E-mails could modify an employment contract

E-mails between an employee and an employer could modify the terms of their employment contract – even though the contract said that any changes had to be in writing and signed. That’s the result of a decision from a New York appeals court.

The case involved the owner of a public relations firm who sold his firm to a French company. Their contract provided that the owner would continue as CEO for three years. After six months, though, he had lost the firm’s biggest client and fallen short of revenue targets. He was told that he could either leave the company or stay to work on new terms. The owner e-mailed the company and said, “I accept your proposal” (about the new terms), and the company e-mailed back saying it was happy with his decision.

Later, the owner went to court to try to enforce the original three-year agreement. But the court said the original agreement had been modified by the exchange of e-mails.

What it means: Obviously, you need to be very careful about e-mails that change the terms of a contract. Most people think of e-mail as a casual form of communication, but that’s a dangerous assumption.

Another issue is whether other forms of communication could modify an agreement, such as instant messaging or technology that transcribes voicemail into written form.

When you enter into a contract, if you don’t want to “accidentally” modify it later, you might want to put in a provision that says that e-mail and other electronic forms of communication do not “count” when modifying the terms. Many companies might want to review their standard employment contracts with this in mind.