Automated email signatures and contracts

Automated email signatures and contracts: How you sign off an email could lead to you becoming contractually bound by its content. This issue was recently dealt with by the County Court in the case of Neocleous v Rees.

The defendants in the case had agreed to transfer part of their land to the claimants for a price of £175,000. The terms of the deal were set out in an email exchange between the two parties’ solicitors. The emails contained a standard sign off “signature” with the sender’s name, position and contact details.

In England and Wales, a contract for the sale of a piece of land must meet the requirements of Section 2 of Law and Property (Miscellaneous Provisions) Act 1989. These require the agreement to be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each part of the agreement. The agreement must then be signed by or on behalf of each party to the contract.

In the Neocleous v Rees case, after the terms of the deal had been agreed and set out in an email exchange, the defendant withdrew from the transaction. This resulted in the claimant arguing that the email chain formed the basis of the “agreed terms” of the contract and the respective solicitors’ email signature acted as the signing of the “contract”.

The Court decided that the terms of the agreement were fully set out in the email exchange and more importantly that the automated sign off constituted a signature to create a binding contract. The reasoning for this was that in the Court’s opinion it was the intention of the parties at the time of the email exchange for the transfer of the land to take place. As a result, the Court ordered specific performance of the contract and the transfer of land on the terms of the email exchange. This decision hinged on whether the person signing the document (in this case the email exchange) intended to authenticate the document.

This decision was made at County Court level meaning that it does not bind other courts, but it does highlight the willingness of the judiciary to construe electronic email sign off as the valid execution of a contract. It would be useful for a higher court to make a decision on the same point or for legislation to be put in place to clarify whether this decision will be followed. However one point to take away from this is, when sending emails and using automated email signatures, consider how they may be construed and whether the content could result in a binding contract.

Oliver Ray is a solicitor specialising in commercial property law in the Property department at Barker Gotelee Solicitors in Ipswich.

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