Droit inc. – Selling a Business: Why Your Emails Could Backfire

Our recent article Vente d’entreprise : pourquoi vos courriels pourraient se retourner contre vous, authored by Laurie Propeck and Jeff Li, was republished by Droit inc. (Available in French only).

The article explores a critical and often overlooked risk in business transactions: the use of work email for communications related to the sale of a business. After closing, the buyer may gain access to the company’s email servers—potentially including sensitive exchanges between the seller and their legal counsel.

This issue came to light in the Ontario case Ellis Packaging Limited v. Ellis, where post-sale emails were used in court by the buyer. The sellers attempted to claim solicitor-client privilege, but the court ruled that the privilege had transferred to the buyer along with ownership of the company.

To help mitigate this risk, the article introduces the Great Hill clause, a contractual provision that protects privileged communications between sellers and their lawyers. While not yet standard, this clause can be a powerful safeguard when combined with simple practices—such as using a separate email address for the transaction.

Read the full article on Droit inc.