns & Levinson, signature-requirement-of-the-statute-of-frauds/ (last visited Apr. 2, 2018) (illustrating court's challenge with advancing technology). The article explains:
   Quoting out of state authority, the Massachusetts Superior Court

   noted that the courts have 'not yet set forth rules of the road for
   the intersection between the seventeenth-century statute of frauds
   and twenty-first century electronic mail.' Calling the issue
   presented by the case one of first impression, the court stated
   that the Massachusetts Uniform Electronic Transactions Act
   ("MUETA"), was one attempt to provide those rules of the road to
   persons involved in real estate transactions.

Id. (quoting Feldberg v. Coxall, No. MICV201201649A, 2012 WL 3854947, at * 6 (Mass. Super. Ct. May 22, 2012)); see also Brad Reid, An Unsigned Email May Create a Contract, Huffington Post (Feb. 16, 2018), (stating Texas' present law on e-signature sufficiency); Liz Kemper, Text Messages Can Be Writings for Statue of Frauds Purposes, Lindley Law Office (Oct. 12, 2016), (providing example of how court's ruling can affect future business dealings). "The Massachusetts court's ruling, while not addressing text messages entirely on their own, is a reminder that new technology will be incorporated into case law eventually and as long as these new methods conform to the requirements of the old, they are likely to be accepted, however slowly." Id.

(30) See F. Robert Allison, Email and the Statute of Frauds in Massachusetts, F. Robert Allison, (last visited Apr. 2, 2018) (explaining how electronic signatures are viewed under modern law in Massachusetts regarding binding contracts).

(31) See id. (detailing common perceptions of email use in contract dealings).

(32) See Lawrence Morales, II, Symposium: The "Best Of" Litigation Update 2017: Discoverability and Admissibility of Electronic Evidence, 79 Advoc. 119, 126 (2017) (providing example of how text messages are viewed by Texas' legal community). The State Bar of Texas provides:
   Text messages have replaced many forms of communication, and for
   some reason, many individuals believe that text messages--and other
   forms of instant messaging--are private and will not be discovered
   in litigation. Of course, this belief is incorrect, and text
   messages are every bit discoverable as any other type of writing.


(33) See St. John's Holdings, LLC, 2016 WL 1460477, at * 5 (stating issue considered by court).

(34) See id. at * 6 (detailing Statute of Fraud's requirement relative to real estate transactions).

(35) See id. at * 5 (stating elements of valid contract). The court used the reasoning of the Supreme Judicial Court in Situation Mgmt. Sys, Inc. v. Malouf, Inc., 724 N.E.2d 699 (Mass. 2000) to define the elements of an enforceable contract. St. John's Holdings, LLC, 2016 WL 1460477, at * 5. Furthermore, the court noted that a "meeting of the minds" is still required to find a contractual agreement. Id.

(36) See St. John's Holdings, LLC, 2016 WL 1460477, at * 6 (highlighting issue court focused on). The court reasoned that:
   Resolving this issue [of whether the February 3 text message
   satisfies the Statute of Frauds] requires determining whether (a) a
   text message can be a writing under the Statute of Frauds, (b)
   whether the alleged writing contains sufficiently complete terms
   and an intention to be bound by those terms, (c) whether the text
   message is signed, and (d) whether there is an offer and


(37) See St. John's Holdings, LLC, 2016 WL 1460477, at * 6 (explaining what court considered in determining whether a writing existed).

(38) No. 011109A, 2001 WL 1839720, at * 3-4 (Mass. Super. Ct. Dec. 11, 2001).

(39) 20 1 2 WL 3854947, at * 6.

(40) See St. John's Holdings, LLC, 2016 WL 1460477, at * 7 (describing facts of similar cases); Feldberg, 2012 WL 3854947, at * 6 (acknowledging emails can satisfy Statute of Frauds). The Shattuck court held that "email messages exchanged between a prospective buyer and seller satisfied the Statute of Frauds" because "[t]he plaintiff-buyer and defendant-seller had engaged in negotiations concerning the sale of property through their attorneys that were conducted in person, by telephone, and email." St. John's Holdings, LLC, 2016 WL 1460477, at * 7. Furthermore, the Feldberg court decided on "whether a series of emails between their [both parties] attorneys regarding the sale of property was sufficient to satisfy the Statute of Frauds" and held that the "transactions provided a reasonable and supportable response to the defense of Statute of Frauds."


(41) See St. John's Holdings, LLC, 2016 WL 1460477, at * 8 (discussing how court deemed that text messages were sufficient writings).

(42) See id. at * 9 (emphasizing signature as vital element that led court to conclude text messages were sufficient writings).

(43) See St. John's Holdings, LLC, 2016 WL 1460477, at * 1 ("The question raised by defendant's Special Motion to Dismiss is whether a text message, all too familiar to most teenagers and their parents, can constitute a writing sufficient under the Statute of Frauds to create an enforceable contract for the sale of land.").

(44) See id. at * 8 (explaining court's use of traditional contract law elements).

(45) See id. at * 6 (stating elements process used by court to find text as sufficient writing).

(46) See Mass. Gen. Laws Ann. ch. 110G, [section] 7 (West 2018) (stating electronic signatures are enforceable); see also St. John's Holdings, LLC, 2016 WL 1460477, at * 9 (discussing reasoning behind court's finding of text as sufficient writing). The court noted:
   A series of unsigned text messages between Cefalo and Barry
   followed over the next few days, which were briefer and less
   formal, requesting updates on the status of the executed Final LOI.
   These communications are evidence that each of the parties opted
   into electronic means to conduct their transaction. Typing their
   names at the end of certain messages containing material terms, but
   declining to do so for more informal discussions, is indicative
   that the parties chose to be bound by those signed communications.

St. John's Holdings, LLC, 2016 WL 1460477, at * 9.

(47) See Poindexter, Letters of Intent in Commercial Real Estate Leases, Ali Cle (July 25, 2007), available at (discussing presence of intent letters in agreement litigations). The author notes:
   One of the most common scenarios involves parties who negotiate a
   letter of intent but agree to later "formalize" this document. The
   intent to later formalize does not prevent the formation of a
   binding and enforceable contract. This is especially true when
   there is evidence that the parties view the execution of a formal
   contract as merely a convenient memorial of their agreement.
   However, evidence of preliminary negotiations or an agreement to
   enter into a binding contract in the future does not, alone,
   constitute a contract. For the contract to be enforceable it must
   appear that further negotiations are not required to work out
   important or essential terms.

Id. at 315.

(48) See St. John's Holdings, LLC, 2016 WL 1460477, at * 6 (applying elements of Statute of Frauds to other forms of communications).

(49) See id. at * 9 (stating typed name at end of electronic message is evidence of intent) ; see also Mass. Gen. Laws Ann. ch. 110G, [section] 7 (West 2018) ("If a law requires a signature, an electronic signature satisfies the law."); Mass. Gen. Laws Ann. ch. 110G, [section] 9 (West 2018) ("The effect of an electronic record or electronic signature attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law."); Ovsepian, supra note 43, at 53 ("That extra step of typing a name at the end of an email highlights the writer's intent to authenticate the email.").

(50) See Reid, supra note 29 (discussing Texas law addressing e-signature sufficiency); see also Brecher, supra note 44 (stating how many states, including New Jersey, have adopted Uniform Electronic Transactions Act).

(51) See Ovsepian, supra note 43, at 54 (stating that electronic communications should constitute sufficient writings when identification of parties is met).

(52) See Kemper, supra note 29 (discussing legal effect on future business dealings).

(53) See Heyman, supra note 5 (stating cautionary example of how to proceed when involving text messaging in business dealings).
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Author:Brown, Darius
Publication:Suffolk Journal of Trial & Appellate Advocacy
Date:Jun 1, 2018

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