Contract issues - the "mailbox rule" in the 21st century

In the olden days - the 1990's - a party in a contract dispute could rely on the common law doctrine that a contract deposited into a mailbox with the proper postage within the contract acceptance period was an accepted contract, binding upon the offeror. 

But what happens in a day and age when no one mails letters?

We will soon find out when the U.S. Court of Appeals for the Ninth Circuit renders its decision in the matter of Paramount Farms v. Ventilex B. V..  Paramount Farms bought a $300,000 piece of machinery from Ventilex USA.  The former claimed that the latter guaranteed that the equipment would be certified for use in the US.  The equipment wasn't certified.  Paramount wanted their money back.  Ventilex USA said no.  The fight was on.

The "mailbox rule" issue arose because Paramount claimed that Ventilex B.V. had guaranteed that their equipment would pass certification by not protesting when Paramount sent an email to the vendor requesting confirmation of the guarantee.  Ventilex B.V.'s defense - how do you know that we received the email?

The legal issue is whether Ventilex USA was made an agent of Ventilex B.V., making the parent company equally liable for any contract breach, by virtue of copying the parent on the emails in question.  This is important because Ventilex USA declared bankruptcy after the dispute arose, so recovery is only available from the parent company.

However, U.S. District Judge Lawrence O'Neill of Fresno had ruled previously that agency - and with it, liability - was not created just because the parent did not challenge the terms established in the emails.

Which means that if the Ninth Circuit affirms the prior decision, Paramount Farms will have to line up behind Ventilex USA's other creditors in bankruptcy court.

For the rest of us, it will be the beginning of the determination as to whether we can legally rely on having sent an email.

We will have to wait and see.

Disclaimer:

This article was published to provide information about the law, designed to educate readers about issues in which they may have an interest. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although I go to great lengths to make sure the information provided is accurate and useful, I recommend you consult a lawyer if you want professional assurance that the information, and your interpretation of it, is appropriate to your particular situation.