A commercial tenant asked for a declaratory judgment that it had provided proper notice of its option not to renew its lease. The trial court and the appeals court ruled that the tenant’s emails to the landlord were adequate notice, even though the lease prohibited electronic notice. The landlord had argued that specific compliance with the lease notification provisions was necessary because this was effectively the exercise of an option.
The tenant argued that the option provision’s purpose was fulfilled because the landlord had actual notice well within the option period that the tenant had exercised its option not to renew. The Court noted that while conditions for exercising an option require a stricter adherence than may be the case in provisions of a bilateral contract, Massachusetts courts have recognized limitations to the concept of strict compliance with options. It has distinguished material flaws in the exercise of an option from minor deviations, particularly those involving the method of delivery of notice where neither the timeliness nor the fact of delivery of notice was disputed.
WHY THIS IS IMPORTANT… This is the latest growing trend finding that electronic mail communication is adequate for most contract purposes. This trend began with cases deciding that a contract could be formed by exchanging electronic mail. Because the exercise of options has required stricter compliance with deadlines and notice requirements, the declaration that electronic mail is adequate for option notice, even if the contract says otherwise, is another example of the growing acceptance of electronic mail as a substitute for other forms of communication.