Contract Formed in Ontario Where Email Communicating Acceptance Received in Ontario

In TFS RT Inc v Kenneth Dyck, 2017 ONSC 2780 (TFS), the Ontario Superior Court confirmed that a contract is presumptively formed in Ontario where a party receives an email in Ontario communicating the acceptance of the offer. In TFS, the defendants attempted to stay an action brought against them regarding payment of written guarantees on the grounds that Ontario lacked jurisdiction and, in the alternative, that Ontario was not the proper forum.

Many factors connected the written guarantee to the defendants’ jurisdiction, Alberta, despite the fact that a forum selection clause stated that Ontario law applied. For instance, the dealings between the plaintiffs and the guarantee company took place in Alberta, the defendants are residents of Alberta, the loan documents covered by the guarantee were signed in Alberta (and not by the Ontario plaintiffs), and the funds were deposited into Alberta bank accounts.

However, the defendants sent signed copies of the loan and guarantees via email, and this email was received by the plaintiff and its underwriter in Ontario. Citing the Ontario Court of Appeal in Eastern Power Ltd v Azienda Communale Energia and Ambiente ([1999] OJ No 3275) and itself in Inukshuk Wireless Partnership v NextWave Holdco LLC, (2013 ONSC 5631), the Court held that the general rule of contract law is that a contract is made in the jurisdiction where the offeror receives notification of the offeree’s acceptance, and that this principle applies when acceptance is delivered by email. The Court held that the defendants had failed to rebut this presumption.

The Court also rejected the defendants’ alternative grounds based on forum non conveniens. The defendants failed to provide sufficiently strong reasons which showed that it would not be reasonable or just in the circumstances to require adherence to the forum selection clause contained in the guarantees. The Court enforced the forum selection clause even though it had not been brought to the defendants’ attention, as the defendants had an opportunity to seek legal advice prior to signing, and were sophisticated business people rather than consumers.