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Is Your Contract Notice Provision Up to Date?

It’s just part of life and business that we get involved in contracts. Almost any contract that is properly drafted will have a contract notice provision, or clause. This clause states that the parties are agreeing to receive notices about matters relating to that contract. Unfortunately, this provision is almost always treated as an afterthought. It is, however, an item that should be periodically reviewed.

Why a Contract Notice Provision Matters

Unfortunately, the first time a contract is usually reviewed following the initial signing is when something goes wrong. And that’s only when personal visits, emails, or telephone calls aren’t working to resolve the problem. At that point, the aggrieved party is going to want to give formal notice of its claim.

The contract, of course, provides the address to use for notices. Based on the contract notice provision, once a notice is sent to that address, the time to respond clock starts.

What to Do If You’re Being Notified

If you have moved and not updated your address, your rights under the contract may be jeopardized.There is abundant case law that holds parties to strict compliance with these clauses. Most contracts provide that you can change the address for the contract notice provision, but you have to remember to actually do that.

If the other party complies with the notice provisions and you do not actually get the notice, your failure to keep it updated can be held against you.

When You Have to Give Notice

If a situation occurs where you have to notify the other party of your rights under the contract, pull it out and review what the contract notice provision says you have to do. Follow that procedure to the letter. You might think that an email or fax is sufficient. After all, “I know they received it” seems to be a rational thought.

Unfortunately, that may not be enough. And if the contract does not permit notice that way, it will be wholly ineffective.

Are Electronic Notices Sufficient?

While most business has moved into the 21st century and electronic communications, that does not mean that the law is keeping up. This lag is an ongoing discussion since general email services don’t typically provide confirmation of receipt. While you may be able to prove you sent notification, you can’t be assured of what happened on the other side. An email sent to the other party and to yourself, a common practice, is really not legally sufficient.

There are some services, such as RPost and Verisign, that can confirm delivery and receipt of emails. These companies take the position that their services meet legal requirements. They well may, but I have not researched any cases challenging their claims and would not want my clients to be involved in a test case.

Questions about Contract Notice Provision?

As an individual and business professional, you no doubt have many contracts you have (and will) signed. Instead of hoping that everything is correct and up to date, let’s take a look. Contact us to schedule a review and make sure you’re in compliance.

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