E-Mail Notice Effective Even Though Prohibited by Contract
Teaching conditions is about as confusing as it gets. Distinguishing express from implied conditions is hard. Seeing courts enforce express conditions strictly seems rough after we’ve done some substantial performance cases, and then there are issues of waiver and forfeiture. We have a new case out of Massachusetts that finds an express condition satisfied through a means that the contract forbade, but it turns on yet another tricky doctrinal question — whose interest is protected by the condition?
Back in 2010 Sourcing Unlimited, doing business as and therefore known as Jumpsource, entered into a lease with landlord Cummings Properties, LLC (Cummings). After six years, the lease provided that it would automatically renew unless within a six-month window ending six months before the termination date, either party served written notice. The lease provided that notice from Jumpsource must be “by constable, or delivered to LESSOR by certified or registered mail, return receipt requested, postage prepaid, or by recognized courier service with a receipt therefor . . . ” Constable? The lease also provided that notice by electronic mail was without force or effect.
Notwithstanding this provision, Jumpsource provided timely notice of its intent to terminate the lease by e-mail. The parties corresponded on other matters, but after the six-month window had closed, Cummings informed Jumpsource that its e-mail notice was ineffective and that the lease would automatically renew. Jumpsource moved out and, the trial court ruled that the electronic notice was effective.
On appeal, Cummings argued that notice by a means expressly prohibited by contract is ineffective. Jumpsource responded that its notice was effective even though improper, because Cummings had actual notice of its intent to terminate the lease. In Sourcing Unlimited, Inc. v. Cummings Properties, LLC the Massachusetts Appeals Court found that Jumpsource had the better argument.
The court first noted the general rule that options are strictly enforced. However, Massachusetts law carves out an exception where the deviation from the requirements of the option are immaterial. It noted that Cummings did not allege that it had been prejudiced through the faulty notice. “Where the fact and timeliness of delivery were not in dispute, the differences between the manner of notice required and the notice provided were ‘of no consequence.'” Moreover, the policy of requiring strict compliance with options is less compelling in a situation such as this one, where both parties have the option not to allow the automatic renewal of the lease to proceed.
The court noted the narrowness of its holding. Oral communications would not be sufficient notice where the contract required written communications. But on the facts of this case, Cummings had all the notice it needed. There was no ambiguity as to Jumpsource’s intentions, and Cummings did not allege that it was prejudiced by the non-conformity of the notice it received.