E-Mail Mistakes That Can Cost Your Small Business in Court

As all of us in the business world know, e-mail has revolutionized communication, as its speed and reduced cost (both in terms of delivery and storage) are unparalleled. But as is true with any technological advance, e-mail is not without its downsides. Following are two of the more common pitfalls that you should be aware of from a legal perspective.

1. Oops! I Hit the Wrong Button! Who hasn’t accidentally hit the Send key before they finished their response, or mistakenly hit “Reply to All” instead of “Reply,” thereby carbon copying people on an e-mail we really preferred that they would never see? Although the general rule is that documents or communications that were inadvertently disclosed retain their privileged status (see, e.g., Federal Rule of Evidence §502(b)), this rule only applies provided that the one who sent the message can show that they undertook reasonable measures to assure that this sensitive information would not be accidentally disclosed.
2. There is No Such Thing as an Innocuous E-Mail. It never ceases to amaze me how so many small business owners still do not know that their seemingly innocent e-mails can have a lasting impact on their businesses. In particular, New York’s Court of Appeals (the highest State Court) has explicitly held that a foreign, i.e., non-New York, company can be sued in New York -- even if it never came into New York – so long as its e-mails show a continued effort to conduct or obtain significant commercial business in New York State.

In a parallel vein, although many states still require a “subscribed writing” before a contract may be deemed valid, it bears mention that the legislatures and courts are recognizing with increasing frequency the validity of electronic documents, i.e., those that do not bear a handwritten signature (See, e.g., the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§7001-7006, and the New York State Electronic Signatures and Records Act).

In short, you should make sure that there are some safeguards in place to assure that sensitive e-mails or documents are only seen by the people that are meant to see it. That may mean speaking with your IT professional to establish a safeguard that only allows certain people within your company the ability to send e-mails on particular matters; alternatively, perhaps e-mails on those matters can only be sent once it is approved by two sets of pre-determined "eyes."

In addition, you should be mindful that if you make significant attempts to solicit business from a particular state or jurisdiction, there is a fair chance that you can also be sued there. Finally, do not be deluded into thinking that you do not necessarily have a binding agreement – and therefore cannot sue or be sued for breach of contract (or to fulfill your obligations under the contract) -- until you have a fully signed document. That may not be the case in your jurisdiction. Suffice it to say, this is a question you absolutely MUST ask your small business lawyer when negotiating a contract.

Long Island, New York business litigation lawyer Jonathan Cooper represents businesses and individuals in commercial litigation and other matters ranging from breach of contract and breach of fiduciary duty to trade secret theft in New York's courts located in Nassau, Brooklyn, Bronx, Queens, Suffolk counties, as well as New York City and Westchester. In order to learn more information about business or commercial litigation under New York law, please see Jonathan Cooper's New York business litigation blog; to schedule a free consultation with Mr. Cooper, please contact his main office located in Cedarhurst, Long Island at 516.791.5700, or toll free at 866.374.1164.

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