Notice provision

In a business sale, an agreement may make some rights depend on one side sending a notice, such as a claim under an indemnity, a notice of default on a seller note, or a request to extend a deadline. The notice provision sets the mechanics. Its words are read like any other contract words. In Sattva Capital Corp. v. Creston Moly Corp., the Supreme Court of Canada said a decision-maker reads the contract as a whole, giving the words their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at formation. See claims against the seller after closing.

Email and timing

Where notice goes by email, Ontario’s and British Columbia’s electronic-commerce statutes supply default rules. Section 22 of Ontario’s Electronic Commerce Act, 2000 says electronic information is sent when it enters an information system outside the sender’s control or, if sender and addressee use the same system, when it becomes capable of being retrieved and processed by the addressee, and that rule applies unless the parties agree otherwise. Section 18 of British Columbia’s Electronic Transactions Act opens in the same way, with “Unless the originator and addressee agree otherwise”. Both Acts have exceptions of their own. This entry covers Ontario and British Columbia; check the rules where you are.

What to check

• Who may give and receive notice, and at which address or email
• Whether email is allowed or a courier or registered mail is required
• When a notice is treated as received
• Whether copies must go to each side’s lawyer