Evidentiary Use of Email - April 4, 2017

 

Consider the benefits of using electronic communications in exercising rights under a contract.

By way of illustration, many commercial contracts include provision for their automatic renewal. A party wishing to terminate the arrangement must take timely action in order to ensure that the term is not unwittingly extended.

Last month, the Massachusetts Appeals Court reversed a trial court decision in Patriot Power, LLC v. New Rounder, LLC, involving the automatic renewal of a commercial lease, holding that “the tenant had the burden to prove it fulfilled the termination option requirements outlined in the lease, as this was a condition imposed on the party seeking to end the contractual obligation.” This followed a circumstance where the tenant claimed to have timely sent a written notice of termination in a package of other documents, but the landlord denied that the notice was among the collection of documents received. The trial judge had incorrectly instructed the jury that it was the landlord’s burden to prove that the termination notice was not among the documents received.

The assigned burden of proof became a pivotal issue because the determination whether or not the notice was included in the package was wholly dependent upon the credibility of contradictory factual positions. One side said the notice was included – the other said it was not.

The result highlights the importance of not only technical and timely compliance with contractual conditions for the exercise of options, but the need to create and preserve compelling proof that the condition has been satisfied. Consider using email communications for this purpose. Electronic communications are not only simpler to execute, but inherently provide a system for proving the communication. Toward the same end, it is worth expressly providing for email communications as an alternative to traditional “writings” when negotiating any commercial contract.