Most commercial real estate agreements contain a clause detailing how the parties are to give notice to one another if a notice needs to be sent under the agreement. Events triggering the need to send a notice might include waiver of a condition, extension of time periods, exercise of an option, or termination of the agreement. Notice clauses can become an issue if one party asserts that it was sent a notice that was not done properly or was not received in time. This risk underlines the importance of clear and unambiguous notice clauses.

The following are some technological and other "glitches" that may affect whether a notice was sent properly and received on time:

1. Notices sent by fax

  • recipient's machine is out of paper
  • recipient's machine is out of ink
  • power outage
  • fax machine not turned on
  • date/time recording is incorrect
  • paper jam

2. Notices sent by e-mail

  • problem with server
  • recipient's e-mail address incorrect
  • e-mail blocked by junk mail program
  • e-mail stuck in "cyberspace" due to length of Attachments
  • recipient does not read notice because it was from an unknown sender (e.g. the sender's assistant sent the e-mail and his or her name appeared as the sender)
  • date/time recording is incorrect
  • "out of the office reply" arrives from the recipient, raising uncertainty over whether the notice is considered to have been received (e.g. do you need to try another form of communication?)
  • recipient declines to have a "read-receipt" sent back to you

In terms of the wording of notice clauses, the parties should consider the following types of issues:

  • Notices received after 5:00 p.m. on a business day—are they deemed to be received that day or the next business day?
  • Notices received on non-business days—are they deemed to be received on the next business day?
  • Notices sent to a particular person's attention when sent to a business—what if the agreement is intended to be in force for a long period of time (e.g. 10–20 years) and the addressee no longer works at the business? Is it better to write "Attention: President [or some other officer]"?
  • Notice clauses cc'ing solicitors for the parties—should a recipient's lawyer also receive a copy of the notice?

Notice clauses are critical in real estate agreements. Parties to the agreement need to be sure that the notice clause clearly sets out how they expect notices to be sent and received.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.