Many business transactions justify the preparation of a written contract signed by both parties. However other smaller transactions, such as a software company doing a new small project for an existing large client, may not justify going through the formal process of a signed contract including comments from the large customer’s in-house counsel. For those transactions, it would be prudent to provide an e-mail exchange with the decision makers at the customer company regarding the scope of work, the timetable for the work, a description of what will be done and what the cost will be. The reason for such a written exchange is not only to defend yourself in case of an allegation of breach of contract or a need to enforce the agreement. The other reason is that with an e-mail exchange, both sides are forced to look at the various issues and make decisions as to the respective rights and obligations of the two parties.
Many breach of contract disputes arise from honest different expectations by the parties and if they, through a signed written contract or an e-mail exchange, are “on the same page” such disputes can be avoided. Such an e-mail can be phrased in a conversational tone and ending it with a question such as “Is this proposal acceptable to you?” will likely prompt a polite response back either agreeing or making a counterproposal. This avoids the parties entering into an agreement without all the specifics worked out which could end with both parties feeling their expectations were not met.
If the transaction is critical to your business, it is worth spending the time up front to get a signed detailed contract rather than an e-mail exchange.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].