Contracts: automatic email footers now binding as electronic signatures
In the recent case of Neocleous & Anor v Rees ( EWHC 2462 (Ch)) the court was asked to determine whether an automatic typed email “footer” (i.e. without any scanned handwritten signature) was sufficient to contractually bind the parties in a property transaction.
The parties were in dispute regarding a right of way; the matter was referred to the First Tier Lands Tribunal (FTT) for determination. However, in the meantime the parties (via their solicitors) sought to try and resolve the matter and reach settlement. It is the means of settlement which gives rise to the question of whether an email signature is sufficient to contractually bind the parties.
The parties’ solicitors reached an agreement that the defendant would transfer to the claimants a small piece of land, and in return, the claimants would pay the sum of £175,000 to the defendant. The parties’ solicitors exchanged three emails which set out the terms of the settlement, and contained confirmation that those terms were agreed. Each of those emails contained the electronic signature of the writer in the form of an automatically generated e mail “footer” added at the end of the email.
The transfer of land did not take place and therefore the claimants issued court proceedings for specific performance of the agreement.
The defendant argued that the agreement was not binding as it did not satisfy the requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“the Act”) which requires that all contracts for the sale of land must be in writing and must be signed by or on behalf of each party to the contract.
Was the email signature in the form of the footer of the email a signature in accordance with the Act?
The court held that the automatic footer on the email was sufficient as an electronic signature in accordance with the Act, and therefore the contract between the parties was binding. The court considered the following points:
- The email signature was automatically added to the footer of the email; however, the writer was aware that their automatic signature would be applied to the email and therefore the email signature was sent with “authenticating intent.”
- The email contained the words “Many thanks” which suggested that the writer was linking the email to the email signature.
It is important to consider the implications of firing off an email containing an automatic footer. Depending on the circumstances, the addition of the footer may itself constitute an electronic signature without any other requirement that it is accompanied by a scanned signature in handwriting – and you might therefore be entering into a binding contract. If there is any risk that the email you are sending might constitute a binding contract (whether it is a property transaction or any other transaction), consider whether you need to insert express wording into that email to make it clear that your email is not intended to be binding, such as adding the words “subject to contract and subject to signature”.