A legally binding contract can be made by the addition of an automated signature to an email, the High Court has ruled in a land dispute case.
The owners of two plots of land on Lake Windermere disagreed about the right of way to a boat landing. To settle the dispute, the claimant agreed to sell a small strip of land to the defendant for £175,000.
The terms of the deal were agreed between the landowners’ solicitors by email – but the defendant failed to complete the transaction. When the case went to court, the defendants argued that the contract could not be enforced as it had not been signed as required by the Law of Property Act.
The claimant argued that both solicitors had agreed the contract by email and that it had been signed by the addition of the words ‘many thanks’ followed by the automated email signature of David Tear, the defendants’ solicitor.
The court was asked to decide whether the addition of the automated email signature made a binding contract or not. The judge, His Honour Judge Pearce found in favour of the claimant and ordered the defendant to perform the contract.
He ruled that the addition of David Tear’s automated email signature showed that he had a clear intention to associate himself with and authenticate the agreement. He described the defendant’s attempt to wriggle out of the contract as using a ‘serendipitous technical defect in formality to renege upon a deal’.
James Burgoyne, Director – Claims & Technical, Brunel Professions says the case shows how careful all professionals should be in discussing contract terms by emails, particularly where an automated email signature can be added. “While this case related to the law of property, professionals from all disciplines should take heed and add the words ‘subject to contract’ to correspondence, unless they want to be bound by its contents,” he said.
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