Shorter Reads

From house chains to email chains – Are email signatures binding?

Imogen Jones comments on the recent decision that a binding property contract can be formed by emails signed with a solicitor’s email signature.

1 minute read

Published 2 October 2019

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In a recent case (Neocleous v Rees [2019] EWHC 2462 (Ch)), the Court held that a binding contract for the disposition of land could be formed by a string of emails signed with a solicitor’s email signature.

A contract for the sale of land must include: offer, acceptance, consideration and intention to create legal relations (section 2 of the Law of Property (Miscellaneous Provisions) 1989 Act). It must also be in writing, incorporate all the terms that the parties have expressly agreed and must be signed by or on behalf of each party.

In the case of the present email chain, the lawyers identified the land and included an agreed price. The key decision for the court was whether the emails were signed for the purpose of a sale of land contract. The Court held that that the emails were signed by the automatically generated email signature included at the bottom of emails. For these purposes, the Court held that the necessary requirements were met for the sale of land and to create a contract which was binding between their clients.

The Defendant argued that the signature requirement had not been met. It was argued that because the email signature was automatically generated, it was not sufficient to bind a party to a contract. The Court rejected this argument.

In support of its decision, the Court referred to a Law Commission consultation document on Electronic execution of documents, where it was stated (in a provisional view supported by case law) that an electronic signature is capable of meeting a statutory requirement for a signature if an ‘authenticating intention’ can be demonstrated.

The Court noted that the ‘ordinary meaning’ of the word signature has changed and that the Court should be guided by recent case law and the Law Commission report.

In this case, the Court considered that the email footer was sufficient to act as signing for the following reasons:

  • The footer was present because of a conscious decision to insert the contents;
  • the sender was aware that their name was being applied as a footer (and the sender could presume this);
  • the use of ‘Many thanks’ before the footer, showed an intention to connect the name with the contents of the email; and
  • the name and contact details in the signature was in the conventional style of a document signature .

The offer which was the subject of the email chain came as a settlement for a dispute involving a right of way. It is important to note that the Defendant client had given the solicitor instructions to accept the offer. The Defendant later attempted to renege on this settlement due to a technical difficulty in vacating a subsequent court hearing.

Conclusion

There is arguably little danger in allowing contracts to be formed in this manner, as in the present case it can be shown that there was intention to create such a contract, it was in writing and it was concluded by a sign off from a solicitor.

In this instance, as considered by the Court in the case, this interpretation is in line with the policy decision behind the 1989 Act, to avoid uncertainty.

Though we should note the Court’s evolving view of signatures and be wary of what may constitute a signed and binding agreement.

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Shorter Reads

From house chains to email chains – Are email signatures binding?

Imogen Jones comments on the recent decision that a binding property contract can be formed by emails signed with a solicitor’s email signature.

Published 2 October 2019

Associated sectors / services

  • Commercial
  • Commercial real estate

In a recent case (Neocleous v Rees [2019] EWHC 2462 (Ch)), the Court held that a binding contract for the disposition of land could be formed by a string of emails signed with a solicitor’s email signature.

A contract for the sale of land must include: offer, acceptance, consideration and intention to create legal relations (section 2 of the Law of Property (Miscellaneous Provisions) 1989 Act). It must also be in writing, incorporate all the terms that the parties have expressly agreed and must be signed by or on behalf of each party.

In the case of the present email chain, the lawyers identified the land and included an agreed price. The key decision for the court was whether the emails were signed for the purpose of a sale of land contract. The Court held that that the emails were signed by the automatically generated email signature included at the bottom of emails. For these purposes, the Court held that the necessary requirements were met for the sale of land and to create a contract which was binding between their clients.

The Defendant argued that the signature requirement had not been met. It was argued that because the email signature was automatically generated, it was not sufficient to bind a party to a contract. The Court rejected this argument.

In support of its decision, the Court referred to a Law Commission consultation document on Electronic execution of documents, where it was stated (in a provisional view supported by case law) that an electronic signature is capable of meeting a statutory requirement for a signature if an ‘authenticating intention’ can be demonstrated.

The Court noted that the ‘ordinary meaning’ of the word signature has changed and that the Court should be guided by recent case law and the Law Commission report.

In this case, the Court considered that the email footer was sufficient to act as signing for the following reasons:

  • The footer was present because of a conscious decision to insert the contents;
  • the sender was aware that their name was being applied as a footer (and the sender could presume this);
  • the use of ‘Many thanks’ before the footer, showed an intention to connect the name with the contents of the email; and
  • the name and contact details in the signature was in the conventional style of a document signature .

The offer which was the subject of the email chain came as a settlement for a dispute involving a right of way. It is important to note that the Defendant client had given the solicitor instructions to accept the offer. The Defendant later attempted to renege on this settlement due to a technical difficulty in vacating a subsequent court hearing.

Conclusion

There is arguably little danger in allowing contracts to be formed in this manner, as in the present case it can be shown that there was intention to create such a contract, it was in writing and it was concluded by a sign off from a solicitor.

In this instance, as considered by the Court in the case, this interpretation is in line with the policy decision behind the 1989 Act, to avoid uncertainty.

Though we should note the Court’s evolving view of signatures and be wary of what may constitute a signed and binding agreement.

Associated sectors / services

  • Commercial
  • Commercial real estate

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