Over the course of three days last October, Marc Girouard and Kelty Druet corresponded by email about the sale of Druet’s condo in downtown Moncton, N.B
After a series of emails and an offer and counter offer, Druet agreed to sell unit 203 at 850 Main St. for $155,000, or so Girouard thought. But Druet changed her mind and the case landed up in court.
There a judge decided that even though a formal agreement of purchase and sale was not ever signed, a deal was a deal. Since Ontario has similar laws to those relied on in New Brunswick, the same result could happen in Ontario.
Here is what happened:
October 22, 2010: Girouard was looking on Kijiji for a condo to rent and found the unit listed there. He spoke to the tenant who passed him on to Druet. They spoke and discussed the possibility of him buying the condo and agreed to carry on their discussions through email.
October 24, 10:56 a.m. Druet sends Girouard this email: “After giving the idea of selling my condo some more thought, I have come to a decision. I would sell it to you for $160,000, conditional that you take over the mortgage and pay the legal fees associated with the purchase. (I estimate at $800.) Please let me know your decision.
October 24, 12:16 p.m. Girouard replies: “Thank you Kelty. I will meet you half way @155,000.00 and pay legal fees and assume existing mortgage.”
October 25, 2:57 p.m. Druet: “Sorry for the late reply — I’ve been thinking about it. I will accept your offer. How would you like this to go?”
October 25, at 3:33 p.m. Girouard: “Great, are you in Moncton any time soon? I can have a sales and purchase agreement drafted for your review. Is a November 15 closing acceptable so not interfere with your tenants, that I am told are vacating on that date? Is the mortgage holder a Moncton or Halifax bank?”
October 25, 6:37 p.m. Druet: My partner has been in Peru the last few days and I just got to speak with him. He was not agreeing with the price so I am sorry but I cannot sell to you.
Girouard replied he had a deal and would not release Druet from the contract. The case went to court in Moncton and the decision was given on August 9, 2011.
The judge decided that if these emails were actually written and signed, they would constitute a binding agreement. He noted that the Internet and emails have become a way of life for business and individuals. Even though such things as the closing date had not been settled, he still found that there was a basis for a legally binding agreement.
In Ontario, the Electronic Commerce Act, which governs the electronic signing of documents, is confusing when it comes to the legality of signing agreements for the sale of land, so it is possible that in Ontario the result of this case may have been different. I am not so sure.
The lesson here is clear. Be very careful what you write in an email regarding any sale or purchase of a home. Also, if you are sending any notice in a real estate deal via email, always ask for confirmation of receipt from the other side. You may not find out that the email has hit someone’s spam file until you have missed an important time deadline.
Remember to always have the advice of an experienced real estate agent or lawyer before doing anything by yourself. In this case, the seller did not want to sell their condo but had to do so, based on this very simple exchange of emails. Do not let this happen to you.
Mark Weisleder is a lawyer, author and speaker to the real estate industry. Contact Mark at firstname.lastname@example.org