The law in Canada on internet contracts: Part 2

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By Richard Stobbe

Go-karting in Saskatchewan as an internet law case?  Yes, and you’ll see why. In Quilichini v Wilson’s Greenhouse, 2017 SKQB 10 (CanLII), a go-kart participant is injured and sues the service provider. The service provider holds up the waiver as a complete defence, saying it contains a release of all claims.

In this case, the waiver is  provided to all participants through a kiosk system, where an electronic waiver is presented in a series of electronic pages on a computer screen. Participants have to click “next” to move from one page to the next; and finally click the “I agree” button on the electronic waiver before they can participate in the activity.

Variations of this happen everyday across Canada when users click “I agree”, “I accept” or some variation of a click, tap or swipe to indicate assent to a set of terms.

  • Can legally binding contracts be formed in this way?
  • And another question, even if it works for common-place transactions like a shopping-cart check-out, does it work for something as important as a release and waiver of the right to sue for personal injury?

The answer is a clear yes, according to the facts of this case. The judge in Quilichini had no trouble finding that the participant’s electronic agreement was just as effective as a signed hard-copy of the agreement. The participant had a full opportunity to read the waiver, and there was nothing obscure in the presentation of the waiver, or the choice whether or not to accept it. The court concluded: “there can be no question but that when the plaintiff clicked ‘I agree’, he was intending to accept and assume responsibility for any possible risk involved and knew he was agreeing to discharge or release the defendants from all claims or liabilities arising, in any way, from his participation.”

This conclusion is based in part on Canadian provincial laws such as Alberta’s Electronic Transactions Act, SA 2001, c E-5.5, (there’s an equivalent in Saskatchewan and other provinces), which generally indicate that if there is a legal requirement that a record be signed, that requirement is satisfied by an electronic signature. There are exceptions of course, such as wills or transfers of land.

In the Quilichini  decision, the court didn’t look outside the Saskatchewan Electronic Information and Documents Act, 2000. But there are other authorities to support the proposition that binding contracts can be formed online in a number of ways. Decisions such as Kanitz v. Rogers Cable Inc., 2002 CanLII 49415 (ON SC), even deal with passive assent, where a user is deemed to be bound by something even absent a formal “click-through” button. Kanitz dealt with the question of whether internet service subscribers were bound by a subscription agreement, where that agreement was amended, then merely posted to the service provider’s site, rather than requiring a new signature or a fresh “click-through”. The subscribers were bound by the terms merely by continuing to use the service after the amended terms were posted.

In considering this, the Court in Kanitz said: “…we are dealing in this case with a different mode of doing business than has heretofore been generally considered by the courts. [remember… this was 2002] We are here dealing with people who wish to avail themselves of an electronic environment and the electronic services that are available through it. It does not seem unreasonable for persons who are seeking electronic access to all manner of goods, services and products, along with information, communication, entertainment and other resources, to have the legal attributes of their relationship with the very entity that is providing such electronic access, defined and communicated to them through that electronic format. I conclude, therefore, that there was adequate notice given to customers of the changes to the user agreement which then bound the plaintiffs when they continued to use the defendant’s service.” [Emphasis added]

This is not to say that ALL electronic contracts are always enforceable, or that all amendments will be enforceable even without a proper mechanism to collect the consent of users. However, it does provide a measure of confidence for Canadian internet business, that the underlying legal foundation will support the enforceability of contractual relationships when business is conducted online.

Want to review your own internet agreements and electronic contracting workflows to ensure they are binding and enforceable? Contact Richard Stobbe.

 

Calgary – 07:00 MST

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