A warning for all those negotiating via email
There has been a great deal of debate over whether an electronic signature is capable of meeting the statutory requirements for a signature – notably in relation to contracts for the disposal of land which must be in writing, incorporate all the terms that the parties have expressly agreed in one document, and be signed by or on behalf of each party.
The Law Commission published a report in 2019 regarding the uncertainty surrounding electronically executed documents. They expressed the view that an electronic signature is capable of being used to execute a document if the person signing has intention to authenticate the document.
In Neocleous v Rees, the claimant sought specific performance of a contract of compromise involving the disposition of land. As part of the deal, the claimant offered to buy part of the defendant’s land. The detail was set out in a string of emails between the parties’ solicitors, at the bottom of which was an automatic footer containing the name, occupation, role and contact details of the defendant’s solicitor. The case turned on whether this was sufficient to deem the document signed on behalf of the defendant.
The claimant maintained that the emails amounted to a binding contract which complied with the statutory formalities applying to land contracts (i.e. there was a single document, signed by or on behalf of each party) and the parties were legally bound.
In contrast, the defendant argued that there was no enforceable contract as, amongst other things, the email exchange was not signed by both parties. They also emphasised the point that the footer on the emails was created automatically and is added to every email sent by the defendant’s solicitor.
The court was satisfied that the defendant’s solicitor had signed the relevant email on behalf of the defendant even though the only form of signature was an automated footer. It was considered that such a footer was only present due to a conscious decision to insert it at some point, albeit subsequently automatically applied. So, the claimant was entitled to an order for specific performance.
This is a county court decision and, therefore, is not binding on subsequent decisions. However, this, together with the Law Commission Report, appears to indicate that electronic signatures, even those automatically generated, can be regarded as having the same status as a signature and great care should be taken by parties negotiating by email. Of course, individual disputes will turn on their own facts but this decision demonstrates the willingness of a court to find that an automated signature could be capable of showing authenticating intent and be binding.