Emails valid in court

Legal General Legal Matters
1

We have had a customer where I work, where the relationship went awry, as the US customer believed that the company I work for had promised lower prices than we believed we had.

Looking through the emails, it’s unclear what we actually promised under the early email negotiations, however our interpretation of it is that we might have led the customer to believe that we could sell the goods for lower price than possible.

Now, while the proceedings so far have been somewhat fucked-up (and we are to blame for that), the heart of the matter is that the company I work in is being threatened with a lawsuit. Our concern is that the emails leading up to the breakdown of negotiations will count as legal evidence of agreement in the US.

Any of your american lawyers here have any viewpoints on that?

Moreover, when you make a new offer with different component parts, does that imply that any earlier offers are void?

Is the opponent able to pick and choose from different offers and put that together in an email and call it an (enforcable) agreement?

2

This is a problem that often comes up with import export matters. The average Chinese point of view would be to ignore it.

Consider this: Where is the wronged party going to sue? In a Taiwan court? That will be expensive. In addition to lawyer fees, they will have to pay nearly 2% of the amount sought “recovered” to the court as a bond. They will then have to pay more if they want the court to actually enforce the judgement by auctioning off the defendant’s property or whatever.

Additionally, in my experience of dealing with the Taiwan Courts, I can tell you that there is very little recognition of “abstract damage.” What you are talking about here is “abstract damage” . . . . . in other words, what actual documentation can the foreign party produce to show that they have suffered REAL MONETARY DAMAGE at this point??? And even if they can produce such documentation, does it in any way DIRECTLY involve your firm??? More likely, it is the result of the decisions they made . . . . . based on incorrect information . . . . . which they collected.

They may have been severely inconvenienced . . . . . they may have forgone the chance to buy these items at better prices from other suppliers . . . . . they may have had arguments with their staff members . . . . . . but none of those things are equivalent to proving direct FINANCIAL DAMAGE WHICH IS THE RESULT OF YOUR FIRM’S DIRECT AND DELIBERATE ACTIONS !!!

P.S. I didn’t read anywhere in your initial posting that your firm had actually signed a contract to provide them with certain types of merchandise at a certain price.

3

Dear Richard,

No contracts were signed.

What they are after is a reimbursment of their travel costs. They were the ones who proposed that they came and visit us.

4

What kind of a cheapskate company will try to get its travel expenses reimbursed after they find out their Taiwan supplier was quoting the wrong price or changed the price/quality of goods offered. This is the norm in Taiwan and China. If the company is that cheap, then I doubt they will spend the cash needed to take any legal action.

5

An american one, located in the mid west.

Some but not very deep experience in dealing with asian.

6

If the negotiations broke down, I don’t see how any contract could have been concluded.

7

Our primary problem was that the negotiations by email were very protracted. We suggested firstly a price. Then when they found that price unacceptable we told them that if they gave us the volume needed to get the price down, then we would give the gain back to them. However we also stated that the pace of which we did any price reductions would be set by their order flow.

When that failed, we told them that we would give them a 10% discount if they on their hand took care of one of the US certifications, while we took care of the other (We are in the final stage for UL, and we are not that far on NSF).

Then they said OK, and later sent us an agreement, where all our concessions were listed. Moreover,they told us that they were coming to visit to conclude the negotiations.

Our reply was that we would look forward to see them and negotiate further, however on my advice we did not give them any affirmative or negative answer on the “agreement”. Moreover, we did not tell them that the different solutions and concessions suggested by us would not all be possible at once.

They now want to file a case in a US court, believing that a US ruling will be enforcible here.

We have lost a potential customer who were interested in our range, and without having big sales in the US, we now have a bad reputation in 4 US states. Our concern is that they are able to by legal means to hamper our marketing roll-out in the US and that if for instance a senior manager was to go to a US trade show, that he/she would risk any kind legal retribution.

8

[quote=“Mr He”]Then they said OK, and later sent us an agreement, where all our concessions were listed. Moreover,they told us that they were coming to visit to conclude the negotiations.

Our reply was that we would look forward to see them and negotiate further, however on my advice we did not give them any affirmative or negative answer on the “agreement”. Moreover, we did not tell them that the different solutions and concessions suggested by us would not all be possible at once.[/quote]

Sounds like no agreement was concluded.

The primary statute regulating the enforcement of foreign judgments in Taiwan is the ROC Code of Civil Procedure. According to Article 402 of the CCP, no final judgment rendered by a foreign court shall be valid in Taiwan if any one or more of the following circumstances exist:

  1. The foreign court that rendered the subject final judgment has no jurisdiction over the case according to Taiwan law;

  2. The foreign court rendered a default judgment, in which the defaulting party is a Taiwanese citizen, and the summons or court orders necessary for commencement of the action were NOT duly served on the defaulting party in that foreign country or through judicial assistance in Taiwan;

  3. The judgment rendered by the foreign court is deemed inconsistent with Taiwan’s public order or good morals; or

  4. Judgments rendered by Taiwanese courts are not reciprocally recognized by the subject foreign court.

Yes, generally US judgments are enforceable in Taiwan. But, they’re a hassle. If the US plaintiff doesn’t properly serve your company and your company ignores the improper service and the US plaintiff obtains a default judgment in the US… that judgment will be unenforceable in Taiwan. The US plaintiff will have to serve your company by Judicial Assistance…

Article 402 provides that a foreign final default judgment shall not be enforceable in Taiwan if the defaulting party is a Taiwanese citizen and he was not properly served with the summons or order necessary for commencement of the action. If the defaulting Taiwanese party has been duly served with the summons or order in the country of the foreign court, or if he has been served through judicial assistance in Taiwan, process will be deemed by Taiwanese courts to have been properly served.

As to the procedure for judicial assistance in Taiwan, the principal relevant statute is the Law Governing the Extension of Assistance to Foreign Courts (LGA). The LGA stipulates that:

(1) A request for judicial assistance must go through proper diplomatic channels (TECO and AIT for US plaintiffs);

(2) A request for judicial assistance must set forth the name, nationality, domicile, residence or place of business of the person to be served; and

(3) The relevant documents to be delivered to the Taiwanese authorities must include certified Chinese translation(s) or copy(ies) thereof.

Article 402 provides that if a final judgment rendered by a foreign court is considered incompatible with public order or good morals in Taiwan, then said judgment shall be unenforceable in Taiwan. This includes any judgment which is contrary to the laws of Taiwan and/or injurious to the generally accepted moral standards of the Taiwanese public. If under Taiwan law no contract was formed, I don’t think a judgment in the US would be enforceable in Taiwan.

9

Dear Tigerman,

That was a very good and comprehensive answer.

The scenario, some people literally around me worry about is that our managing director goes to the US for some reason and is detained, as a default judgement forcing us to pay some US$5000 plus various fees has been passed.

Is that a realistic risk?

10

[quote=“Mr He”]Dear Tigerman,

That was a very good and comprehensive answer.

The scenario, some people literally around me worry about is that our managing director goes to the US for some reason and is detained, as a default judgement forcing us to pay some US$5000 plus various fees has been passed.

Is that a realistic risk?[/quote]

This is a civil matter… not a criminal matter. I don’t see how one of your managers could be “detained”.

11

You don’t need to call me “dear”… :wink:

12

Thanks a lot!

If we get the guanxi system back, you are looking at a 4 figure allocation.

13

Seems that the big problem you have is the sullying of your name in four US states. This, to me, is the real issue you need to address.

14

Yes, but we can only do that by paying up and hope that they will keep their side of the bargain.

As the 4 states are not bil users of our product, we can establish a good sales network on the coasts, and once we have the name, one pissed off distributor will not mean that much. There’s nothing else we can do, unless we give in.

15

If I told my boss about your company’s situation, he would laugh himself out of his chair. It seems to me that this U.S. company just doesn’t have a clue. No matter how detailed you were in your emailed proposals, no contract was signed, right? I have seen “email” contracts before; they are very clear about how each party should “sign.” I still don’t know if or when they are legally binding, though, and I’ve never seen them used for anything important, anyway. I’m not a lawyer and I work in HK and the mainland, but I would bet money that this case would be tossed out of a Hong Kong court before the lawyers had a chance to sit down.

16

If I was trying to set up an import deal with an overseas company, I wouldn’t consider any deal to have been concluded until I had been to see the supplier. I would want to sit down with them, work through the agreement line by line, speculate about what-ifs, and be sure that we have a good relationship so that we can do business.

Things change, suppliers have problems, buyers sometimes have problems. If you have a good relationship and are both committed to doing business together you can try and work things out. My motto if a deal ever goes bad is “what can we save?” But saving a deal involves both sides working together, and a good deal is one that benefits everyone.

It sounds to me as if these people don’t consider the relationship in these terms. They want to extract the maximum concessions from you. Not good people to do business with, although the root problem could simply a lack of willingness to trust. Maybe they had bad experiences in the past?

But if they thought the deal had been done then why did anyone have to travel to Taiwan? It’s an unnecessary expense. In my book they came to do the deal, and are upset that they didn’t get it. Threats of legal action are just sour grapes.

I would call them up, be conciliatory, and see if you can salvage anything. If you can make them understand that legal action would be a waste of their money you might be able to get them to do some kind of deal - you offer to do business on terms that allow them to recoup something at your expense. You ‘lose’ in the short term, but gain a customer that you will make money out of in the long term. At least you will have tried, but don’t admit fault. You’re doing this out of a desire to move forward, not to try and pay for mistakes you haven’t made.

If that fails then point out politely that they are just wasting more money by involving lawyers. You’re not at fault, and if they take any action to harm your good name then you have no choice but to protect yourselves. They can bitch in court, but if they do it anywhere else they are risking a libel/slander suit. Wouldn’t life be much easier if we avoided all that and tried to win together, Mr Customer?

You might also want to read a short story by Frederick Forsyth titled ‘Privilege’.