GAUGING THE EFFECTIVENESS OF EMAIL DISCLAIMERS

By James Forrest

Email disclaimers—we’ve all seen them, just below the sender’s email signature, taking up valuable screen space on our computer/tablet monitors.  Many of you reading this post may have seen more than a few emails from me containing just such a disclaimer at the end of each email that begins with the heading “CONFIDENTIAL AND PRIVILEGED.”  Some email disclaimers are fairly short, and many are much longer (and often longer than the actual text of the emails they relate to!).  Busy business professionals typically don’t take the time to read these disclaimers as they zip through their inboxes daily, however, these professionals should understand the basics of email disclaimers.  Keep reading!james

From a legal perspective, email disclaimers are intended to address the recipient (or someone who has access to the recipient’s inbox), alerting them to appropriate use, rights, restrictions and privileges related to the email’s content.  Courts generally struggle with the enforceability of email disclaimers, primarily because the receiving parties do not officially “accept” the terms contained in the disclaimers (as you would accept the terms of a proposed contract from another party by signing your name and returning the contract).  Rather, there is merely an implied acceptance by the recipient’s receipt of the email and lack of a direct response to the sender repudiating the email disclaimer terms.

Email disclaimers typically address the following substantive areas: making clear that communications by email—even those containing negotiations—do not create a binding contract, establishing confidentiality, preventing employer liability, and complying with regulated professional requirements. Let’s take a closer look at each of these areas, and we’ll some practical considerations as well.

Contract Creation

Many email disclaimers state that an email and/or discussions amongst the parties does NOT form a binding contract. A disclaimer may make it clear that contract terms are not set without further action or an execution and delivery of a definitive, written agreement.  In other words, “you can’t hold me to something that I said in an email unless and until we enter into a written contract.”  This is legally important in that binding contracts can and are formed when there is a “meeting of the minds” – and parties can (and often do) argue that such a meeting of the minds has occurred when there is business exchange via conversation or email regarding pricing and other related contract terms.  If a legally binding contract is formed via email, then the company would limit itself with regard to the standard protections it normally enjoys when a customer signs its customer contract template such as limitation of liability, disclaimer of warranties, favorable dispute resolution in its chosen jurisdiction.

Confidentiality

Utilizing email disclaimers to reinforce confidential communication has shown value in some circumstances.  Generally, this section of an email disclaimer will state that all information sent is for the intended recipient and should not be disclosed to any unauthorized party.  It is virtually the equivalent of the recipient agreeing to the terms of a full blown Non-Disclosure Agreement by simply receiving an email.

Preventing Employer Liability

A company is ultimately responsible for the actions of its employees, including the content of any e-mails they send. A disclaimer may decrease liability if a company can show that it has correctly instructed its employees not to send libelous, inappropriate, or defamatory statements.  This would be better addressed, however, by focusing on an employee handbook/training and not by a unilateral statement to other parties, such as an email disclaimer.

Professional Licensing Requirements

Disclaimers may be useful for licensed professionals such as lawyers or financial/tax advisors (accountants, retirement planners) because of requirements from their licensing body or government agencies about communication with the public.

Overall, the value of a boilerplate email disclaimer is limited and questionable. Courts are not comfortable enforcing terms on a recipient of an email that is unlikely to read or understand what terms he or she may be agreeing to.  Factors that courts may consider when determining enforceability include the sophistication of the receiving party, the content of the disclaimers, and the conspicuousness of the disclaiming language.

Even though enforceability of email disclaimers is questionable, prudent business executives must consider the use of email disclaimers for three very important reasons.  First, there is a deterrent effect that the sender may benefit from by using a disclaimer.  For example, an unintended recipient of an email may be less likely to post the contents of an email to Facebook if the email contains restrictive confidentiality language.   This can be very important to companies that have valuable trade secret, type information in their email correspondence.  Second, there is a relatively low amount of time and cost to implement the use of email disclaimers.  It should take an IT person less than a half hour to successfully implement a required signature for each company employee.  Lastly, as more and more businesses use email disclaimers, it may seem unusual for an executive to not use them – which may open up an executive to question by the Board of Directors/Managers.

We’ve helped many companies with the form and substance of their email disclaimers.  If you have further questions or concerns, please let us know at info@forrestfirm.com!