MotionX Pty Ltd V Evok3d.com Pty Ltd [2022] QDC 124

Mark Wheelahan   |  Sarah Cahill  |  Zariyah Ahmed

Key takeout

This case considers whether an email exchange constituted a legally binding contract. The court asked what a reasonable person receiving the email would have understood from the terms of the email, in the context of the negotiation taking place.

While this case does not directly concern construction law, given how common place it is to negotiate contracts and agreements via emails, we considered it worth adding to our case law updates. It is an important reminder that contracts can be formed via an exchange of emails and may be enforceable, even in circumstances where the agreement is not formally documented in a deed or agreement.

Facts

In June 2019, MotionX Pty Ltd (MotionX) and Evok3d.com Pty Ltd (Evok3d) entered into a contract to buy a 3D printer from Evok3d. In the months following the purchase of the printer, MotionX became dissatisfied with its performance and claimed the printer did not operate properly. MotionX alleged that Evok3d had breached its obligations under the sales contract.

The parties negotiated with each other for some time over the printer. Ultimately, on 26 October 2021 Evok3d wrote to MotionX with an offer that included Evoke3d novating or paying out the financed amount on the printer, purchasing any saleable and merchantable printer consumables from MotionX, taking back the printer and making a cash payment to MotionX on the basis that the parties expeditiously enter into and sign settlement terms to reflect offer.

On 27 October 2021, MotionX replied stating it accepted Evok3d’s offer and proposed that settlement occur no later than 12 November 2021. Evok3d replied to MotionX on 29 October 2021 thanking MotionX for confirming and advising that the timing for settlement depended on how quickly MotionX could procure a novation or assignment of the finance agreement. That same day MotionX obtained a payout figure on its finance agreement and provided that information to Evok3d.

The settlement contemplated by the parties was delayed. MotionX, looking to enforce the agreement, sought a declaration that the emails exchanged on 26 and 27 October 2021 constituted a binding contract between the parties.

Decision

Barlow J concluded that the emails of 26 and 27 October 2021 constituted a binding contract between the parties to settle their dispute on the terms outlined in Evok3d’s 26 October 2021 email. The context of the 26 October email demonstrated Evok3d required urgency in completing the agreement. MotionX’s response on 27 October 2021 suggested a relatively short period until settlement. 

His Honour held that the Evok3d’s failure to complete settlement:

• was a breach of the settlement agreement or contract between the parties;
• indicated an intention by Evok3d to no longer be bound by the agreement; and
• demonstrated that Evok3d sought to change the terms of the agreement.