The contract (the “Agreement”) executed between Emergency Medicine and Rapier as executed on October 1, 1995, specifically provided that the contract will be automatically treated as renewed for subsequent one year periods unless either of the parties elected to terminate the agreement by giving notice of four months before the expiry of the initial one year period which in this case ended on the 31st September.
The contract has not provided for giving any further reason by either parties for the termination of agreement. The fact that Emergency Medicine chose to terminate the agreement at the end of the second year by way of notice sent on the 30th September, 2008 to the two addresses of Rapier, one of them being sent to the wrong address does appear to be a violation of the terms of the agreement and suggests that Emergency Medicine has acted incorrectly in insisting that it has complied with the terms of the contract. However, as observed by the trial court, the second letter was sent to JoeAnn Barato-Mills, the representative of MBS who had signed the agreement, and reached her in time as per terms and conditions of the agreement, and hence it was concluded that Emergency Medicine acted within the purview of the agreement in terminating the contract with Rapier.
The court also concluded that in view of the provision in the agreement the notice must be sent by registered or certified mail, and in view of the same being complied by Emergency Medicine before the expiry of the four months notice period, it may be concluded that Emergency Medicine acted in a way that the required four months notice of termination of contract was given to Rapier. The court observed that the mailbox rule was adequately triggered in the given case.
However the fact remains that Emergency Medicine had failed to comply with the basic provision of the agreement which required that the notice to Rapier must be sent to the address 7 Wells Avenue, Newton, Massachusetts, as given in the agreement. However the notice was inadvertently sent to Allan Carr-Locke of Rapier at 1238 Chestnut Street, Newton, Massachusetts, which was not the address as given in the agreement, which proves to be an action against what is provided in the agreement.
The second notice which was sent to JoeAnn Barato-Mills at a different address which was not mentioned in the agreement, on account of her being the MBS employee who signed the agreement, is not in keeping with what was provided for in the agreement. Conversely the fact that JoeAnn Barato-Mills had received the notice in time clearly indicates that Rapier was aware of the contract being cancelled by Emergency Medicine within the provided notice period. Despite this knowledge Rapier opted to bid for the renewal of the contract with Emergency Medicine along with other companies, which clearly indicates that it was in the knowledge of its contract being terminated. Hence there is no basis for Rapier to further challenge the court’s verdict.
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Theoretically, if Rapier opts to go for an appeal against the order of the trial court, it does stand a good chance to get reprieve in view of the fact that the termination notice was not sent by Emergency Medicine in compliance of the agreement executed between the two parties. The agreement clearly provided that the notice for termination of the contract must be sent at the specified address as given in the contract agreement and that it should reach the party before completion of the four months period prior to the end of the one year period during which the contract is in force, failing which it would be implied that the contract has been renewed.
However since Emergency Medicine has taken the plea that it had also sent the same notice to JoeAnn Barato-Mills, the employee of MBS who had signed the agreement, which was received by her within the time frame as provided in the agreement, it is implied that the compliance as laid down in the agreement was fully adhered to. The trial court in having given its verdict in favor of Emergency Medicine is theoretically correct in that the basic purpose of the information in regard to the termination of the contract having been conveyed to MBS within the time schedule as provided in the agreement was legally in order and that Emergency Medicine was within its rights to seek new bids from other parties for the required work.
The agreement had unquestionably provided for the issue of termination notice by certified mail which was fully complied by Emergency Medicine in triggering the mailbox rule as laid down in the law. The default rule of law that clearly provides for the notice to be effective only upon its receipt can be ignored if both parties mutually agree to over riding such rules, which was specifically done in the instant case.
Hence the action of Emergency Medicine in having sent the notice letter before the date of expiry which was 31st May 1998, fully justified its decision to cancel the contract for reasons that were not required to be cited in the notice letter as provided in the agreement. A major risk for Emergency Medicine in this regard appears to be the fact that it may reduce its credibility in the eyes of other companies who are bidding for offering the given services in view of the controversy created, which is not in keeping with good ethical practices of business.