Receipt of E-mails in the Course of Business Transactions

E-mails have become a popular and indispensable means of communication in business transactions used not only to transmit information quickly but also to conclude agreements. In this context, the German Federal Court of Justice (BGH) had to address the very practice-oriented question as to when a declaration of intent transmitted by e-mail is deemed to be delivered to the recipient. Pursuant to the ruling of the BGH, the declaration is already received at the time when the e-mail is stored on the recipient's server. A revocation of the declaration received is no longer possible thereafter.

BGH, Judgement of 06 October 2022 - VII ZR 895/21

Brief summary of facts

The parties to the dispute argued about the payment of work wages. The Plaintiff's lawyers sent an e-mail ("first e-mail") to the Defendant on 14 December 2018 at 09.19 a.m. In this e-mail, the Plaintiff had its lawyers state that the claim from the final invoice still amounted to EUR 14,347.23 and that, in addition, only legal fees in the amount of EUR 1,029.35 would be claimed as damages for delay. In another e-mail sent on 14 December 2018 at 09.56 a.m. ("second e-mail"), its lawyers clarified less than an hour later that the first e-mail should be disregarded as a final review of the amount of the claim had not yet been carried out by the Plaintiff. The right to assert further claims remains reserved according to the e-mail. On 17 December 2018, the Plaintiff submitted a higher final invoice in the amount of EUR 22,173.17. A few days later, on 21 December 2018, the Defendant transferred to the Plaintiff EUR 14,347.23 on the main claim and EUR 1.029,35 to reimburse the legal fees. The Plaintiff filed an action for payment of the difference of EUR 7,825.94 between the first and the second final invoice.

The Regional Court dismissed the action. The appeal before the Higher Regional Court also remained unsuccessful for the Plaintiff. In the appeal before the BGH, the Plaintiff sought payment of the differential amount.

BGH, Judgement of 06 October 2022 - VII ZR 895/21

The BGH confirmed the decision of the Regional Court and the Higher Regional Court; the appeal was without success. The BGH considered the first e-mail to be an offer by the Plaintiff to conclude a settlement. According to the Court, the Defendant accepted the settlement offer by making the payment a few days later. Thereby, the legal relationship between the parties was completely replaced by the new agreement on a reduced work wage, the settlement (so-called novation). The offer made in the first e-mail was binding because it had been received by the Defendant and had become effective upon receipt (cf. Section 130 (1) German Civil Code (BGB)). The second e-mail was not to be regarded as a valid revocation within the meaning of Section 130 (1) sentence 2 BGB (see below).

The background to the Court's reasoning is the difference between the acceptance period of an offer (Section 147 (2) BGB) and the revocation period of an offer (Section 130 (1) sentence 2 BGB). In each case, it is a matter of making offers to absent parties. A contract is concluded by offer and acceptance. The acceptance period is the time during which an offer is binding and can be effectively accepted. The revocation period is the period of time during which an offer can still be withdrawn by revocation. The revocation period ends with the receipt of the declaration of intent. This means that revocation is only possible before or at the same time as receipt of the declaration of intent (cf. Section 130 (1) sentence 2 BGB). The acceptance period, on the other hand, runs until the time when the recipient's response can normally be expected, cf. Section 147 (2) BGB. In the present case, the BGH confirmed that the offer made by the Plaintiff could be accepted within an acceptance period of approximately two to three weeks.

Receipt of a Declaration of Intent by E-mail

Since the revocation of an offer is only possible until the receipt of the offer, the revocation period decisively depends on the receipt. According to settled case-law, a declaration of intent among absent parties (e.g. an offer transmitted by e-mail or mail) is deemed to have been received if it has reached the recipient's sphere of influence in such a way that the recipient has the opportunity to take note of the content of the declaration under normal circumstances. According to the Federal Court of Justice, an e-mail that is received on the recipient's mail server within normal business hours, i.e. is made available to the recipient ready for retrieval, is already delivered when it is received on the recipient's mail server. Whether the e-mail is actually retrieved, opened, and read by the recipient is irrelevant. The only decisive factor is the possibil-ity of taking notice.
Therefore, the first e-mail, with which the settlement offer was made, was already delivered on 14 December 2018 at 9.19 a.m. The second e-mail, which was received 37 minutes later, therefore did not constitute an effective revocation of the settlement offer. This is because a revocation of the settlement offer was no longer possible after receipt. The settlement was reached by transferring the offered amount on 21 December 2018 - i.e. still within the acceptance period of two to three weeks. This leads to the effective conclusion of the contract or, in this case, to the conclusion of the settlement. There is no legal basis for a later additional claim for the difference, as the Plaintiff asserts in the lawsuit. The contract concluded between the parties, on which the Plaintiff's original claim for payment of the higher work wage was based, was replaced by the settlement, which reduced the work wage claim. Furthermore, the BGH clarified that the acceptance of an offer that was unsuccessfully revoked - due to being too late - did not violate the principle of good faith and was thus effective.

Background

With its ruling, the German Federal Supreme Court decided on the extremely practice-relevant, yet so far unresolved question of the receipt of a declaration of intent by e-mail. The decision relates to the receipt of e-mails during normal business hours. The question of when an e-mail is received when sent outside normal business hours or on public holidays has not yet been clarified. The facts of the case decided by the BGH did not give rise to a need to clarify this question.

There are different opinions on when an e-mail can be expected to be retrieved in the course of business when it is received outside business hours. It is predominantly argued that the receipt then takes place on the following business day, at the latest by the end of business hours. It is generally agreed that actual knowledge of the content of the e-mail is not required for receipt.
For the sake of comparison: According to prevailing opinion, a declaration of intent transmitted by letter is delivered when it is received in the recipient's letterbox. The digital counterpart to the letterbox is the mail server. According to the BGH, the server is already within the recipient's sphere of influence.

Note

It is encouraging that the BGH has now ruled on the previously unresolved question of the receipt of an e-mail, the most common type of communication in business transactions. However, some legal questions remain unanswered: The BGH's decision only relates to business transac-tions. It remains unclear whether and to what extent the principles on the receipt of e-mails also apply to private individuals.

In practice, the problem of the burden of proof still remains. It is often not technically feasible to prove that an e-mail was stored on a (third-party) server. However, this is a prerequisite for the receipt. Not every server supports the automatic sending of a transmission confirmation. A read receipt is not suitable because it is up to the recipient to send it or not. Moreover, the fact that the e-mail was actually noticed is irrelevant for the receipt. However, mere proof that the e-mail was sent, and that no non-delivery notification was received is not sufficient to prove receipt. This is because there is no legal presumption that an e-mail sent arrives at the recipient's server, any more than there is a presumption that a letter arrives at the recipient.

The BGH's decision also demonstrates that once an offer has been validly made, it is in fact not revocable when transmitted by e-mail, as the e-mail arrives on the recipient's incoming server within seconds, is ready for retrieval and has thus been delivered. If one wishes to reserve the right to make changes to the offer, it is therefore recommended to make this clear by means of an appropriate disclaimer. For example, the offer could be marked "without recourse" or "subject to change". This is the only way that a unilateral adjustment is still possible at a later point in time. This applies to offers in general. After all, even if the offer is sent by regular mail, it must be expected that it will be accepted quickly by the recipient. The revocation or amendment of the offer then is too late.

Dr. Birgit Münchbach