In February the New York Times ran a story warning real estate brokers and property owners to pay close attention to the e-mails they send, after a ruling in Manhattan Supreme Court stipulated that e-mail messages carry just as much sway as written documents in negotiations. The ruling is one those who work in publishing should take heed of, as so many deals are struck, and sometimes cemented, over e-mail.
In a recent situation highlighting the potential problems of doing business via e-mail, a dispute arose between an agent and an audio house. After a deal was essentially struck, but papers never signed, for an audio edition, the publisher went to work producing the title. When the audiobook was released and the agent was unhappy with the quality of the final product, the parties started to quarrel over whether a deal was ever consummated.
Since the audio house did not have a signed contract from the agent for the audiobook, even after it was put on sale, the agent pressed for the title to be pulled from circulation. The publisher countered that it thought it had an agreement in place because of the terms ironed out over e-mail. In this case, the issue was resolved before being forced into court—the audio house pulled the book off sale—but questions remain about what might have happened had it become a legal issue.
Consultant Seth Gershel, who worked in audio publishing, said that it's common practice for an audio publisher to start production on a title before a signed contract is in hand, as the audio house in this instance claimed. According to Gershel, the "art" of audio publishing, and the biggest difficulty, is that in order to release the audiobook at the same time as the print book, an audio publisher needs to start production before contracts are signed and, often, before a manuscript is finalized. While Gershel said he would not publish a title without a signed contract in hand, and without the approval of an agent and author, he was not sure what a court might have to say about e-mail exchanges.
A lawyer PW contacted who deals extensively with publishing, and spoke on condition of anonymity, said e-mails "can constitute ‘writings' and an enforceable contract," but only if the essential contract terms are in those e-mails and agreed upon by both parties. Lloyd Jassin, another attorney experienced in publishing work, cited the October ruling regarding the real estate transaction as something that could "have broader application." While Jassin noted that "the facts always determine the outcome," he thinks there are some essential questions to ask in situations like this one. "Did the agreement contain all of the relevant terms? Was there assent to those terms? Was there a disclaimer?" Overall, though, as the New York court showed, Jassin believes the trend supports the argument that e-mails can be legally binding.
Paul Aiken, executive director of the Authors Guild, isn't so sure. He said that one of the protections in copyright law is that you cannot license any rights protected under copyright without a signed agreement. Asked whether a court might rule that e-mails could stand, Aiken said he didn't know of any case that laid a foundation for that and said it's "possible a court would say it is sufficient," but he still thought it unlikely. "It's hard to see how [an e-mail] would be binding. There has to be a signed agreement. I don't think a court would rule that [an e-mail] is enforceable."
