When Does An Email Settlement Become A Binding Contract? Lessons From JH Drilling In Alberta

Throughout the litigation process, parties and their legal counsel may engage in settlement discussions through email correspondence, where the terms of a settlement agreement are negotiated and agreed upon. As demonstrated in JH Drilling Inc v Barsi Enterprises Ltd,¹ courts recognize that a settlement reached through email correspondence may constitute a contract binding upon the parties. As a binding contract, the parties’ settlement agreement may preclude further litigation.

Commercial parties should be aware of the potential consequences to entering into settlement discussions via email correspondence and the legal principles applied by courts when determining if such discussions bind a party to the terms contained therein. A plaintiff resiling from the terms of a binding settlement agreement may have its claim summarily dismissed.