BEWARE – Exchange Of E-Mails May Constitute A Binding Contract

In a decision released in late 2006, the Honourable Mr. Justice Perell explained that an exchange of e-mails between two parties may constitute a binding contract depending on the specificity of the dialogue within the e-mails. Therefore, when parties enter into negotiations via e-mail, they must clearly indicate whether their intentions are to finalize a contract or agreement within the exchange of e-mails or if the e-mails are simply a tool to allow the parties to prepare an agreement to be completed at a future date.

In this particular case, two corporations (hereinafter "R-London" and "R-Toronto") entered into a partnership, merged their businesses and began to operate under the common name "Rehability." After a few years, R-London and R-Toronto decided that they wanted to expand the business in different directions. They split Rehability into two separate corporations in the same manner as prior to