**************************
It's been a long time since contracts were executed in person and duplicate originals were also signed. Contracts are copied, faxed, transmitted electronically and who knows what else. When a dispute arises and the original contract is no where to be found, or there are competing copies of the contract, what happens. We know that any form of contract copy is admissible in court, and that's where the issue is going to end up if there is an issue. Unless you are a real litigator, and by that I mean a lawyer who actually goes into court and tries cases, you may not realize the hurtles you have to jump through to get your copy of the contract before the judge or jury. Trust me, it's a horror when this happens:
Lawyer to witness: "I show you this document and ask if you can identify it"
alarm co witness: "Yes, it's a copy of the original contract. This is all we have. It was faxed back signed."
Lawyer: "Your Honor, I offer this contract in evidence"
the subscriber's lawyer: "Objection. It's not the original and our copy doesn't look like this one"
Judge: "Objection sustained"
You're screwed. No contract in evidence and that's the end of your case if it's a collection case, and it might be the end of your company if it's a defense case with damages exceeding your insurance coverage limits.
Research reveals very little case law on this issue because it's typically an issue of fact, rather than law, and therefore not as likely to end up with a written decision by a Judge that gets published. The essential issue is that the contract that is presented as evidence must be legible and a witness needs to be able to testify that it is the original or an exact copy of the original. Variation is going to depend on why or how the produced copy is different than the original. An omitted paragraph, in the middle or end, is a different problem than a faxed or scanned copy coming back creased or with coffee stains or blurred or reduced text. Even if you can't find the original that was sent you could possibly produce a form of the contract and have the witness testify that the form is the only one used and once filled in this is the form that was sent to the subscriber for signature. That probably won't work if its not a standard form. So if you have a proposal that you prepared if the copy is not an exact copy you won't be able to testify that it's a standard form; you could have typed anything for that deal. Less chance of getting it admitted as evidence.
I had one of my junior attorneys research a bit. Here's the memo on the topic.
***************
Technology allows us to execute contracts and transmit documents with the push of a button. Generally, as long as a writing, such as a contract, is recorded, saved or reproduced in the “regular course of business,” that copy may be admitted as evidence of the original. If you want to prove the terms of a contract, the best evidence rule will require the original to be available for inspection, unless there is an exception at play. One of those exceptions is that your opponent is in possession of the original, or if the original is lost. In these cases, it may be sufficient to produce a copy of the contract.
But what if the only copy you have has been blotched, blurred, or creased in the transmission process, and the defects just happen to hide a material term of the contract?
What if your opponent argues that the illegible term is different than what was on the contract you originally sent them?
For consumer transactions, the rules state that “any printed contract or agreement involving a consumer transaction… where the print is not clear and legible… may not be received in evidence in any trial, hearing or proceeding on behalf of the party who printed or prepared such contract or agreement.” Different rules apply to business transactions, but surprisingly no New York court determined whether illegible terms in commercial contracts were binding before 2002.
In 2002, a lower court found that a party seeking to enforce a contract cannot establish the terms to be enforced unless the fact finder can read the document to decipher the meaning . The case concerned a credit application and whether the defendant had signed in his personal capacity to guaranty the contract. Neither party was able to produce the original document, and the only copy available was illegible. Since the words in issue, being the ones below the defendant’s signature (which were alleged to read “personal guarantee”), were illegible, the plaintiff could not enforce the personal guarantee. The court found that to hold otherwise would make the fundamental requirement for mutual assent to contract terms meaningless.
A lower court in New York encountered a similar issue in 2006 . The defendant prepared a report and agreement outlining steps to be taken by the plaintiff in order to make a claim for negligent inspection. If the steps were not followed, the plaintiff was considered to waive this right. The defendant then faxed the plaintiff a copy. The fax machine cut out this provision and two other provisions completely. The plaintiff, unaware of the missing provisions, faxed a signed copy to the defendant. The defendant did nothing to correct the situation. When the plaintiff brought a claim without following the steps in the agreement, the defendant could not produce a signed copy of the contract which included all of the provisions. The plaintiff was allowed to bring her claim.
Therefore, if you receive a copy of a contract where the material terms are illegible after transmission, and you have no other copy, it is advisable to request a legible copy for your records.
Nicoletta Lakatos, Esq.
*******************************************************************************************************************
TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com. Most comments and questions get circulated.
*******************************************************************************************************************
Speaking Engagements
*******************
Quick Response Dealer and Integrator Information and Technical Conference. July 15 -16, 2014 at Holiday Inn - Independence Ohio. All alarm dealers are invited. For more information, schedule and to RSVP contact Margie or Renee at reneet@quickresponse.net or call Margie/Renee at 800 462 5353 www.quickresponse.net
***************************
Alarm Association of Greater St. Louis. September 16, 2014. at Tech Electronics HQs office at 6437 Manchester Ave, St. Louis, MO 63139. Meeting is from 11:45 – 1:30 Video conference presentation starting at 12:15 CST. For more information or to register contact Tony Drago adrago@tyco.com www.alarmstl.org
********************
NYSESA - September 17, 2014 at Honor's Haven Resort, Ellenville, NY. This is the NYS Electronic Security Assoc annual meeting. Presentation on updated contracts and current legal issues will be at 10:30 AM. For more information or reservations contact Dale R. Eller, Executive Director (814) 838-0301 dalereller@itzsolutions.com
**********************
Alabama Alarm Association. AAA's Fall Meeting and Trade Show - October 21, 2014 from 3 to 5 PM at DoubleTree Hotel 808 South 20th Street Birmingham, AL 35205 for more info contact AAA Executive Director: director@alabamaalarm.org (205) 933-9000
*********************
Electronic Security Summit for 2014. October 22-24, 2014 at the landmark Broadmoor Hotel. Colorado Springs, CO. For more information contact Alexander J. Quirin, CEO & Managing Partner, Advisory Summit Providers, LLC., (786) 999-9738 alex.quirin@aspsummits.com www.aspsummits.com
**********************