The Quebec Superior Court recently ruled on the level of evidence required to prove the existence of an electronic contract.

Facts

The plaintiff, Aymane Tabet, worked as a stock broker for Golden Market Management, whose office neighbour was the defendant, Equityfeed Corporation. Tabet alleged that he concluded an agreement with Equityfeed whereby he would build software in exchange for significant revenues, and claimed damages exceeding C$700,000, including punitive damages, from Equityfeed and its chief executive officer, Stephan Touizer.

Equityfeed had been mandated by Golden Market Management to create a software, NewsTrader, for use by Golden Market Management. The software was created in April 2010 and the plaintiff was one of its users.

The plaintiff claimed that, approximately three months later, Touizer had apparently recognised his contribution in NewsTrader and proposed a collaboration agreement whereby the plaintiff would develop software titled ‘Newsfeed’. To access the contract, the plaintiff alleged that he had had to enter an Equityfeed website with a username and password and provide his consent by clicking on an ‘I accept’ button. The plaintiff claimed that he had signed the contract, saved a copy on his laptop (which had since been destroyed) and printed a paper copy. A few months later, the plaintiff claimed that Equityfeed had offered Newsfeed on its website without his authorisation and without exchange of royalties.

The defendants denied having concluded any agreement with the plaintiff and held that:

  • the agreement had been a product of the plaintiff’s imagination;
  • no contract had been signed; and
  • Newsfeed had never existed.

Quebec Superior Court decision

The court noted that the plaintiff’s allegations had evolved over the course of the case. For instance, in his initial demand letter, he had asserted his copyright in Newsfeed but made no mention of the agreement at issue. Later, he had admitted that his contribution was limited to ideas and concept and recognised his action relied solely on the agreement.

Further, in his proceedings, he had affirmed that Newsfeed was completed after signing the agreement. However, following evidence by the defendants that the software was completed well before (it was admitted that NewsTrader and Newsfeed were one and the same), he had modified his version of the facts at trial and affirmed that the objective of the agreement was to improve the existing software. His versions were not corroborated by further evidence.

Lack of integrity

The court also commented on the weakness and lack of credibility of the plaintiff’s evidence – for example, that his laptop had been destroyed and that he had no knowledge of the URL address that would have permitted a retracing of the agreement, making it impossible for him to prove where the document had originated and that the agreement’s integrity was maintained. Further, the copy of the alleged agreement included a footnote with an incomplete URL address which indicated that the agreement had been created using a different programming language to the one normally used for Equityfeed’s electronic agreements. Ironically, the agreement resembled one from Golden Market Management evidenced by the plaintiff, except that it was not shown as a continued print of a website (as was the Golden Market Management contract). The court noted that the plaintiff had provided:

  • no pertinent email exchange with the defendants;
  • no complete URL address for accessing the agreement;
  • no laptop that was apparently destroyed; and
  • no evidence of commercialisation of the software.

With respect to the signing of the agreement, the names of the parties were typed. However, the court held that simply typing in a name on an agreement does not correspond to the definition of an ‘electronic signature’ ? while the names identified the parties, they were insufficient to demonstrate evidence of the willingness of the parties to adhere to the content of the agreement.

Based on the above, the court held the only reasonable conclusion to be that:

  • the agreement had been fabricated by the plaintiff;
  • no credible evidence existed which proved that Newsfeed had ever been commercialised; and
  • the amount of damages claimed was arbitrary, hypothetical and unsupported by evidence.

The court dismissed the plaintiff’s lawsuit.

The court also found that the plaintiff’s action amounted to bad faith and an abuse of procedure as he had attempted to assert an agreement which was not corroborated by any credible evidence; rather, this appeared to be an attempt to extort money from the defendants to avoid trial. Such an attitude was costly to the plaintiff as the court ordered him to pay over C$28,000 in extrajudicial fees.

This article first appeared in IAM. For further information please visit www.IAM-media.com.