Electronic signatures and contracts

Summary

In Neocleous v Rees [20 September 2019], a property contract contained in a series of emails has been held to have been validly signed by a solicitor on behalf of his client, by the automatic generation of the solicitor’s name, occupation, role and contact details at the foot of one of the emails.

Case

Specific performance was sought of an alleged contract of compromise which involved a transfer of an interest in land.

In a string of emails, one solicitor, acting for a party to the dispute, (in summary) emailed -

“Dear Daniel,

Further to our telephone conversation I am pleased to confirm that terms of settlement between our respective clients have been reached on the following basis:

(1) Your clients will pay to my client the sum of £175,000 for the transfer of my client’s jetty/boat landing plot/mooring …

I would be grateful if you would acknowledge receipt of this email and confirm your agreement to the above.

Many thanks

David Tear

Solicitor and Director

For and on behalf of AWB Charlesworth Solicitors [+ contact details]”

The solicitor, acting for the other party, responded by email -

“Thank you for your email and I confirm my agreement with its contents.

Kind regards

Daniel

Daniel Wise – Associate

Dispute Resolution for and on behalf of Slater Heelis LLP [+ contact details]”

Among other statutory formalities, a contract for the disposition (such as a transfer) of an interest in land must be signed by or on behalf of each party. The issue was whether the automatic generation of the solicitor’s name and other details at the foot of the email constituted a signature for statutory purposes.

The Court referred to a Law Commission consultation document on Electronic execution of documents where it stated that its provisional view (supported by case law) was that an electronic signature is capable of meeting a statutory requirement for a signature if an authenticating intention can be demonstrated. The Law Commission subsequently issued its report, which reiterated this position.

The County Court held that Mr Tear’s name was applied with authenticating intent and the signature was valid. Specific performance was ordered of the contract.

The Court’s reasoning was:

1 The inclusion of the footer resulted from a conscious decision to insert the contents, albeit that decision resulted from an automatic process. The recipient of such an email with the footer would therefore naturally conclude that the sender’s details had been included as a means of identifying the sender with the contents of the email.

2 The sender of the email was aware that their name was being applied as a footer and the recipient had no reason to think that the presence of the name as a signature was unknown to the sender.

3 The use of the words “Many Thanks” before the footer showed an intention to connect the name of David Tear with the contents of the email.

4 The presence of the name and contact details was in the conventional style of a signature, at the end of the document (as opposed to, for example, where the name and address appears above the text of the letter, in the conventional manner of inserting the addressee’s details).

Implications

This decision will cause senders of email communication to consider the implications of their name and other details being automatically inserted as a footer in the email and whether disclaimer wording needs to be included to prevent a contract being inadvertently created. While the decision is in a property context, it has a more general application.