Can emails constitute a binding agreement of purchase and sale?

November 25th, 2011 by Meliha Waddell

In the recent New Brunswick decision of Girouard vs. Druet, [2011] N.B.J. No. 260, the Court held that an email exchange constituted a binding written agreement of purchase and sale. Girouard was interest in a particular condo building in downtown Moncton. After responding to a Kijiji ad regarding the rental of a unit in the building, Girouard discussed the possibility of buying the condo from Druet over the telephone. The parties agreed to carry on their discussion through email.

On October 24, 2011, Druet sends the following email to Girouard: “After giving the idea of selling my condo some more thought I have come to a decision. I would sell it to your for $160,000 conditional that you take over the current mortgage and pay the legal fees associated with the purchase. (I estimate about $800).”

That same afternoon, Girouard replies: “Thank you Kelty, I will meet you half way @ 155000.00 and pay legal fees and assume existing mortgage.”

On October 25, 2011, Druet writes: “Sorry for the late reply – I’ve been thinking about it. I will accept your offer. How would you like this to go?”
Girouard responds to Druet by advising that he can have a sales and purchase agreement drafted for Druet’s review. Girouard also asks Druet whether a November 15 closing date is acceptable and asks if the mortgage holder is a Moncton or Halifax bank.

Three hours later, Druet responds, “My partner has been in Peru the last few days and I just got to speak with him tonight about the condo. He was not agreeing with the price so I am sorry but I cannot sell to you.”

In Girouard’s last email, he maintains the position that the parties have a valid contract for the sale of the condo and intends to hold Druet to same.
It is not contested that Druet was the sole owner of the condo. Nor is it contested that the parties wrote the emails as produced. No closing date was agreed upon. No cash deposit was suggested or paid. I don’t even think that Girouard went to see the condo in question. Nonetheless, the Judge found a basis for binding written agreement of purchase and sale in the email exchange between the parties.

The Judge rejected Druet’s argument that Girouard’s email advising that he would provide a purchase and sale agreement suggests that the earlier emails were merely a contract to contract.

In his analysis, the Judge decided that the emails would constitute a binding purchase and sale agreement of the condo had the emails been written and physically signed. All of the following essential terms of a contract for the sale of land were found: an offer, an acceptance, the parties, the property, and the purchase price. The Judge noted that internet and emails have become a way of life for both business and individuals.

Leave to appeal has recently been allowed. We await the final determination of this decision.
It is not clear as to whether this case would have been decided differently in Ontario. Only time will tell!


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