Canadian Business Law: An Analysis of E-Contracts Legality

This essay provides a comprehensive overview of e-contracts and their legal validity within the framework of Canadian Business Law. It begins by defining contracts in the digital age, highlighting the significance of e-commerce and the increasing use of e-contracts. The essay outlines the essential elements required for a valid contract, including agreement, completeness, deliberateness, and legal capacity, referencing the Uniform Electronic Commerce Act (UECA) which validates electronic contracts in Canada. The discussion extends to offer and acceptance in the electronic context, citing relevant case law such as Rudder v Microsoft and Christmas v Fort McKay. Furthermore, it addresses the legal standing of online contracts, the role of the Personal Information Protection and Electronic Documents Act (PIPEDA) in protecting user privacy, and the distinctions between click-wrap and browse-wrap agreements, referencing Canadian Real Estate Association v Sutton Real Estate Services Inc. The essay concludes that while e-contracts are generally legally binding, courts may intervene to protect customers in cases of ambiguity.

Canadian Business Law

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In today’s digital era, the definition of contract has changed with the introduction of
e-commerce websites. A contract is described as a legally binding agreement which is
formed between two or more parties. The contractual parties are bind by its terms which
means that they can hold each other liable if a party did not comply with his/her promise.
With the popularity of e-commerce market which includes buying and selling or products
online through computer networks, the use of e-contracts has increased substantially
among individuals and entities (Duplessis, O’Byrne, King, Adams & Enman, 2016). In order to
form a valid contract, certain element must be fulfilled. Firstly, parties must form an
agreement in which certain terms are mentioned, and the parties must have a ‘meeting of
mind’. The agreement must be complete and certain. Moreover, the contract must be
deliberate which means that both parties must want to form the contractual relationship.
The parties must voluntarily give their permission, and it should be free from coercion and
other serious unfairness. Lastly, the contracting parties must be competent to form a
contractual relationship which means they have the legal capacity. In Canada, Uniform
Electronic Commerce Act (UECA) provides that a contract is not considered as invalid solely
on the fact that it is formed electronically; thus, its nature is valid (ULCC, n.d.). The scope of
e-contract is similar to other contracts because same principles apply. The offer for the
contract can be made electronically, however, electronic advertisements are considered as
an invitation to treat rather than an offer. Moreover, websites which display goods or
services along with their price could be considered as an offer if the wording did not provide
otherwise.
As per UECA, the acceptance can be made electronically. In Rudder v Microsoft
(1999), 2 CPR (4th) 474 case, it was held that acceptance could be given by clicking on the

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icon or ‘I agree’ button (Hester, 2012). There are no provisions provided by UECA regarding
communication of acceptance through e-mail which is decided by the court based on facts
of the case to evaluate whether the acceptance is valid as given in Christmas v Fort McKay,
2014 ONSC 373 case. Normally, not all online contracts are signed by both parties, still, they
may be considered as legally binding. However, in certain situations, online contracts are
not legal such as contract for long-term lease, sale of land, co-signing of loan and others. In
e-contracts, the Personal Information Protection and Electronic Documents Act (PIPEDA)
protect the privacy of online users to ensure that these policies are not breached. In most
cases, electronic signatures are mandatory. There are two different types of electronic
agreements which include click-wrap and browse-wrap. In click-wrap agreements, the user
is instructed to review the terms prior to clicking ‘I agree’, and this form of contract is valid
in Canada as given in Rudder v Microsoft Corp case. In browse-wrap agreements, the
agreement is formed not because the party has clicked on ‘I agree’ button, instead, the
webpage take the user to another page in which the terms and conditions are mentioned.
This is a risky way of creating a contract, however, browse-wrap was considered as a form of
acceptance in Canadian Real Estate Association v Sutton Real Estate Services Inc., [2003] JQ
no 3606 (CS) case (Morgan, 2005). Thus, e-contracts are legally binding as other contracts;
however, in case of ambiguity, the court evaluates the facts to provide its judgement to
protect customers.

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References
Canadian Real Estate Association v Sutton Real Estate Services Inc., [2003] JQ no 3606 (CS)
Duplessis, D., O’Byrne, S., King, P., Adams, L. & Enman, S. (2016). Canadian Business and the
Law (pp. 125-126). Toronto: Nelson College Indigenous.
Hester, R. (2012). Whose Account Is It Anyway: Managing the Life and Death of Online User
Accounts. Est. Tr. & Pensions J., 32, 5.
Morgan, C. (2005). I Click, You Click, We all Click-But Do We Have a Contract? A Case
Comment on Aspencerl. com v. Paysystems. Canadian Journal of Law and
Technology, 4(2), 109-118.
Rudder v Microsoft (1999), 2 CPR (4th) 474
ULCC. (n.d.). Uniform Electronic Commerce Act. Retrieved from
http://www.ulcc.ca/en/1999-winnipeg-mb/359-civil-section-documents/1138-1999-
electronic-commerce-act-annotated