Evidence of an electronic contract requires at the least a demonstration of its integrity

August 21, 2017
By François Larose and Amy Dam

The Superior Court of Québec recently ruled on the level of evidence required to prove the existence of an electronic contract.

The plaintiff, M. Aymane Tabet, worked as a stock broker for Golden Market Management (« GMM »), whose office neighbour was defendant, Equityfeed Corporation (« Equityfeed »). He alleged having concluded an agreement with Equityfeed whereby he would build a software in exchange of significant revenues, and claimed from Equityfeed and its CEO, M. Stephan Touizer, damages exceeding $700,000, including punitive damages.

Equityfeed had been mandated by GMM to create a software, entitled the NewsTrader, for use by GMM. The software was created in April 2010 and the plaintiff was one of the users.

The plaintiff claimed that, about three months later, M. Touizer apparently recognized his contribution in the NewsTrader and proposed a collaboration agreement whereby the plaintiff would develop a software, entitled Newsfeed. To access the contract, the plaintiff alleged he had to enter an Equityfeed website, with a username and password, and provide his consent by clicking on an “I Accept” button. The plaintiff claimed he signed the contract, saved a copy of the contract on this laptop computer (which has been since destroyed) and printed a paper copy. A few months later, the plaintiff claimed Equityfeed offered the Newsfeed on its website, without his authorization and without exchange of royalties.

The defendants denied having concluded any agreement whatsoever with the plaintiff. According to them, the agreement, which a pure product of the plaintiff’s imagination, was never signed, and the Newsfeed never existed.

The Court noted that the plaintiff’s allegations evolved according to the stages of the case. For instance, in his initial demand letter, he asserted his copyright in the Newsfeed but made no mention of the agreement at issue. Later however, he admitted his contribution was limited to ideas and concept, and recognized his action relied solely on the agreement. Moreover, in his proceedings, he affirmed the Newsfeed was completed following signing of the agreement., but upon proof by the defendants that the software was completed well before (it was admitted that the NewsTrader and Newsfeed were one and the same), he modified his version of the facts at trial and affirmed the objective of the agreement was to improve the existing software. His versions were however not corroborated by further evidence.

The Court also commented on the weakness and lack of credibility of the plaintiff’s evidence. To start, his laptop was destroyed and he had no knowledge of the exact URL address that would have allowed retracing the agreement – making it impossible for him to prove where the document originated and that the agreement’s integrity was maintained. Also, the copy of the alleged agreement included a footnote with an incomplete URL address which indicated the agreement was created using a programming language different from the one normally used for Equityfeed’s electronic agreements. Ironically, the agreement resembled one from GMM evidenced by the plaintiff, except that it was not shown as a continued print of a website (as was the GMM contract). The Court noted that the plaintiff provided no pertinent email exchange with defendants, no complete URL address for accessing the agreement, no laptop that was apparently destroyed, and no evidence of commercialization of the software.

With respect to the signing of the agreement, the names of the parties were typed. However, the Court held that simply typing in a name does not correspond to the definition of an “electronic signature”. Although the names identified the parties, they were not sufficient to demonstrate evidence of the willingness of the parties to adhere to the content of the agreement.

Based on the above, the Court held that the only reasonable conclusion was that the agreement was in fact fabricated by the plaintiff. Further, there was no credible evidence that the Newsfeed was ever commercialized and the amount of damages claimed was arbitrary and hypothetical, and unsupported by evidence. The Court thus dismissed the plaintiff’s lawsuit.

Furthermore, the Court found that the plaintiff’s action amounted to bad faith and consisted of an abuse of procedure since he attempted to assert an agreement which was not corroborated by any credible evidence. Rather this appeared to be an attempt to extort money from the defendants to avoid trial. Such an attitude was costly to the plaintiff as the Court ordered him to pay over $28,000 in extrajudicial fees.

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