One of the most frequent concerns I hear from clients and non-clients alike, involves questions about the enforceability of different types of contracts, and contract negotiations.
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recent decision in the U.S. District Court for the Western District of Virginia reinforces the general trend that contracts negotiated electronically, and often signed that way as well, can be enforced.
It also reinforces the point of law that e-mail communication is as authoritative as a letter.
This dispute involves a contract that was negotiated by e-mail. One of the negotiating parties suggested a change to the contract after the initial contract had been signed. One of these provisions, an arbitration clause, was the subject to the dispute. While the parties disagreed on the series of events, they did agree that the other party signed the initial contract, replied by e-mail to a proposed modification, and then signed the “new” contract. The e-mail reply stated: “[m]y answer is yes to both. Please make the necessary changes and additions and forward the same to me in two signed copies. I will then sign them both and return one completed contract to you.”
The parties disputed whether there was actual agreement about the second version of the contract – even though it was fully executed. The court held that the response in the e-mail was sufficient to demonstrate that the parties agreed to the new terms, even if one party had not actually read the agreement, or misunderstood what he was agreeing to.
This case is important for two reasons. The first is to further strengthen the current trend of allowing contract consent by e-mail (and, by extrapolation, other electronic means). The second is to point out that in spite of its informal nature, e-mail will likely be considered by a court to have the same evidentiary status as a letter or other formal method of communication. It bears repeating that communication by e-mail should be treated with the same care as communication by letter or fax.
Mike
dropthemike.com