Beware the accidental agreement

If you enter into email negotiations in respect of a proposal documents (such as a heads of agreement, term sheet, memorandum of understanding or letter of intent) and indicate that it is “subject to contract”, you haven't entered into a binding contract, have you?

Case law illustrates that no document needs to be signed for the prospective parties to have formed a binding contract. Email exchanges often result in the parties reaching agreement in a casual or informal way about essential contractual terms. Depending on the wording in the correspondence and any related discussions or actions, if the essential terms have been agreed between the parties, a binding agreement may be formed.