Recently, a Pennsylvania Superior Court ruled in a business litigation case where a contingent fee agreement, which was set forth in an email between an attorney and client, was enforceable against the client even though the client did not sign it.
In that case, the client owed approximately $40,000 to his attorney under that contingent fee agreement. The Court found that client should be responsible for about $39,000 of it. The main takeaway in that case has major impacts on how attorneys or other businesspeople can collect their fees. The fee agreement between attorney and client was enforceable since it appeared in an email between the parties and no signature by the parties was necessary. In that case, it may also be important to note that the email that contained the agreement requested a $32,000 upfront fee which the client promptly paid.
Emails Constitute as “In Writing”
The client attempted to argue that the fee agreement was not enforceable since the Pennsylvania Rules of Professional Conduct (RPCs) for attorneys requires that contingent fee agreements must be in writing. The court found that the client’s argument failed for two reasons: first because the Rules of Professional Conduct for attorneys do not have the same weight as substantive law in civil proceedings since those rules are intended to be relied upon in attorney disciplinary proceedings; secondly, the court said that the contingent fee agreement was in fact in writing, as required by the RPCs, since it was in an email sent from the attorney to the client.
Although attorneys and other businesses have traditionally favored signed paper contracts for these types of fee agreements, technology appears to be carrying more weight these days. Even though it was not mentioned in the Court’s opinion, the Court may have also found it important that there was no question that the client actually read and received the emailed fee arrangement since he paid the $32,000 in response to that email. Additionally, this client was likely quite knowledgeable in business matters since his attorney was defending him regarding a $1.5 million loan he received from his employer, a major bank.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green, P.C. Counsel on Business Litigation Issues
Call the Philadelphia business lawyers at Sidkoff, Pinus & Green, P.C. today at 215-574-0600, or contact us online, to see how we can protect your rights in when entering into or disputing business agreements.