You may ask what Harry S. Truman has to do with e-mails. One of the most controversial , but funny events in the Truman presidency, demonstrates the risks of unreviewed e-mails sent on the spur of the moment. Truman's public gaffe came at the darkest days of the Korean war-- his approval ratings plummeting. Truman was an enthusiastic piano player, concert goer and devoted to his young daughter Margaret, who was a classically trained singer bent on an operatic career. She began a tour, starting with Washington's Constitutional Hall. She sang Mozart, Shubert and others and was applauded. The next day the Washington Post's music critic wrote a scathing review of Margaret's performance. Harry Truman reacted with a father's emotion writing to the critic that the critic was a "frustrated old man" (Truman was 68 and the critic 38) and hoped for a personal meeting at which the critic would "need a new nose, a lot of beefsteak for black eyes, and perhaps a supporter below". Harry sent the letter. Truman had a history of firing off intemperate letters to people who offended him but a system was in place in which such letters were intercepted by a long time friend. The aide had died just days before the famous "music critic" letter. The letter appeared on the front page of the Post. The event--which we might now consider understandable and funny, especially in the era of Obama and Bush, caused a big controversy. (The Truman letter events are set out in David McCullough's 1992 book on Truman.)
Truman's letter is similar to many e-mails that one sees produced in litigation; they are either the product of anger, stupidity or plain lack of forethought. Generally all of them suffer from the "Truman Effect"--they were not held and reviewed by the sender or someone else. In most cases if the writer had waited until morning to send the e-mail or had a colleague read the e-mail the e-mail would not be a problem. E-mails are worse than the Truman letter because they are impersonal, easy to compose and rarely read or re-read before sending--experts on e-discovery have observed that people say things in e-mails that they would never say in person,on the telephone or by letter.
Most seriously, in this era of troubled loans and troubled borrowers, a lender's careless e-mails can enable a clever borrower's attorney to claim that the bank has agreed to a renewal of a troubled loan or to terms that were discussed by e-mail but not agreed by the bank This is especially true in New Mexico where our courts virtually ignore our written commitment statute. There is no easy solution but banks should conduct occasional short training sessions on the dangers of e-mails and the minimum statements that must be included in every e-mail to protect the bank. The first topic in any session is "reread and revise". Just a short comment like, "your proposal sounds fair" should be followed by "but any final terms are subject to review by our loan committee"
Now for the promised form. I recommend that all e-mails authored by any lender or work out person contain the following statement which should be separated from the "confidentiality" statement that most bank's use in e-mails. It is important the following statement stand out as an important reminder to the customer.
"All discussions, proposals and terms for any loan, extension or renewal of credit are not binding on the Bank or any borrower unless the terms or proposals are approved by the Bank's senior management, loan committee or Board of Directors and contained in a written commitment or similar written agreement signed by the parties to be bound."This is not a panacea for stupid e-mails, but the inclusion of the statement or something like it will assist the bank in dealing with careless e-mails.
Marshall G. Martin
Comeau, Maldegen, Templeman & Indall, LLP
(505) 982 4611
(505) 228 8506
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