20 FEBRUARY 2013
With the ease and speed of communication by email, it is becoming increasingly common for businesses to give legal notices under agreements they have entered with others by email. For example, giving notice to exercise an option under a lease or notice to extend the deadline of a contract date. We consider this is a risky practice which may result in the email you have given being invalid for the purposes of the agreement.
There is still a shortage of legislation and case law rules established which govern the giving of notices by email. This lack of governance and established legal principles means there is uncertainty in relation to whether a notice given by email is valid or when that email will be considered delivered to the recipient by law.
Agreements will usually have a specific clause dealing with how notices are to be given. In our experience, it is still relatively uncommon for these clauses to specify email as a method of giving notice. If the agreement does not specify email as a method of notice, and notice is then given by email, there is a risk that the notice will not be valid. This could have dire consequences for the party intending to rely on the notice and in some cases risk exposure to the other party terminating the agreement.
While there may be arguments to support the position that a notice given by an unauthorised method may still be validly given, rather than waste time and money debating the point before a Court businesses should instead be proactive and familiarise themselves with the appropriate method of notice under the agreement.
Care should also be taken in considering whether to accept email as a valid form of notice in an agreement. While read receipts may be requested in emails, the delivery of receipts is usually at the discretion of the recipient. Anti-virus filters and junk inboxes also pose risks in relation to accepting email as a valid method of notice. If email is accepted, systems should be in place to minimise these risks and to ensure each notice comes to the attention of the intended recipient.
We would be pleased to assist you in relation to the notice provisions of your agreements and to advise you on compliance issues and perceived risks.
You are a valued Kinneally Miley contact, for more information related to this Legal Update please contact us.
[contactsbox] [leftcolumn]Contact Partner: Michael Coe
Direct Telephone : 07 3210 5709
Mobile Telephone : 0408 983 876
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