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Email E&O Disclaimers: Do They Mean Anything?

Email E&O Disclaimers: Do They Mean Anything?

E&O disclaimers in emails are common but they don't offer much legal protection. Find out how to strengthen your disclaimers to better protect your business.

Thursday, January 9, 2014/Categories: errors-and-omissions

You've probably received countless emails that have a disclaimer at the bottom saying something along the lines of "this email and contents are intended only for the recipient" or "contents of this email are not meant to be legally binding."

In fact, you've probably received so many emails like this you just ignore the lengthy fine print at the bottom. That's the problem with disclaimers. Very few people actually read them.

But do they mean anything? Can they actually prevent an Errors and Omissions lawsuit? Yes and no. For the most part, email disclaimers don't protect IT professionals.

In this article about email disclaimers, the Economist puts it bluntly: email disclaimers "are mostly, legally speaking, pointless." That's because they’re a one-sided contract. It's a legal agreement the sender imposes on the recipient.  Because of that, there have been almost no lawsuits in which an email disclaimer was taken seriously.

Case Study 1: Email Disclaimers and E&O Liabilities

The issue of email disclaimers might come up if you're named in an Errors and Omissions lawsuit. A client sues you, claiming you quoted them one price in an email, but later charged them a different one.

You argue the email was not legally binding because your disclaimer said this explicitly. The email was only meant as an estimate. Unfortunately, the email disclaimer probably won't hold up in court. The overwhelming tendency of judges is to ignore these disclaimers. If your email was misleading, you could likely be sued.

When a Disclaimer Can Help

Scott Talkov, a criminal litigation attorney, analyzed the situations where disclaimers can be helpful. He suggests only putting a disclaimer on certain emails and putting it at the top of the email or in the subject line. Courts tend to rule that disclaimers slapped on every email make them less relevant.

In other words, if every email you send says, "this email is not legally binding," then a judge won't take any of your disclaimers seriously. But if selectively applied to relevant emails, disclaimers might help in certain circumstances (we'll look at an example below).

Even if a disclaimer can protect you, you should never rely on it to do so. The majority of lawsuits ignore email disclaimers. Odds are, they won't protect you.

Case Study 2: Hiring Practices and Email Disclaimers

Disclaimers might offer protection if you are in the process of hiring someone. Let's say you're looking to hire an independent contractor to help you with an IT project. You exchange a few bids via email and settle on a price. However, you're not able to sign a contract yet. You're still waiting for your client to officially hire you.

Some businesses use legal disclaimers in situations like this to prevent independent contractors and vendors from thinking they've been hired. For instance, you might include a disclaimer at the top of your email stating…

"This email does not in any case constitute a binding offer, acceptance or opinion for the sender unless so set forth in a separate document."

Clear language like this can help prevent a misunderstanding. But you need to remember that most people don't read the disclaimer anyway. The best way to communicate with potential hires is to do so directly in the body of your email. Rather than rely on a disclaimer, it's probably better to say, "this is not a contract offer" in plain English.

3 Takeaways about Disclaimers

To summarize, there are three important things to know about disclaimers…

  1. You can't rely on disclaimers alone. Even if you have a disclaimer, you can still lose a lawsuit.
  2. If you use disclaimers, don't overuse them. Don't include a disclaimer on all your emails. Instead, only attach one to emails where you are concerned the recipient will misconstrue your message. If used selectively, disclaimers may offer some legal protection.
  3. Use disclaimers to communicate better. If you have a disclaimer, don't hide it at the bottom of an email. Put it in at the top or in the subject line. Show it to your recipient. Make it clear that this specific email is not contractually binding.

There is some good news, however. While email disclaimers can't protect you from a lawsuit, small business insurance can. When you're sued over mistakes or email miscommunications, Errors and Omissions Insurance can pay for the cost of a lawsuit. To learn more about insurance for small businesses, check out this sample quote for business insurance that covers an IT business.


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