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How It Works In The Real World
So how does all of this apply to the real world? The short answer is that no matter what you do - buying, selling, dealing in products, dealing in services - it can be devastating. Here, for instance, is a scenario that is starting to clog courtrooms all over the country. Let's say that you are in the market to buy some widgets (or some services, or some advice - it really does not matter). You e-mail your supplier: "I am willing to buy 5,000 widgets at $100 each." You get an e-mail back: "Your offer to buy 5,000 widgets at $100 each is accepted." You e-mail back: "Great. I will have my lawyer draft the documents."
Your lawyer then drafts a contract which includes certain provisions that are very important to you: you wanted 90 days to pay; you wanted the supplier to be responsible for damages in the event that the widgets did not work and caused you harm; you wanted the right to return the widgets if they did not meet certain specifications; and you wanted an arbitration clause, in your jurisdiction, in case of a dispute. Your lawyer sends a draft contract including these terms to the widget supplier. The supplier immediately rejects it. You e-mail the supplier as follows: "Sorry we could not come to an agreement. We are not willing to purchase the widgets unless you accept the terms in the contract we sent you."
The next thing you know, you are served with a lawsuit for breach of the agreement to buy the widgets. Your position is that you weren't willing to consummate the deal unless all those terms became a part of the transaction. But that's not what you said in your e-mail. Your e-mail could easily be construed as an offer to buy the widgets at a stated price, and the responsive e-mail could easily be construed as an acceptance. That's all you need. Contract formed. One of the most basic precepts of contract law is that contracts are formed by "objective manifestations of mutual assent." That is legalese for "it doesn't matter what you meant, it only matters what you said."
Here's another one. When you're not quite satisfied with a proposal that someone makes to you, you might say, "I'll make that deal, so long as payment is received within 10 days." Or, perhaps, "that's fine, but you have to include all of the installation in your pricing." Sometimes, however, you might say, "That's a deal. But I'd also like to delay payment for three months, OK?" Or, "I accept that, but can you also meet our requirements for the next six months?"
Remember, it's not what you meant, but rather it's what you said. The first two responses would not form a contract. They are the equivalent of saying "I'll only make that deal if you agree to some other condition." The last two responses, however, could easily be construed as the acceptance of an offer - which forms a contract - followed by the commencement of negotiations on a separate deal. There is a huge difference in the law between "yes, provided that" (which is not an acceptance of an offer), and "yes, but can we also . . .", which may well be an acceptance, whether or not you are successful in obtaining the additional concession you seek.
The point is that these kinds of e-mails, which are all too typical, create a written record that is likely to be dissected, parsed and reconstructed in ways you never dreamed possible. The process of e-mailing converts what you thought to be casual conversation, and turns it into the functional equivalent of an FBI tape recording obtained by an informant wearing a wire. As they say on Law and Order, everything you say can and will be held against you.
Counsel Consulting Group LLC helps companies throughout the United States avoid employment and HR-related claims and liabilities. CCG assesses existing policies, procedures and problem areas; it provides customized liability-avoidance training to managers and executives; and it designs and implements business techniques that reduce employment liability risks on a long term basis. CCG also offers specialized workshops for managers and HR executives, customized consulting in focused employment-related areas, and CD-ROM and web-based training alternatives. For more information, contact us at info@powelltrachtman.com and visit our website at www.counselconsulting.com.
Powell, Trachtman, Logan, Carrle & Lombardo, P.C. is a full service law firm with offices in suburban Philadelphia, PA, Harrisburg, PA and Cherry Hill, NJ. Powell Trachtman represents a variety of commercial enterprises, entrepreneurs and business executives in respect to their litigation, litigation avoidance planning, business formation, business transactions, estate and tax planning, and other needs. We are also approved defense counsel for numerous insurance carriers in matters pertaining to professional malpractice, products liability, employment practices, directors and officers liability, and many other fields. For more information, contact us at info@powelltrachtman.com and visit our website at www.powelltrachtman.com.
