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Doing Business Abroad: Carefully Consider the Method of Accepting an Offer

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Are you doing business in another province? Another country? If you are, have you ever given any thought as to where the contract you entered into was formed? In the other province/country? Why is this important anyway?

Well it's important if the parties have a falling out and one wants to sue the other for their damages. Where do you sue? In your province/country? Not so fast - you might find that the Ontario courts will not assume jurisdiction over your claim just because you do business in Ontario.

One of the factors that an Ontario court will look at in determining whether or not it will assume jurisdiction over a defendant that does not reside or carry on business in Ontario is where the contract was formed. In a couple of recent cases (Christmas v. Fort McKay First Nation, (2014) O.J. No. 390 (S.C.J.) and Inukshuk Wireless Partnership v. 425311 Canada Inc., ((2013) O. J. No. 4014 (S.C.J.)) the court has affirmed that the general rule is that a contract is made in the place that the offeror receives notice of the acceptance from the offeree. This rule applies to acceptances delivered by email and fax. Where acceptance is delivered by mail, the rule changes - a contract is made at the place where acceptance is mailed.

The moral of the story: before you send over your acceptance of an offer in this day and age of instantaneous communication stop and think about whether you should mail your acceptance instead of faxing or emailing it. Your decision could play an important role in determining whether or not the Ontario court will assume jurisdiction over your claim.

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Merovitz Potechin LLP
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Ottawa, ON K1Z 8R1

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