Partner John Dingle, in our Commercial Property team, looks at a recent case that serves as a reminder to beware when corresponding by email – you could end up signing up for more than you bargained for.
In Stavros Neocleous and Kalliroy Neocleous v Christine Rees  EWHC 2462 (Ch), Manchester County Court held that a signature which had been generated automatically in an email footer could constitute a “signed” contract for the purposes of the Law of Property (Miscellaneous Provisions) Act 1989.
A dispute over a piece of land and a right of way resulted in two landowners agreeing in principle to buy and sell the piece of land in question. There was correspondence between two firms of lawyers and at one stage a reduction in the purchase price was proposed by email. The solicitor at the other firm replied “agreed” and sent that email complete with an automatically generated standard footer which included his name, job title, the name of the firm and the contact details. It was held that this constituted a “signature” and therefore there had been acceptance of the reduction in the price as a valid contract had been formed. The client was therefore bound by that decision. Here the loss (or reduction in the purchase price) was £25,000.
Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 says that a contract for the sale of land must be in writing, incorporate all the agreed terms and be signed by or on behalf of each party to the contract. Traditionally such contracts have required a “wet” signature but there are now more and more scenarios where it is possible to use technology to do things differently. There was also discussion in the court about the distinction between actually typing a name as opposed to it being generated automatically and the position is not entirely clear cut. However it was held that the solicitor’s use of “many thanks” before the email signature which was generated provided a link to the signature and made it clear that it was all part of the same document.
Is this decision of concern?
Yes! The message here has to be to err on the side of caution. Although this was a decision at county court level it serves as an important reminder in any context to take great care when corresponding and make it clear exactly what your instructions are and the level to which you have authority.
The difficulty is, as ever, that technology is developing faster than the law and so interpretation of the law necessarily has to follow. This can result in some unexpected decisions. Although this case was in the context of correspondence between two lawyers it is important to keep the risks in mind when agreeing any matter and this is unlikely to be the last we hear on the issue. Electronic signatures are a hot topic at the moment and the Law Commission has recently published a consultation paper on the uncertainties and issues surrounding electronic execution of documents. Watch this space!
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This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.