What is the difference between a shareholder's notice of acceptance and rejection of an offer in a shareholder’s agreement?

Prince Edward Island, Canada


The following excerpt is from Efg Eco Forest Group Ltd. v. Scott, 2001 PESCTD 84 (CanLII):

In my opinion, if the drafters and signatories of the shareholders’ agreement wished to make receipt of an acceptance within 60 days a requirement the addition of clear words would have accomplished that goal. The contrast between articles 6.1 and 6.2 is striking in this respect. Article 6.1 specifically requires the offeror to “...serve formal notice of the offer in writing upon the Offeree at the address of the Offeree as hereinafter set out”. No such wording is contained in article 6.2. The contrast between articles 6.1 and 6.2 is further heightened by reference to the case upon which the defendant relies. In Albanese v. Albanese, [1999] O.J. No. 4911 Lofchik J. of the Ontario Superior Court of Justice considered a similar “shotgun buy-sell” provision. It appears, however, that in Albanese the agreement specifically provided that if the offeror had not received the offeree’s notice of acceptance or rejection by the expiry of the 30-day period provided in that shareholders’ agreement, the offeree was deemed to have irrevocably elected to sell his shares to the offeror on the terms and conditions set out n the offeror’s notice. There is no such requirement in article 6.2.

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