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Electronic signatures: a warning sign

How do you sign your emails? If your name and contact details are automatically generated at the bottom of an e-mail, do you consider you have signed the e-mail and should be contractually bound by the contents? This was the issue for the county court in the recent case of Neocleous v Rees.

The facts

The defendants had agreed to transfer a part of their land to the claimants for the price of £175,000. The terms of the agreement were recorded in a chain of emails sent between the parties’ solicitors. Each email in the chain was signed off using an automated corporate signature tool which recorded the name, role and contact details of the solicitors. Under law, a contract for the sale of land must be in writing, incorporate all the terms of the contract and must be signed by or on behalf of each party. The claimants argued that the email chain comprised a contract which had been signed by the insertion of an automatically generated footer containing the name and contact details of the sender.

The decision

The court decided that an automated electronic signature could be valid. It was the intention of the parties at the time of correspondence for the transfer of land to take place, and the automated nature did not prevent the signature authenticating this intention. The court ordered specific performance of the contract.

The court referred to the recent Law Commission report on the electronic execution of documents in which it expressed the view that an electronic signature is capable in law of being used to execute a document, provided that the person signing the document intends to authenticate the document.

It was also relevant that the solicitor had typed the words “Many thanks” at the bottom of his email – this strongly suggested he was relying on the automatic footer to sign off his name and an intention to link the email contents to his name. The test is whether the name was applied with authenticating intent. This was clearly established and the contract was enforceable.

Points to note

Although this is a county court judgment and therefore will not bind other courts, it highlights the increasing scrutiny of electronic signatures and a willingness to accept the Law Commission’s recent report on their validity. Until there is further case law or legislation, senders of emails will need to consider whether to include disclaimer wording or expressly make email chains subject to contract to avoid the assertion of an inadvertent, validly binding contract.

Case: Neocleous v Rees [2019] EWHC 2462 (Ch)