LEGAL
Parties that use e-mail to negotiate contracts should be aware that those e-mails may form an enforceable contract, even without a separately signed, written agreement.
To address the growth of electronic transactions, state legislatures and the federal government have enacted laws to ensure that:
Accordingly, courts have shown increased willingness to give legal significance to e-mail communications. For example, in Forcelli v. Gelco Corp., the New York Supreme Court, Appellate Division held that an e-mail message containing the sender's typed name satisfied the criteria of New York's settlement agreement statute, creating a binding and enforceable stipulation of settlement.
Generally, courts have held that parties can create an enforceable contract via e-mail where parties have first agreed, either explicitly or implicitly, to conduct the transaction electronically. Courts have found that parties can implicitly consent to an electronic transaction by:
Parties that intend to form an enforceable contract via e-mail should ensure that:
By contrast, parties that do not intend to form an enforceable contract via e-mail should include a disclaimer in their e-mails. The disclaimer should state that the e-mail is:
For sample disclaimer language, see Standard Clause, General Contract Clauses: Disclaimer, E-mail is Not a Binding Agreement.
For a general overview of how legislators and courts have defined what constitutes a valid signature on contracts governed by the Statute of Frauds, see Practice Note, Signature Requirements for an Enforceable Contract.
Companies involved in federal antitrust enforcement actions should understand the types of remedies available to the antitrust agencies and be prepared, when appropriate, to propose a remedy to end the action early in the process.
Deborah Feinstein, Director of the Federal Trade Commission's (FTC's) Bureau of Competition, and William Baer, Assistant Attorney General of the Department of Justice's (DOJ's) Antitrust Division, both recently spoke about the benefit of using consent decrees and other remedies instead of litigation to counteract anticompetitive conduct and to restore competition. Both Feinstein and Baer advised that when negotiating remedies with the agencies, parties should:
With an equal focus on restoring and preserving competition, Baer highlighted the DOJ's willingness to challenge post-consummated deals and "unscramble the eggs," sometimes asking for divestitures of more than what had been originally held by the acquired firm, if necessary. Feinstein noted that while the FTC prefers divestitures, sometimes licenses are a more appropriate merger remedy, as was the case in the recent Honeywell/Intermec and Neilsen/Arbitron merger settlements.
In certain non-merger cases, Baer stressed the need for an external compliance monitor to ensure effective compliance programs. The DOJ successfully obtained compliance monitors in both the civil Apple e-books case and the criminal case against AU Optronics Corporation.
Additionally, Baer noted the DOJ's ability to obtain civil disgorgement when injunctive relief is insufficient to remedy anticompetitive conduct, such as when private antitrust actions are prohibited in highly regulated industries.
For more information on merger remedies, see Practice Note, Merger Remedies.
For summaries of merger settlements and litigation outcomes, and a comparison tool for merger analysis and remedies across industries, see What's Market, Federal Merger Enforcement Actions.
A recent decision from Judge Scheindlin of the US District Court for the Southern District of New York serves as a harsh reminder that in the Second Circuit, litigants risk sanctions if they fail to preserve electronically stored information (ESI).
In Sekisui American Corp. v. Hart, the plaintiff corporation intentionally, though not maliciously, destroyed ESI. Judge Scheindlin found gross negligence because the plaintiff failed to:
Despite the plaintiff's efforts to reconstruct the lost ESI, which the magistrate judge found reasonable, Judge Scheindlin sanctioned the plaintiff by issuing a rebuttable adverse inference instruction and awarding attorneys' fees.
Notably, under proposed amendments to Federal Rule of Civil Procedure (FRCP) 37(e), the outcome would have been different. If adopted, FRCP 37(e) would:
Comments on the proposed amendments are due February 15, 2014 (see Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy and Civil Procedure).
For the time being, potential litigants in the Second Circuit should:
For a sample litigation hold notice, see Standard Document, Litigation Hold Notice.
This look at the major issues on the horizon for corporate counsel comes from Practical Law – an online legal know-how service. View all the looming issues now – compliments of Practical Law The Journal, which covers the latest transactional and compliance topics that impact your practice. To gain access to more related know- how resources, please visit us.practicallaw.com.
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