Following up on the series of articles over the past four weeks regarding oral modification of written agreements, we now turn to a related topic: modification of a written agreement by email.
Generally, the legal doctrines covered in the oral modification series — part performance, waiver, promissory estoppel and equitable estoppel — will apply to statements made in emails as well as to oral statements. So just as an oral statement may modify a contract, even in the face of a “no oral modification” clause, an email may also modify a contract if one of the four doctrines above is invoked.
However, there is an additional consideration when emails are involved. In certain instances, the email itself will be deemed to constitute a signed written agreement. In those cases, there is no need to apply any of the four doctrines above, because the email alone operates to modify the agreement just as a signed written amendment would.
In the 2008 case of Stevens v. Publicis, S.A., the court established that an email could satisfy a no oral modifications clause. So even if a contract contains a provision that prohibits oral modifications and mandates that all amendments be signed and in writing, the contract could be capable of being modified by an email, even if none of the four doctrines above was applicable.
Prior to the Stevens case, the law allowed for binding contracts to be entered into electronically, including by email. Many states have even adopted statutes to that effect. Courts had also found that emails could constitute a signed writing for purposes of statutes that require certain types of agreements to be in writing.
However, it was in Stevens v. Publicis that it was definitively decided that an email or series of emails could satisfy a no oral modifications clause.
That case involved an employment agreement pursuant to which appellant Arthur Stevens was to act as chairman and CEO of a subsidiary of respondent Publicis, S.A. for a period of three years. The agreement contained a no oral modifications clause.
Stevens was removed as CEO because of poor financial performance of the subsidiary. A new role for Stevens at the company was proposed by a representative of the company and accepted by Stevens in a series of emails.
The trial court found that the parties had agreed in writing to modify the employment agreement. On appeal, the appellate court agreed, finding that the series of emails memorialized the parties’ agreement to change the plaintiff’s responsibilities under the employment agreement and that the parties’ typed names at the end of the emails signified their intent to authenticate the contents. As such, the series of emails satisfied the no oral modifications clause in the employment agreement.
The effect of the decision is that an email or series of emails can satisfy the requirement both by statute and by contractual agreement that modifications must be signed and in writing. Including a no oral modification clause in your contract may not be enough to prevent modification by email.
As a result, it may be wise to add a provision that explicitly states that the contract may not be modified orally or by email and that any amendment must include a handwritten (not electronic) signature.
For a more in depth discussion of modification of contracts by email and the Stevens decision, see Stevens v. Publicis: The Rise of “No Email Modification” Clauses?, by Stephanie Holmes, 6 Wash. J.L. Tech. & Arts 67 (2010), which also served as the principal reference for this article.