Australia: Email contracts – Who, What, When and Where – The formation of binding agreements through email exchanges

Last Updated: 5 October 2015
Article by Kathleen Ready

In recent years, the courts have shown a judicial trend in formally recognising emails as a potential birthplace for contracts. Recent cases such as Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd and Stellard Pty Ltd v North Queensland Fuel Pty Ltd demonstrate situations in which the Courts will recognise email exchanges as constituting an immediate and binding agreement between parties.

Where are email based contracts formed?

In Contract law, a distinction is drawn between communication that is immediate and communication that is inherently delayed (non-instantaneous). This separation has ramifications on the determination of when and where acceptance of an offer to contract is finalised.

Forms of communication that are non-instantaneous are subject to what is known as the Postal Acceptance rule. Under this common law principle, acceptance is deemed to have been made at the time and place the communication is made. For example, acceptance that is made through the mail is deemed to conclude negotiations at the time and place that acceptance is made, irrespective of when the dispatch is received by the offeror.

Where acceptance is made through an instantaneous form of communication (such as telephone conversations), the contract is formed immediately at the place it is received, rather than where it is sent from.

Drawing a distinction between categories of communication is necessary in determining the applicable law that governs the contract (where a 'governing jurisdiction' clause is not present). The determination of the correct jurisdiction is essential where litigation arises in regards to the contract, as bringing forward proceedings in an inappropriate jurisdiction (nationally or internationally) will result in a plea of forum non conveniens (a discretionary power of the courts to dismiss a case on the grounds that the chosen forum is incorrect).

The courts have frequently treated emails and most other standard means of internet-based communications as instantaneous. In accordance with the laws governing all other forms of instantaneous communiqué, the contract is formed immediately at the place the acceptance email is received.

However, specifically where the recipient receives the email is slightly more ambiguous. Within the cases of Olivaylle Pty Ltd v Flottweg GMBH and Co KGAA (No 4) [2009] and Centrebet Pty Ltd v Baasland [2012], the location of receipt was determined to be the place the email was actually sent to, i.e. the location of the recipient's computer.

Conversely, within section 14B(1)(a) of the Electronic Transactions Act 1999 (Cth) (and all State level equivalents), it is stated that;

"the electronic communication is taken to have been received at the place the addressee has its place of business"

Unlike the court's previous findings, this section would indicate that the "place the email is received" is at the place of the recipient's business, regardless of whether the email was actually sent to or received at that location. Section 14B(2)(e) provides that where an individual does not have a place of business, that party's place of business is to be the party's place of "habitual residence".

It is currently undecided what the effect would be were a received email to put these two authorities in conflict with one another.

When will an email constitute a contract?

For an email to constitute an immediate and binding agreement between the parties, the basic contractual requirements of an offer and acceptance must be met. It must also be evident to the courts that through the email exchanges, external conversations and surrounding circumstances, both parties intended to form and be bound by a contract.

In Vantage Systems, it was held a contract can arise as a result of an email exchange where both parties intend for there to be a concluded and binding agreement. Upon the tenant agreeing (through email) to a revised version of their tenancy agreement from the landlord, the parties were immediately bound to that agreement. This 'intention to create contractual relations' requires an objective assessment of the state of affairs and circumstances existing between the parties – previous conversations, email exchanges and surrounding circumstances are all relevant factors in determining whether such an intention exists.

Similarly, in Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd, a binding contract for the sale of land was formed from an email exchange between the two parties. This contract came to be despite the precise wording within the 'acceptance email' stating that the offer was "subject to contract".

Here, the Court looked to the broader email correspondence, previous discussions on the matter as well as the conduct of the parties, and found that the requisite intention to form a contract existed at the time the acceptance email was sent, despite the "subject to contract" phrase. The mere intent to construct a formal written agreement at a later time did not act to invalidate the current informal arrangement agreed upon within the emails.

It was also noted that the statement ""we accept the below offer" that was made in the email exchange was relevant in the determination of intention due to the usage of the classically contractual terminology of "offer" and "accept".

Commercial email exchanges can, and as has been seen quite commonly do, constitute binding and concluding agreements between parties. These latest cases act as a cautionary tale for those who frequently negotiate contract terms through email correspondence. They also highlight the importance of using clear and decisive language to evidence your intention where you wish to or wish not to be bound by the present email exchange.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Kathleen Ready
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.