• Effective Use of E-mail as a Contract Notice Vehicle
  • August 8, 2007 | Authors: Stephen Gold; Michael T. Hepburn
  • Law Firm: McGuireWoods LLP - Chicago Office
  • While the notion of the “paperless office” has yet to be fully realized, it is without question that the electronic transmission of documents by e-mail is the critical method by which businesses communicate, both internally and externally. The advantages that e-mail presents are obvious: the speed of delivery; the elimination of costly document productions; the ability to take full advantage of the features of electronic media; and, with the ubiquity of e-mail-enabled mobile devices, the ability to reach people wherever they might be.

    As businesses have become more comfortable with the medium, they have taken to using e-mail as a way to communicate on formal contract matters: for complying with requirements to provide written notices of the occurrence of certain events; for indicating acceptance of deliverables; for ordering additional services or making a change to services; and even for resolving disputes.

    But e-mail is not without its disadvantages. Chief among them is unsolicited e-mail, or spam. Nearly every business today has adopted some sort of filtering technology that tries to identify these unsolicited messages and prevent them from being delivered to employees. However, these filtering technologies are not perfect and sometimes they catch in their web important e-mails that the business was expecting to see or that need attention. For example, it was recently reported that a Colorado law firm learned this lesson in a dramatic way when the spam firewall product the firm used apparently blocked e-mail notices from the local United States District Court. One of those e-mail notices announced the scheduling of a hearing in a civil lawsuit the firm was handling; a hearing the firm failed to attend because the e-mail was never seen. The court ordered the law firm to pay the attorneys’ fees and expenses of the opposing counsel who showed up at the missed hearing.

    Most businesses will conclude that these disadvantages of e-mail for contract and other important notices don’t outweigh the benefits. However, every company that is planning to make use of e-mail in this way is advised to take precautions such as the following:

    1. Establish policies on what needs to be in writing: Each company should develop policies setting forth the type of transactions and/or communications that it is comfortable conducting via e-mail. This will vary by organization. Some may be comfortable only receiving notices, while others might be comfortable using e-mail for effecting contract amendments. Or, comfort may depend on the amount of money involved or the complexity of the matter being addressed. In establishing these policies, companies should strongly keep in mind that e-mail lends itself to informality and that employees may not realize that an exchange of e-mails between two employees could establish a binding contract between the companies. (Companies should also become familiar with the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (e-SIGN), which establish a legal framework for recognizing electronic signatures and records as just as capable of creating binding contracts as traditional methods.) Accordingly, the policy should take into account that e-mail may not be appropriate for matters that need higher level scrutiny within the company, precise wording or clear documentation of agreement for record retention purposes. Additionally, appropriate training should be provided to employees. Contracts also should be written with these policies in mind, specifying where necessary which types of notices may not be sent by e-mail, whether e-mail can be used to make amendments and the timing of when an e-mail notice is considered delivered for contract purposes.

    2. Revisit the configuration of your filtering technology: Despite the unfortunate story of the Colorado law firm described above, no company relishes the idea of life without spam filters. But there are several ways in which the filtering technology can be configured to help reduce the chance that an important e-mail is lost. For example, most filtering technologies allow individual e-mail addresses or internet domains to be added to a “safe list”. E-mails received from those on the “safe list” are delivered to the recipients even if the filtering rules otherwise would determine that the e-mail is an unwanted message to be blocked. Similarly, most filtering technologies quarantine these e-mails and allow for their delivery if someone determines that they were filtered by mistake. Unfortunately, often those quarantine sites go unchecked by those who could determine if the message should have been received: the end user. Technologies exist by which an alert message could be sent proactively to the end user, listing the addresses, dates and subject matter lines from the captured messages and instructions on how to cause any of these messages to be delivered to their inbox.

    3. If it’s really important, call: If it is important that a particular class of communication be given immediate attention, consider adding other layers to how your company approaches it. A simple starting point would be to confirm with a test message that e-mails sent to an e-mail notice address are received by the recipient, although this is no guarantee of future success as spam filters adapt and update over time. A further step is to require that more than one individual be sent any legally significant e-mail message (such as a contract breach notice) or even a telephone call be placed to alert of the e-mail transmission. Policies should be established for how to handle e-mail when an employee is on vacation. This might include anything from establishing automatic “out-of-office” notification messages that are sent in reply when e-mails are received, procedures for contacting important contacts to identify an alternative e-mail address for sending notices, policies for granting others access to the affected e-mail account while the individual is on vacation or the establishment of a separate e-mail address (e.g., [email protected][companyname].com) that can be used for notices, which are then forwarded to appropriate individuals within the company automatically. Of course, for some sensitive communications, the risk of spam filter interception may be too high; with the experience of the Colorado law firm in mind, companies may choose to preclude legal notice by e-mail in a contract and rely instead on the slower, lower tech solution of certified mail or the like.