When a counter offer is accepted by a purchaser and he signs acceptance when is the deal actually concluded:
1. As soon as acceptance is signed,
2. When offer is faxed back to listing agent, or
3. When listing agent actually gets it in his hand from fax machine.
There are two steps to acceptance:
- communicating acceptance.
Without both steps, you do not have acceptance. And, as pointed out above, that means the communication must take place within the time limited for acceptance.
The “loose cannon” here, is that there are often no particular rules which deal with or govern the method of communication. That applies to all contracts.
If you look at the OREA standard form, two methods are considered: the email from the time it’s sent, and the fax from the time it’s sent.
A fax will work. An email for offers or counter offers will not. It’s contrary to the Electronic Commerce Act, but that should change within a few months.
So, essentially that leaves us with some choices for step 2, the communication part:
- personal delivery, and
Again, all of these issues arise in respect to regular contracts. For real estate transactions, the Electronic Commerce Act applies in such a way as to interfere somewhat. It has not been resolved by the Courts as to whether step 2 in the acceptance process could be by way of email. I would actually think that it could, because a verbal communication in similar circumstances has been viewed as an appropriate means of communication. Fax communication is specifically authorized. Personal delivery of the document is clearly the best, and mail is just too lengthy a time period in most cases, but, it’s acceptable, should that method be selected. However, if that is the agreed method of communication, then it is appropriate and case law confirms that receipt is deemed to take place when the letter is delivered to the postal service. Actual delivery to the recipient may not take place for several days.
Many contractual agreements will envisage the delay by mail delivery and extend the time for “deemed delivery”, from deposit with the postal service to 3 or 4 days thereafter.
The critical issue is verbal communication! If that is acceptable, then why not email? But, who wants to be the first try this out and challenge the issue? Better to be safe than sorry!
The argument under the Electronic Commerce Act would be:
1) the actual physical signing complies with the “in writing” part, and
2) email is as good as a verbal communication.
In fact, you could “pre-agree” to a “voice message”. Effectively, that procedure already takes a “one-way” communication into consideration. The result being that an email communication would be reasonable.
So, the present circumstances leave us in a bit of a quandary: can you, successfully and legally communicate the acceptance, just by email? The Electronic Commerce Act, if strictly construed by the Courts, would say “no”, but it’s still reasonable, and entirely possible (but not quite probable) that the Courts would say “yes”.
That means, if it’s your money, you can take a chance, if it’s your clients’ money, say no to the temptation, and go the risk-free route.
Brian Madigan LL.B., Broker