Email has been with us for about 20 years and in general has taken over as the primary means of written communication. It would be logical to assume that legal notices can be sent by email. However following a recent decision of the Ontario Court of Appeal (High Tower Homes v. Stevens), I would caution that sending an email is not necessarily a valid means of providing a legally binding notice.

The case in question dealt with a condition in an agreement of purchase and sale. There were complicated facts, however the point of the lawsuit was that the buyer’s lawyer had waived the buyer’s right to terminate the agreement by sending a notice to the seller’s lawyer by fax. The seller denied that the notice was properly served because the agreement of purchase and sale did not specify the fax number for delivery of documents and absent that number, the agreement provided that service was to be made to the seller in person.  Without that waiver of the buyer’s condition, the agreement was automatically at end.

There was no doubt that the notice was indeed received by the seller’s lawyer by fax but the seller insisted that because the letter of the agreement was not complied with that the agreement was terminated by default. The purchaser argued that the delivery of correspondence and even the signed agreement had been sent by fax or by email without prior complaint.  Therefore could it not be assumed that the parties had acknowledged that electronic communication was OK? Would the Court look at the big picture and validate the notice or insist on technical compliance?

The Court of Appeal agreed with the Seller that the notice was invalid because it did not comply with the strict terms of the agreement. The agreement was terminated even though the parties knew that was not the intent of the buyer. Reading between the lines, you could sense that the Court had no sympathy for the buyer because of his past behaviour in the deal, but the decision stands for all cases.

Therefore instead of relying upon the commonly held belief that in the 21st century email and fax should be the equivalent of snail mail, you have to look carefully at the method of service set out in the agreement and who is to be notified and by what means.  This principle would apply to any type of notice required under a contract or agreement that has a legal effect, such as exercising an option to renew, a right of first refusal, termination, waiver of conditions, etc.  Of course parties can stipulate alternate methods of communication in the agreement or waive strict performance with the terms of agreement. So if your friendly landlord says to send an email to exercise your option, that can be relied upon but that waiver should be in writing. I would caution against relying upon informal conversations or past patterns of behaviour unless you have some hard proof that the other party has waived the strict wording in a signed agreement or contract.

There is still the need to keep paper, pen and stamps handy.

For further information, please contact Shanae Soor by phone at (416) 238-7402 or by email at ssoor@businesslawyers.com.

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