Contact one of our advisors now Call 0800 088 6004

A Sign Of The Times – Automatic Signatures & Formality Requirements

Reasons to choose Wilson Browne

Beware of e mail exchanges which could be taken to form a legally binding contract. A recent case has held that an automatically-generated signature in an email footer can constitute a ‘signed’ contract for the purposes of the Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989).

What was the background?

In the recent case of Neocleous v Rees the claimants and defendant were originally parties to a right of way dispute. The claimants were seeking to buy out a plot of land from the defendant in order to settle the proceedings. Following negotiation on price, the parties reached a compromise agreement (the Agreement).

The claimants’ case was that the Agreement was set out in a pair of emails between the parties’ respective solicitors. Each email concluded in a familiar fashion—many thanks/kind regards, the name of the solicitor, their role, the name of their firm, and contact details. In other words, a fairly standard e mail “sign off”.

The claimants sued for specific enforcement of the Agreement. The defendant’s case was that the Agreement, though otherwise valid, fell foul of the formality requirements in LP(MP)A 1989, s 2 namely that it was a contract for the sale of an interest in land and therefore ‘must be signed by or on behalf of each party to the contract’.

What did the court decide?

The Court had a single question to decide. Did the ‘automatic footer’ inserted by Microsoft Outlook satisfy the formality requirements in LP(MP)A 1989?
Although there was no direct authority, the claimants were able to cite a series of cases where formality requirements had been satisfied digitally. In the case of J Pereira Fernandes SA v Mehta in 1996 the High Court was prepared to accept in principle that an electronic signature could satisfy the requirements of section 4 of the Statute of Frauds 1677.

The judge followed the Fernandes case. The ultimate question was whether the name was applied ‘with authenticating intent’.
The judge also queried how far the email signature could truly be said to be automatic. Although the software generated the name by default, it did so following the ‘conscious action at some stage of a person entering the relevant information and settings in Microsoft Outlook’. The person writing the email knew and incorporated this by manually typing ‘many thanks’ in order to link their name with the contents of the email.

When viewed objectively, ‘the presence of the name indicates a clear intention to associate oneself with the email—to authenticate it or to sign it’. The formality requirements in LP(MP)A 1989 were therefore satisfied and judgment was given for the claimants.

A caveat

Whilst this decision is helpful, it is not conclusive in relation to e mail signatures generally. Two particular issues remain.

  • The difficulty of establishing an authenticating intent on an objective, as opposed to subjective, basis. The judge observed that the automatic signature had been consciously set up, and that the ‘many thanks’ had been typed manually. However, a recipient cannot know how an email is constructed, nor can they necessarily distinguish manual from digital outputs (a difficulty which the judge accepted).
  • It is clear from the judge’s reasoning that any decision in this field will be subject to the ever changing development of digital products andl the degree and sophistication of their automation. When the entire body of an email is generated by default, and all the user does is click send (or not even that, in the case of auto-replies etc.), the principle of authenticating intent will be tested.

What are the practical implications of this case?

Thousands of emails are sent and received every minute bearing automatic signatures. It is now very likely that those emails are deemed to be ‘signed’ for the purposes of LP(MP)A 1989, and surely also for other legislation with similar formality requirements.

The days when a signature required handwritten authentication of pen and paper are gone. For all the convenience this will bring, there may also be unanticipated consequences. Those with an email signature inserting their name by default should spare a moment to ask themselves: do they really intend to authenticate that email’s contents?

Ika Částka

Posted:

Ika Částka

Partner

Ika is a member of the Commercial Property team and has been advising individuals and businesses across Northamptonshire since 1986, specialising in commercial, agricultural and rural property matters for both businesses and individuals.