14 | winter 2016 cmba-achc.ca CMB MAGAZINE
bindingcommunication
MORTGAGE BROKERS NEED TO BE careful
in negotiating by email. e speed and ease
with which negotiations can progress by email
can cause you to become casual in what you
say and how you say it; yet fast, easy and casual
emails can amount to a binding agreement.
is is problematic when one of the
parties to the exchange thinks there is an
agreement and the other does not. Mortgage
brokers need to pay mind to this in all of their
communications, particularly where they may,
as agents, bind their clients.
An exchange of emails can amount to a
binding agreement if they together:
n
show agreement on all essential terms;
n
show the parties in the circumstances had
the intention to be bound; and
n
do not make the agreement subject to
subsequent review and approval.
e facts in Vancouver Canucks Limited
Partnership v. Canon Canada Inc., 2015 BCCA
144 (CanLII) demonstrate these points.
FACTS – e Canucks and Canon had been
in a contractual relationship for several years;
the Canucks leased office equipment from
Canon and the Canucks sold a sponsorship
package to Canon. e two agreements were
tied together.
e Canucks and Canon were negotiating
the renewal of these agreements by email. e
Canucks sent an offer of renewal on June 24,
2008; Canon sent a counter-offer on July 11;
and the Canucks accepted the counter-offer
on September 23 (with the typing error in the
price being corrected on the 24th).
Canon claimed the exchange amounted
to negotiations only and not to a binding
sponsorship contract; the Canucks and
the British Columbia Court of Appeal
disagreed with Canon. e Court concluded
the exchange of emails between the
Canucks and Canon created an enforceable
sponsorship agreement between the parties
as of September 24, 2008. It said that all
three requirements to constitute a binding
agreement were met and so there existed a
binding agreement which Canon breached.
It ordered Canon to pay the Canucks $763,888.
AGREEMENT ON THE ESSENTIAL
TERMS – e Court said that the parties had
agreed on the essential terms.
e essential terms are generally the 3 Ps
(parties, property and price), plus other terms
depending on the nature of the agreement.
Not all important terms are necessarily
essential terms for purposes of determining
whether there was an agreement. To minimize
difficulties concerning whether a term is
an essential one, be clear in stating in your
email(s) that it is to be included as such.
is particular case involved renewing
existing agreements from 2003. Canon had
indicated that "the same rights and benefits"
from the 2003 agreement would govern the
new agreement. Canon proposed to vary only
Emails
ENFORCEABLE
Could your informal online exchange be a court-enforceable contract? BY RAY BASI
There is no
requirement
in law that
only formal
documents are
enforceable.
