Electronic contracts and signatures
Electronic contract availability
Are electronic contracts legally valid in your jurisdiction? If so, what rules and restrictions govern their formation (including any mandatory or prohibited provisions and contract formats)?
Canadian e-commerce legislation supplements traditional contract law to enable the enforceability of electronic contracts in Canada. Because the law of contract is a provincial responsibility in Canada, the key legislation in this area is provincial. In all provinces except Quebec, the e-commerce statute is based on the principles enunciated in the UN Model Law on Electronic Commerce, adopted in 1996 (Quebec’s e-commerce law implements many of the same principles but does not follow the UN Model Law directly). Canada takes a functional equivalency approach to e-commerce, so electronic contracts are legally valid where there is offer and acceptance. Both web-wrap and click-wrap agreements have been recognised by the Canadian courts, but only where the offer and acceptance requirements are met. For example, in Rudder v Microsoft (1999, 2 CPR (4th) 474), the court held that clicking on an ‘I agree’ icon served as valid acceptance of an offer. But in Aspencer1.com Inc v Paysystems Corporation (JQ no 1573, JE 2005-601), a Quebec judge held that an organisation could not modify the terms of a contract by posting them on its website, on the grounds that there was no proof of real acceptance by the user.
Are there any limitations or restrictions on transactions that can be concluded through electronic contracts?
No limitations or restrictions specifically apply to commercial electronic transactions in Canada.
Do any data retention requirements apply to electronic contracts?
There are no data retention requirements specific to electronic contracts in Canada. Instead, electronic contracts are viewed as functionally equivalent to paper contracts and are therefore subject to the same data retention requirements as those contracts done in writing. For example, the Canada Revenue Agency requires all tax documents to be retained for at least six years. Provincial electronic transaction legislation provides that electronic records are equivalent to paper originals where the electronic documents have integrity (ie, are complete and unaltered) and where they are retainable.
Are any special remedies available for the breach of electronic contracts?
Provincial consumer protection legislation specifically addresses internet agreements and allows customers to cancel agreements if certain criteria are not met. Some examples of where an internet agreement may be cancelled by the consumer under provincial legislation include:
- where certain information is not disclosed;
- where the consumer was not given a meaningful opportunity to accept, decline or correct errors in the agreement prior to acceptance;
- where the consumer has not accessed the relevant information; and
- where the consumer is unable to retain or print the information.
Are electronic signatures legally valid in your jurisdiction? If so, what rules and restrictions govern their use?
Electronic signatures are legally valid in Canada. Provincial e-commerce acts provide that the legal requirement of a signature is satisfied by a signature produced electronically. However, exceptions apply in a variety of cases, including wills, powers of attorney, negotiable instruments, affidavits, certain business incorporation and corporate finance documents, and documents in which IP rights are granted.
Best practices relating to e-signatures in Canada include:
- giving proper notice that e-signatures will be used;
- ensuring that the method of collecting the e-signatures complies with privacy requirements; and
- maintaining accurate records on the consent to use, accept and the delivery of e-signatures.
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