In a recent decision from the Ontario Superior Court of Justice, 1475182 Ontario Inc. o/a Edges Contracting v. Ghotbi, 2021 ONSC 3477, the Court held that a text message can constitute a digital signature, such that a text message can constitute a binding agreement.
In that case, there was a dispute about how much money was owing under a construction contract. The Defendant acknowledged in a text message the amount owing but failed to make any further payment to the Plaintiff. The Plaintiff sued the Defendant for the remaining money owing under the construction contract at Small Claims Court. The issue before the Court was whether the claim was within the limitation period. There is a provision in the Limitations Act, 2002 which states that the limitation period will begin from the date that an acknowledgement of the debt is made, if the person acknowledges liability, and if the acknowledgement is in writing and signed by the person making it:
13 (1) If a person acknowledges liability in respect of a claim for payment of a liquidated sum, the recovery of personal property, the enforcement of a charge on personal property or relief from enforcement of a charge on personal property, the act or omission on which the claim is based shall be deemed to have taken place on the day on which the acknowledgment was made. 2002, c. 24, Sched. B, s. 13 (1).
(10) Subsections (1), (2), (3), (6) and (7) do not apply unless the acknowledgment is in writing and signed by the person making it or the person’s agent. 2002, c. 24, Sched. B, s. 13 (10).
The question before the Court was whether the text message where the Defendant acknowledged the debt met the requirements under subsection 13(10) of the Limitations Act, 2002, such that the limitation period would start from the date of the acknowledgement of the debt.
The Small Claims Court said the acknowledgement was in writing and even though the text messages were not signed, their authenticity was not in dispute. Accordingly, the Plaintiff’s claim was within the limitation period.
The Defendant appealed the decision to the Divisional Court. The Divisional Court agreed with the Small Claims Court that the claim was within the limitation period. The Divisional Court found that the text messages were in fact digitally signed because there is a unique cell phone number that each person has and other unique identifiers associated with each person’s phone.
The Divisional Court stated as follows:
“I would also find that the express requirement of a signature is met in this case. Dr. Ghotbi [the Defendant] used his cellular telephone to send and receive texts with Mr. Lupo. Dr. Ghotbi, like all other cellular telephone users, has a unique phone number linked with his phone. In fact, there will undoubtedly be other unique identifiers associated with Dr. Ghotbi’s phone including, without limitation, an International Mobile Equipment Identifier (IMEI) number. These unique identifiers provide, in effect, a digital signature on every message sent by the user of that particular device. Again, there is no dispute that the user of the device was Dr. Ghotbi and that he sent the texts in issue. In my view, that digital signature is sufficient to meet the requirements of s. 13(10) of the Act.”
Accordingly, the Divisional Court dismissed the appeal and held that the claim was within the limitation period.
Although the decision was in the context of a construction dispute and involved a determination around the applicable limitation period, employers and employees should keep in mind that if they agree to something over text, it may constitute a binding contractual agreement.
So employers and employees should be careful about what they agree to over a text message.
If you have a situation in your workplace, get legal advice before agreeing to anything or if presented with a claim. At Minken Employment Lawyers, we can review your situation to recommend the best course of action to ensure your legal protection. With any workplace-related questions please contact us today or call us at 905-477-7011.
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Please note that this article is for informational purposes only and does not constitute legal advice.
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