I was wondering if anyone has had a chance to review the Alabama bankruptcy case referenced below (In re: Western Health Care, LLC, Chapter 11 debtor)

http://tinyurl.com/4fexlou

The case seems to hinge on the legality of renewing a lease by email.  The court appears to say no.  I have extracted some of the courts reasoning below

"Although informal, it is difficult to read the email-exchange between the parties and conclude other than that they both agreed to an extension of the Lease; however, does the email-exchange constitute a writing sufficient to satisfy Section 2.02? The Court could locate no decision based on Alabama law regarding whether email-correspondence satisfies a condition expressed in the parties' original written contract that subsequent agreements related to their original contract must also be in writing"

And goes on to say

"Email-correspondence is not a writing in the conventional sense, it is an electronic transmittal of information. In this case the parties email-exchange cannot be elevated beyond a discussion of issues pertaining to the Lease. Before the advent of email, such an exchange would perhaps have taken place over the telephone. If such a telephone conversation had been recorded and later transcribed, the printed transcription would not be considered a writing satisfying a requirement in a previously written contract that an extension of its terms be evidenced by a formal writing. While the parties could have agreed that an email-exchange could constitute a writing sufficient to satisfy the terms of the Lease, they did not choose to do so. The Court will not casually ignore the bargained-for contract provision requiring that an extension of the Lease be evidenced by the parties' written agreement-a tangible written document with signatures-to do otherwise fosters uncertainty with regard to the status of important contractual obligations."

I was wondering if anyone knew if this decision is related to specifics of state law or it might have broader application in the view that email correspondence may not be generally relied upon to document a transaction.


David B. Gaynon
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Huntington Beach CA, USA



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