Contracts By Email
A recent case has highlighted the potential problems when discussing offers by email. In the Supreme Court case of Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd  QSC 119 the buyer made an offer to purchase a petrol station. The offer included price and relevant dates. The offer was made subject to a contract being prepared and signed. It also included a request for a due diligence clause.
The Seller by return email accepted the offer but did not mention the due diligence clause. No contract was ever signed and the parties could not agree on a time period for the due diligence clause.
The court held that:
- Even though the offer was made subject to a contract being signed, there was a binding contract upon the exchange of emails.
- Even though no agreement was reached on the due diligence clause, this was held to be a condition subsequent to the contract. In other words there
was a valid contract but it was subject to the parties agreeing to a due diligence clause at a later date.
- Even though neither of the parties put their signature to a written document the Electronic Transaction Act held that the notation at the bottom of
the email was sufficient to comply with the Property Law Act.