Mortgage Broker

CMB MAGAZINE cmba-achc.ca winter 2016 | 15 the terms describing the sponsorship benefits during the next five-year term and the price. When the Canucks confirmed and accepted Canon's July 11 offer on those terms (with the corrected price), there was a meeting of the minds. ere was no critical or "essential" part of the agreement missing; the parties had agreed upon the parties, price, and the sponsorship inventory to be included. While the agreements started off as being tied together, it was clear that both parties were prepared to move ahead with the sponsorship agreement to meet time pressures put on by the upcoming hockey season. INTENTION TO BE BOUND – e Court said that the parties intended to be bound to the agreement reached. e test for this is whether a reasonable person, when put in the place of each of the parties, would conclude that the other party intended to be bound to the agreement. e conduct of both Canon and the Canucks was consistent with their intention to be bound by the agreement. e details of what was included in the sponsorship had been provided by the Canucks to Canon in a September 23 email. Canon did not take issue with the email or with the full implementation of the signage in October. Both parties were about to spend significant sums of money on the two linked contracts. It could not reasonably be thought that these expenditures would have been incurred if the matter were to remain at the negotiation stage. It was not until December 2 that Canon sent back requested changes to the formal documents. e reason was a change of mind by Canon rather than the introduction of a new term by the Canucks. Canon executives were internally emailing that they had a "done deal" and could not go back on pricing. Canon was willing to execute the lease agreement on September 25, 2008. Superiors at Canon were being advised at the end of September by staff handling the negotiations that a contract had been concluded. Canon indicated their intent to be bound to the agreement by "rapid and complete implementation of the sponsorship benefits", including advertising on the rink boards, score clock halo, power rink and the player tunnel. Canon advertising was included in the Game Notes and magazine. Canon personnel utilized the included season tickets. Clearly, both parties intended to be bound. SUBJECT TO FURTHER AGREEMENT – e Court said that the parties intended the agreement reached to be put into the form of a formal agreement for signing, but doing so was not a condition to the agreement being enforceable. Even when the essential terms are agreed upon and the parties clearly intend to be bound by that agreement, the question remains whether that agreement is subject to a later agreement being reached. In other words, is the email agreement reached just an unenforceable agreement to agree at a later date? is is a matter of interpreting the email exchange. Where it is contemplated that there will be a later formal agreement, is the agreement in the emails: n enforceable because the later agreement is only a recording of the already reached agreement; or n unenforceable unless a later formal agreement is reached. In this case, while the emails did say that the emails would be formalized in a "long- form" agreement and both parties knew their legal departments would prepare and review a formal agreement for signatures by their superiors, the emails did not provide that such review was a condition for the agreement reached in the emails to be enforceable. e formal document was simply formalizing their already-reached agreement. ere is no requirement in law that only formal documents are enforceable. e Court found the sponsorship agreement reached in the emails to be enforceable and proceeded to award damages in favour of the Canucks. THE TAKEAWAYS – Informal emails can amount to a binding agreement. To minimize uncertainty, consider the following: n ere does not need to be agreement on all terms to constitute an agreement, just on essential terms. If you consider a term to be essential, say so in your email(s). n Don't make use of the benefits you get or perform the obligations you undertake until the agreement is finalized in formal and signed form. n If you intend the emails to be negotiations and subject to the signing of a formal agreement, in each email state that there is no agreement whatsoever until a formal agreement has been approved by client/ superiors/legal counsel, signed and delivered to each party. n If you have an existing relationship with the other party, clearly state in your email(s) that this is a fresh negotiation and not just a carryover with a change of dates and price; unless you intend otherwise, in which case you should clearly state that other intention. n Ensure your conduct is consistent with the statements you make in your email. For example, do not make the agreement conditional upon approval by your lawyer and then act like you have a done deal. n You need to be formal in negotiating. Sloppy and informal exchanges can produce surprising legal obligations. bindingcommunication

• Cover