Recently, we discussed some of the legal implications of sending a text message to deliver a notice that is required under a contract. As we discussed in part I of this series, unless notice-via-text-message is listed specifically in the contract as a proper method of notice, it is probably best to not send notice via text message. In our example, the contract allowed four methods of notice — via personal delivery, via facsimile with confirmation, via overnight courier, and via US mail with return receipt requested. Each has the advantage that there is or can be proof of delivery.

In this part II, we follow up with the other side of the equation: What if you receive a purported “notice” sent via text message? First, if you receive such a notice-via-text-message, you should consult an experienced San Diego corporate attorney to obtain advice and counsel before doing nothing or taking some other action. Assuming that “notice-via-text-message” is not specifically permitted under the contract, receiving such a “notice” puts the receiver in a legal quandary. There is legal risk if you reply or if you do nothing. If you do reply, then the sender has proof of receipt and can argue actual knowledge. If you do nothing and do not reply and act as though the notice is invalid, then, once a lawsuit is filed, the sender still has at least four legal arguments that notice was valid:

• Constructive notice
• Waiver
• Modification by course of conduct
• Estoppel

Since our example assumes you actually received and read the text message, the first argument to be made by the sender is that you received the notice and, thus, you had constructive or actual notice. During litigation, your phone and text message records can be obtained from the service provider. Those records might be sufficient proof of receipt and that you actually opened the text. Under the California Civil Code § 18, this might be sufficient. The provision states that:

“Notice is:

1. Actual–which consists in express information of a fact; or,

2. Constructive–which is imputed by law.”

Further, section 19 provides: “Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, has constructive notice of the fact itself in all cases in which, by prosecuting such inquiry, he might have learned such fact.” Normally these provisions are used for non-contract cases. A judge still might make use of them to say that notice-via-text-message should be deemed compliant with the contract.

Next, the sender might argue waiver and/or modification by course of conduct. Legally speaking, waiver is the doctrine that the receiver of the text message acted in such a way as to waive the precise method of sending notice written in the contract. A related idea is modification by course of conduct. Waiver and course of conduct are good legal arguments for the sender if the receiver has accepted text messages in the past or has sent text messages. Finally, estoppel is a legal doctrine that says that it would be unfair to the other side to insist upon strict adherence to the methods of notice. For estoppel to apply, the sender would need to act in a manner that indicates that they think notice has been effective but you, the receiver, encourage that belief or remain silent. As an example, assume the contract at issue is a real property lease. The tenant sent notice of termination and then begins to move out. You, the landlord, do not believe the notice is valid or sufficient but say nothing as the tenant loads the moving truck with furniture. By saying and doing nothing, arguably you have encouraged a false belief and the tenant acted on that belief. Under those circumstances, a San Diego judge might well side with the tenant on the question of whether notice-via-text-message was valid or not.

As can be seen, in the real world, contractual notice provisions can be confusing. Sometimes the proper course of action it is unclear. As noted, it is best to consult an experienced corporate attorney. In part III of this series, we will discuss some additional legal issues if you receive this sort of notice and discuss various possible responses.

California Business Contracts: Contact San Diego Corporate Law Today

If you would like more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can be reached at (858) 483-9200 or via email. Mr. Leonard’s law practice is focused on business, transactional, and corporate matters. Like us on Facebook.

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