Vantage Systems Pty Ltd

Question: Discuss about the Vantage Systems Pty Ltd. Answer: Introduction: In the recent years the court have started showing the judicial trend of recognizing the fact that formation of contracts can take place through emails. In the case of Stellard Pty Ltd v North Queensland Fuel Pty Ltd (Stellard Pty Ltd v North Queensland Fuel Pty Ltd, [2015]) and Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd (Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd, [2015]) there were situations which were demonstrated that made the courts to recognize the fact that email exchanges too constitute as a binding and immediate agreement between two parties. There is distinction that has been drawn under the law of contract between what is to be considered as communication that is immediate and one that is delayed inherently or a communication that is non-instantaneous. There are ramifications of this separation on the determining as to where and when the offers acceptance of a contract is to be finalized. The non-instantaneous forms of communication are subjected to the application of Postal Acceptance Rule. This principle under common law deems that acceptance has been made at the place and time of the communication. For example, conclusion of the negotiations would be considered to have been made through the mode of a mail at the place and time where the acceptance has been made, irrespective of the fact as to whether the offeror has received the dispatch or not. Where it is through instantaneous communication form that acceptance has been made, such as through a conversation on the telephone, it is immediately that the contract is co nsidered to have been formed at the place where the same has been received rather than being from the place that it had been sent from. The distinction is required to be made between the different communication categories that are there since it is important to determine the law that will be applicable which will govern the contract, meaning thereby the jurisdiction that will be applicable in the case a jurisdiction clause is not there. It is essential to determine the jurisdiction correctly in the situation where there is a litigation that arises with respect to the contract, as if the proceedings are brought forward in a jurisdiction that is inappropriate either internationally or nationally it would lead to the plea of there being a forum non conveniens and the court will have the discretionary power of dismissing the case on the grounds that an incorrect forum had been approached with respect to the case. It have has been observed frequently that email and other communications that are based through internet have been treated frequently by courts as being instantaneous. Therefore, with respect to the law which governs all other types of communications that are formed through instantaneous communication, the formation of contract shall take place immediately at the place where the other party has received the email. However, in the situation wherein there is slightly ambiguity with respect to the receiving of the email of the recipient. In the case of Centrebet Pty Ltd v Baasland [2012] (Centrebet Pty Ltd v Baasland, [2013]) and in the case of Olivaylle Pty Ltd v Flottweg GMBH and Co KGAA (No 4) [2009] (Olivaylle Pty Ltd v Flottweg GMBH and Co KGAA (No 4), [2009]) it was determined that the receipts location would be the place to where there was actual sending of the email i.e. location of the computer of the recipient. An essential issue which arises is when will a contract, be said to have been formed through an email. If an email is to constitute a binding and immediate agreement between two parties, the contractual requirements which are required basically are that of offer and acceptance which must be met necessarily. It is required to be made to the courts evident that through the exchanges of the emails, circumstances that are surrounding and conversations that took place externally, there was an intention by both the parties to be form a contract as well as be bound by the same. In the Vantage Systems case, it was opined by the court that there would be contract that would arise as a result of there being an exchange of emails where there was an intention from both the parties for the same to get concluded and have an agreement that is binding on both the parties. Through email when the tenant agreed to the tenancy agreement that was revised by landlord, the parties were considered to be bou nd by that agreement immediately. The intention that was there for creating relations that are contractual in nature requires assessment that is objective of the state of situations and affairs that was in existence between the two parties prior conversations that had taken between the parties, the situations that surround them and the emails which were exchanges. There were all essential factors that determine whether there was such an intention that existed (Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd, [2015]). Similarly in the Stellard Pty Ltd Anor v North Queensland Fuel Pty Ltd, there was a binding sale contract for a land that through exchange of emails was concluded between the two parties. Though the wordings that were stated precisely on the email of acceptance was that the offer would be subject to the contract still the contract was formed (Stellard Pty Ltd v North Queensland Fuel Pty Ltd, [2015]). The court in this case looked at the wider correspondence that took place through email, the discussions that were done previously on issues as well the parties conduct and it was found that the intention which was required for forming of a contract did exist at the time when the acceptance email had been sent forth despite the fact that the email stated that it would subject to contract. There being a mere intention of having a written agreement formally some time later did not invalidate the informal arrangement that had taken place and agreed upon through the emails. Further, the court also noted that the fact that it was mentioned that offer mentioned below was accepted in the exchange was essential in determine the intention since there was use of terminology of accept and offer which was made which are terminology that are contractual classically. It quite commonly these days that emails exchanges that are commercial in nature are observed and they do constitute of concluding and binding agreements between two parties. It is as a caution that these latest case can be observed for those who are negotiating frequently the terms of contract through correspondence by mode of email. The importance that is also highlighted in these cases is that of using decisive and clear language so that intention can be evidence as to where a person wishes to be bound and where the person does not wish to be bound by exchanging emails. References Centrebet Pty Ltd v Baasland[2013]NTSC 59. Olivaylle Pty Ltd v Flottweg GMBH and Co KGAA (No 4)[2009]FCA 522. Stellard Pty Ltd v North Queensland Fuel Pty Ltd[2015]QSC 119. Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd[2015]WASCA 21.