Canada: Canada's Anti-Spam Legislation: Considering CASL In Business Transactions

Last Updated: February 11 2016
Article by Anne-Marie Naud, Kirsten Thompson and Nicolas Bertrand

Most Read Contributor in Canada, September 2018

Since coming into force on July 1st, 2014, Canada's Anti-Spam Legislation ("CASL") has created new concerns and risks that must be addressed in business transactions. This post reviews those concerns in the context of asset acquisitions, specifically the risks associated with the transfer of CASL consents for the purposes of sending marketing messages to business customers. Given the volume of marketing and customer contact conducted by retailers and consumer products distributors, this may be of particular concern in acquisitions of consumer facing businesses or businesses that manufacture consumer products. A retailer or distributor that fails to address these issues at the time it obtains CASL consents, or prior to the transaction, could find a significant portion of the transaction value eroded by its inability to transfer customer contact lists.

Commercial Electronic Messages

CASL deals primarily with "commercial electronic messages" or "CEMs".1 A CEM is an electronic message that has, as one of its purposes, the encouragement of participation in a "commercial activity". This encompasses e-mails sent to the electronic addresses of customers for promotions, contests and advertisements, as well as instant message alerts or some types of social media messages used to market to and communicate with existing and/or potential customers. Importantly, the commercial aspect does not have to be the sole, or even dominant, purpose of the message – the context matters and links, footers and logos may be sufficient to turn an otherwise non-commercial message into a commercial one.

Many businesses send CEMs using customer distribution lists. The transfer of these valuable marketing tools in the context of an asset acquisition presents certain risks to purchasers, as it is subject to strict consent requirements, both privacy consent requirements (i.e. to collect, use and disclose personal information such as an email address) and CASL consents (i.e. to send CEMs to the email address that has been collected) . If customer distribution lists, or any form of personal information used to send CEMs, are transferred in violation of CASL or privacy legislation, a purchaser could expose itself to significant penalties after closing.

Transferring Consents

Pursuant to CASL, all businesses are required to obtain the consent of recipients in order to send them CEMs. Consents may be express (e.g. check here to receive CEMs) or implied on the basis of there being a qualifying relationship. One of these types of relationships  which grounds implied consent is an "existing business relationship". An existing business relationship arises, for instance, where a person has purchased a product or service from the sender within two preceding years of receiving the CEM, or has made an inquiry to the business within the preceding six months, and in either case has not unsubscribed from receiving CEMs.

CASL further stipulates that if a business has an "existing business relationship" with another person, and the business is sold, the purchaser of said business is considered to have assumed the same "existing business relationship", allowing the purchaser to continue sending CEMs to individuals until they expressly opt-out or the relationship reaches the time limit specified in CASL.

While CASL provides for the existing business relationship to be transferred following the sale of a business to a purchaser, it does not specifically state the consents that flow from that relationship and held by the business may be transferred as well. Therefore, a significant CASL issue to be addressed when dealing in an asset acquisition involves obtaining and maintaining the consents of customers to receiving CEMs on this basis. When purchasing private information used to distribute CEMs, the purchaser must ensure that the consents being purchased from the seller are validly held and transferrable under CASL (and privacy laws).

Industry Canada's Regulatory Impact Analysis Statement ("RIAS") states that (emphasis added) "express consents will transfer upon the sale of a business, should the contract of sale include a provision transferring these as a business asset." It must be noted, however, that the RIAS only represents Industry Canada's interpretation of CASL and is not the law. In addition, the RIAS only provides guidance on the transfer of express consents; the direct transfer of implied consents (such as those arising from an existing business relationship) is not addressed.

The Canadian Radio-television and Telecommunications Commission's ("CRTC") Guidance on Implied Consent (the "Guidance") adds a further layer of interpretation (emphasis added):

"When a business is sold, the purchaser can rely upon express consents obtained by the seller if the contract of sale of the business includes a provision transferring the list of email addresses for which consents have been obtained as part of all its assets. Therefore, the new owner will be able to continue sending CEMs to the recipients that gave express consent, as long as the other requirements of CASL are met.  CASL also specifically indicates, at section 10(12) that, with the sale of a business, any existing business relationships (EBR) are considered to now be with the new owner of the business."

The foregoing, however, still does not explicitly address the transfer of implied consents.

An example given by the CRTC in the Guidance seems to suggest implied consents do not transfer per se, but rather the exemption from consent created by a valid existing business relationship may be relied upon by an acquiring business. However, the onus is on the purchaser to ensure such underlying business relationships are, in fact, valid.

An important consideration here will also be which entity gets the benefit of the existing business relationship – the Guidance states that "with the sale of a business, any existing business relationships (EBR) are considered to now be with the new owner of the business". In other words, Guidance suggests that such relationships are not divisible, creating an all-or-none situation.

Validity of Consents: Keeping Track of Them All

Assuming that consents to receive CEMs are transferable, issues may arise with respect to the way that such consents are documented. A purchaser should conduct proper enquiries to ensure that the seller has kept detailed records of how, when, and for what purpose the consents were obtained and whether it has sufficient tools to keep track and identify them all. If the consents have not been validly obtained in the first place, no transfer of consent in fact occurs.

There are also particular issues that may arise when purchasing the assets comprising a division of a company. Where consent has not specifically been given to the division, but rather to the company operating said division, express consent will likely need to be obtained by the purchaser in order to continue distributing to and benefiting from the customer distribution list of the business. If both the division and the overall operating company have been relying on different types of consents arising from different types of transactions (e.g. online transactions are with the operating company, but in-store transactions are with the division) and such consents are not separated out on a customer list, distinguishing between the two can become virtually impossible.

One possible solution to this issue is for the vendor to send an e-mail on behalf of the purchaser asking customers to explicitly accept that as of the date of closing, they agree to receive CEMs from the purchaser. The e-mail must offer the option to the customer to unsubscribe at any time. Consent may even be obtained in conjunction with a contest or discount offer, provided that consent is not a condition of receiving the discount or entering the contest and the language is clear and understandable in terms of what is being consented to.

Prevention: Avoiding Exposure to Liability

As mentioned previously, Industry Canada and the CRTC both tend to suggest in their respective guidelines that express consents may be validly transferred if the purchase agreement includes specific language to that effect. Purchasers should therefore include a provision that express consents are transferred upon closing of the transaction, and carefully consider how they will validate and transfer implied consents.

Purchasers should also conduct proper due diligence to identify potential CASL liabilities that may arise. This should include an examination of how and for what purpose consent was obtained by the business, as well if proper consent management tools are in place. The potential liability of a purchaser may be further limited by including specific representations and warranties with respect to CASL in the purchase agreement, specifically regarding the validity of the consents held.

Lastly, risk may be limited by including CASL related indemnity provisions in the purchase agreement.


1. Other provisions deal with types of consent required to install software.

To view the original article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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.

Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions