The reliance on digital communication is ever-growing, and has been accelerated somewhat by the emergence of the COVID-19 crisis and subsequent lockdown.

Traditionally, legal agreements between parties has of course been through ‘hard copy’ paper agreements with ‘wet-ink’ signatures, but the needs of the world are increasingly moving away from this.

The Law Commission has previously confirmed in September 2019 that an electronic signature is capable of meeting  statutory requirements for signature, including such requirements for contracts for the sale of land, set out in the Law of Property (Miscellaneous Provisions) Act 1989.

The recent case of Neocleous v Rees [2019] EWHC 2462 (Ch) however offers a cautionary tale on what amounts to a signature, and how a contract for the sale of land could be created unintentionally.

Automatic email ‘signatures’ – Neocleous v Rees examined

The case primarily considered the application of the Law of Property (Miscellaneous Provisions) Act 1989 (‘the 1989 Act’), section 2(1).  In simple terms, this provision requires that a contract for the sale of land is to be in writing and signed by or on behalf of each party.

The parties involved in this case owned neighbouring properties, and had been disputing the rights of way over a boat landing plot since 2014.  The matter was referred to the First-tier Tribunal of HM Land Registry, with a hearing being listed for March 2018.

Before that hearing however, Neocleous (the claimants) offered to buy the disputed area of land for £175,000.  This was accepted by Rees (the defendant), with an email exchange between the solicitors of both parties detailing this agreement.

A further dispute arose between the parties over whether the agreement for a sale had been finalised, and Rees pulled out of the deal.  Neocleous claimed that the email exchange constituted a binding contract.

It was common ground that, as the alleged contract involved the sale of an interest in land, it had to satisfy the requirements set out in section 2 of the 1989 Act.  Rees argued that it was unenforceable because the documents in question had not been signed by or on behalf of both parties.

Rees solicitor had ended the relevant email in the exchange between the two solicitors with ‘Many thanks’, followed by an automatically generated email footer containing his name and contact details. Neocleous argued that this footer amounted to a ‘signature’.

Rees argued that for a document to be ‘signed’, the person providing the signature had to make a conscious decision and take action, which was not satisfied by the automatic addition of an email footer signature.

The Court held however that an ‘ordinary person’ would consider the footer on the bottom of the email, even though automatically generated, to be a ‘signature.’

The automatic email footer was a sufficient act of signing because:

• the footer could only be present by reason of a conscious decision to include it; even if automatically generated, there was at one stage a conscious decision that the footer be automatically applied to all emails.  An ordinary person would believe that the sender’s details had been included so as to identifying the sender with the contents of the email;
• the sender of the email was aware of the footer, and their name being applied as a footer.  An ordinary person receiving the email would have no reason to suspect that the footer was included unbeknownst to the sender;
• the use of the words “Many thanks” before the footer showed an intention of the sender to connect the name in the footer with the contents of the email; and
• the footer was in the style and appearance of a signature, and was positioned at the end of the document

Anyone negotiating an agreement by email (all the more likely in the present circumstances) should be aware of this; there is a possibility that an automated footer can be viewed as showing the same intent to sign as signing off a letter, or deliberately typing your name at the end of a document.

In circumstances where you are not intending to create a formal contract, you should ensure that any message incorporates the wording “subject to contract” (or similar).

If you have any questions raised by this case or negotiating a purchase of land, please contact Neil Faunch of our Commercial Property team on 01543 267191 or at nfaunch@ansons.law

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