Can an exchange of email form a contract? To create an enforceable contract, the parties have to intend to be bound by their agreement at the moment the contract is formed. This can happen in different ways, including via email.  In the recent decision in  Basis Technology Corporation v. Amazon.com, Inc. 71 Mass. App. Ct. 29, the court ruled that email communications between the parties’ lawyers constituted a sufficiently complete and unambiguous agreement, and that both parties intended to be bound by that communication of terms.

The court will not look at whether the parties think they have agreed, but what an “objective reasonable bystander would conclude based on all of the material facts.”  If that objective analysis shows that the parties intended to form a contract and the essential terms of that contract can be determined with a reasonable degree of certainty, then the contract will be enforceable.

In Leoppky v. Meston, 2008 ABQB 45 (CanLII), a recent Alberta case, the court concluded that there was an agreement between the parties, formed by a string of emails.

In another interesting twist to this concept, many companies (including internet service providers) reserve the right to amend their “terms of service” by sending the amended terms to customers via email. Last month, AT&T in the U.S. sent out an email notice to its customers, advising of amendments to the standard terms of service.  However, for some customers, AT&T’s own filter identified the email as spam and diverted it into the junk folder.  Depending on the terms, the company might have trouble enforceing the change if challenged in court.

Related Reading: E-Commerce Update

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