New Brunswick Court: E-mail Exchange Can Create a Binding Contract

In Druet v Girouard, 2012 NBCA 40, the New Brunswick Court of Appeal (Court) has ruled that, in principle, an exchange of e-mails can result in a binding contract for the sale of land. The Court relied on the “joinder” principle, deciding that although the e-mails do not make specific reference to one another, the reference arises as a matter of fair and reasonable inference, and therefore the e-mails can be considered one contract. However, after considering the content of the specific e-mails at issue in this case, the Court ruled that the parties did not intend to be contractually bound. In reaching its decision, the Court set aside the motion judge’s finding that a binding contract had been created because the e-mails contained the essential terms of the sale. Instead, the Court decided that the e-mail exchanges were negotiations rather than a contract, as the emails referred to a formal contract being prepared, and therefore the parties did not intend to be contractually bound until a formal contract was prepared and signed. Of significance, the Court was of the view that the law should presume against any intent to create a binding contract when e-mails are rapidly exchanged back and forth. Also considered was whether the signature requirements of the Statute of Frauds and the Electronic Transactions Act were met in the e-mail exchange. The defendant argued that her name at the end of her e-mails did not constitute her signature. The Court discussed various factors that would influence whether the signature requirement has been met, but decided not to rule on the issue since it had already decided that there was no contract based on a lack of intent to form a binding agreement. Summary by: Adam Lis