Email and social media all have consequences if not used properly, and generally, the individual who uses this type of communication understands that electronically communicated words may make the writer bound by what has been transmitted.
Under section 3(1) of the Electronic Transactions (Victoria) Act 2000, electronic communications means:
(a) a communication of information in the form of data, text or images by means of guided or unguided electromagnetic energy, or both or
(b) a communication of information in the form of sound by means of guided or unguided electromagnetic energy, or both, where the sound is processed at is destination by an automated voice recognition system.
Where email has been used to accept an offer and a new email used to retract the acceptance of that offer, there are a number of possible outcomes, subject to the receipt rule, postal acceptance rule, or statutory rules.
Under the receipt rule, when an acceptance of an offer has been issued by email, followed by transmission of a withdrawal email, and the acceptance email has not been read first, meaning the retraction email of the acceptance was read first in time, no contract would be formed. However, if the acceptance email was read first, a binding contract would be formed, and it would be at the liberty of the offering party whether to accept the withdrawal email or not. If a dispute arose in this circumstance on whether there was a binding offer, the issue to determine is what email was read first, the acceptance or withdrawal email. This may be resolved through the forensic assessment of the electronic time stamps as to when the email was opened to be read.
If the postal acceptance rule is applied, which refers to postal communication, and a withdrawal of acceptance was issued by postage and email, technically, a withdrawal by email will not be effective on the strict application of the rule where the offer has been accepted. However, it should be kept in mind that the postal rule may be displaced either expressly by the offeror, or by inference from the circumstances of the negotiation.
Under the Electronic Transactions (Victoria) Act 2000 section 13A says:
Time of receipt is recorded:
(1) For the purposes of a law of this jurisdiction, unless otherwise agreed between the originator and the addressee of an electronic communication: (a) the time of receipt of the electronic communication is the time when the electronic communication becomes capable of being retrieved by the addressee at an electronic address designated by the addressee; or
(b) the time of receipt of the electronic communication at another electronic address of the addressee is the time when both:
(i) the electronic communication has become capable of being retrieved by the addressee at that address; and
(ii) the addressee has become aware that the electronic communication has been sent to that address.
(2) For the purposes of subsection (1), unless otherwise agreed between the originator and the addressee of the electronic communication, it is to be assumed that the electronic communication is capable of being retrieved by the addressee when it reaches the addressee's electronic address.
(3) Subsection (1) applies even though the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is taken to have been received under section 13B.
Where an electronic automated receipt is issued by the offeror, which acknowledges the email of acceptance, then under section 14C of the Act, that electronic acknowledgement will result in a contract being formed, unless there is an express provision detailed in the offer that was submitted which stated the contrary.
Where an email acceptance has been accepted by email automation, and there was an error, section 14D of the Act may assist to rectify the situation. However, section 14D(3) needs to be taken into account, which says: “The right of withdrawal of a portion of an electronic communication under this section is not of itself a right to rescind or otherwise terminate a contract.”
Withdrawing of an acceptance by email, where are contract has been formed, may result in a breach of contract subject to the expressed conditions of the terms of the offer, with the possibility of a financial loss.
Email and social media are the dominant form of communications between parties, and the days of the printed hardcopy contract are disappearing, and legislation is supporting the same. Appreciating the importance of electronic communications and the risks that are present, will enable a party to mitigate the risk and avoid forming a contract when one was not actually intended. The prudent practice is to review the terms of any offer carefully, and the form of communications required by that offer to communicate with the offeror, which is a term generally called ‘notices’. Then when there is uncertainty, get that legal advice to protect your legal rights and interests.
The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799 www.legalau.com
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