Can an email serve as a good notice under a contract?
15 October 2018
Electronic communication is certainly the dominant method of communication nowadays and it is tempting to believe that in today’s modern society sending a simple email as opposed to a formal letter will surely serve as a valid notice under a contract.
Let’s consider an example.
John is a tenant and his initial lease term is due to expire in 6 months. He wanted to exercise his option under the lease for a further term of 3 years. John has known the landlord, Chris, for a long time and decided to send a quick email to Chris although the lease requires all notices under the lease to be served as a letter addressed and posted to Chris’s solicitor.
John emailed Chris stating “Hi Chris, just noted our lease is due to expire soon and please take this as my formal exercise of option for another 3 years.” After the option exercise period expired, Chris denies receiving any email from John. Chris also argues that an email is not a valid notice under the lease agreement anyway.
First of all, under the current laws of evidence in some jurisdictions (Commonwealth, NSW and Victoria) electronic communication (i.e. an email) is presumed to have been received by the person to whom it was sent unless there is sufficient evidence to raise doubt about the presumption. In other jurisdictions such as Queensland, the laws of evidence vary and the above presumption may not apply.
Even if the email was sent and actually or presumed to be received, whether it is a valid exercise of notice depends on interpretation of the terms of the lease. This principle was discussed in a recent NSW Supreme Court case, Kegran Pty Ltd v Warrik Pty Ltd [2018] NSWSC 1357.
The judge explained that when notice by an email is not expressly included in the lease as a method of exercising the option, it may still be valid if the listed methods are not ‘mandatory’ and ‘exclusively available methods of service’. This means that if from reading the lease as a whole, the requirement is merely ‘facultative’ and/or is ‘non exhaustive’, then an email may still serve as a valid written notice.
Determining whether an email can be a valid method under a particular contract requires careful review of the terms of the contract. For prudence sake, however, we recommend that you seek legal advice prior to serving an important notice under a contract such as exercising your option under a lease.
An email may be fast and simple now but if its validity is challenged by the other party, time and resources required to resolve the dispute will certainly outweigh the benefits of an email over an old fashioned letter served in accordance with the terms of the contract.