Supreme Court of Alabama Clarifies Enforceability of Text-Message Settlements: Definiteness and the Mirror-Image Rule Remain Paramount

Introduction

In iWTNS, Inc.; Leveraged, LLC; and Bradley Lewis v. MotionMobs, LLC, No. CV-22-902767 (Ala. Aug. 22, 2025), the Supreme Court of Alabama confronted a modern twist on an old contract-formation problem: Do text messages exchanged between litigants constitute a binding settlement agreement?

The dispute arose after MotionMobs, LLC developed—allegedly incompletely—a mobile application for Bradley Lewis’s companies, iWTNS, Inc. and Leveraged, LLC. When non-payment and quality concerns surfaced, MotionMobs sued for breach of contract. During discovery, the parties explored settlement by text message. MotionMobs relied on those texts to secure an enforcement order in the Jefferson Circuit Court. The defendants appealed, asserting that no contract was ever formed.

The Supreme Court reversed, holding that the texts were not a settlement contract because (1) Fisher’s text was a counteroffer rather than an acceptance; and (2) the purported counteroffer was too indefinite regarding material terms to be accepted. The case sets an important precedent for practitioners negotiating through informal digital media.

Summary of the Judgment

The Court reviewed the matter de novo, as only questions of law were involved.
Applying classic contract principles, it concluded that:

Lewis’s text proposing a $150,000 five-month payment plan was an offer.
Fisher’s response introduced new, material conditions (“mutually agreeable release,” “acceleration,” “default judgment” clauses) and therefore constituted a counteroffer—not an acceptance.
Because the counteroffer lacked concrete terms and because Lewis never accepted it, no contract existed.

Accordingly, the order compelling enforcement of the text messages was reversed and the matter remanded to the circuit court.

Analysis

Precedents Cited

The Court grounded its reasoning in familiar Alabama and common-law authorities:

Sheridan v. Bd. of Water & Sewer Comm’rs (2000) – Settlement agreements are contracts.
Cook’s Pest Control, Inc. v. Rebar (2002) – A counteroffer rejects an original offer; mirror-image rule applied.
Smith v. Chickamauga Cedar Co. (1955) – Acceptance must be “identical” in service contracts.
Payne v. Zimmern (1921) – Conditional acceptance operates as rejection.
Grayson v. Hanson (2002) – “Agreements to agree” are unenforceable owing to indefiniteness.
White Sands Grp., L.L.C. v. PRS II, LLC (2008) – Courts cannot supply missing essential terms.
Muscle Shoals Aviation, Inc. v. Muscle Shoals Airport Auth. (1987) – Courts cannot create a contract where none exists.
Secondary authority: Restatement (Second) of Contracts § 27.

Legal Reasoning

The Court applied two bedrock rules:

Mirror-Image Rule: For contracts involving services, acceptance must mirror the offer in every material respect. Fisher’s addition of new terms meant her text was a counteroffer.
Definiteness Doctrine: An enforceable contract cannot leave material terms for future agreement. By referencing a “mutually agreeable release” and undefined “acceleration and default judgment clauses,” Fisher proposed an agreement “to agree.” Without specifics, neither party—and no court—could ascertain the parties’ obligations or fashion a remedy.

The Court was unpersuaded by MotionMobs’ argument that Lewis’s promise to “get this drafted” evidenced assent. Rather, that phrase signaled an intention to continue negotiations, not an agreement on fixed terms. The later “August agreement,” a detailed 4½-page document, underscored that important terms remained unresolved on June 29.

Impact of the Decision

Digital Negotiations: The ruling confirms that text messages and other informal communications can form contracts, but only when the same substantive requirements of contract law are satisfied.
Settlement Enforcement Motions: Alabama trial courts must scrutinize alleged settlements—especially those from informal media—for mirror-image acceptance and definiteness before granting motions to enforce.
Transactional Practice: Lawyers should craft explicit disclaimers (“subject to execution of a definitive written agreement”) when negotiating by text or email to prevent premature contract formation—or here, misplaced expectations.
Litigation Strategy: Parties seeking enforcement must proffer unambiguous evidence of offer, acceptance, and material terms. Absent that, courts are likely to deny enforcement and return the matter to the merits.
Broader Jurisprudence: While many jurisdictions recognize electronically formed contracts, this decision cautions that medium does not trump doctrine. The case aligns Alabama with other states that require particularity in digital settlements (e.g., New York’s CPLR § 2104 email cases).

Complex Concepts Simplified

Offer: A proposal showing clear intent to be bound immediately if accepted (e.g., “I commit to pay $30k per month for five months”).
Acceptance: An unequivocal expression of agreement to the exact terms of the offer.
Counteroffer: A purported acceptance that modifies or adds terms, thereby rejecting the original offer and proposing a new one.
Mirror-Image Rule: The principle that acceptance must mirror the offer without variance in material terms.
Definite Terms: Concrete, specific provisions (price, time, duties) that allow a court to determine breach and remedy.
Agreement to Agree: A non-binding understanding that parties will negotiate terms later—unenforceable under Alabama law.
Acceleration Clause: Contract provision that makes the entire debt immediately due upon breach (e.g., missed payment).
Default Judgment Clause: Provision allowing entry of judgment without trial if specified conditions (like non-payment) occur.
Release: A contractual relinquishment of claims, usually mutual, which must be precisely drafted to avoid ambiguity.

Conclusion

iWTNS v. MotionMobs is less about technology than timeless contract doctrine. The Supreme Court of Alabama reaffirmed that, regardless of medium, settlement agreements demand (1) an unqualified mirror-image acceptance and (2) sufficiently definite material terms. Where a party’s response injects new, undefined provisions, the dialogue becomes a counteroffer and fails for indefiniteness unless and until the other side expressly assents to clear, concrete terms.

For practitioners, the decision is a clarion call: draft with precision, memorialize complete terms, and treat every informal communication as potentially consequential. For courts, it supplies a structured framework to assess digital settlement disputes. And for parties, it underscores that a hastily sent text may spark negotiation, but without specificity, it will not bind.