Case Update: Is The Time Of ‘Pen to Paper’ Over?

The High Court has recently ruled that an email detailing a settlement agreement for a conveyance of land, sent by a solicitor with his standard email signature, was enough to legally bind his client.

This ruling has reaching consequences and it is a clear attempt by the judiciary to bring the law forward and reflect how we might reach agreements or contracts more often in the future. Of course, this does mean that solicitors and other professionals should carefully consider the contents of emails when using them for negotiations. This is especially important where they use a personalised email signature.

Background

In the recent case of Neocleous v Rees [2019] EWHC 2462, the parties to the case were involved in a dispute concerning a right of way over a strip of land to access a boat jetty on Lake Windermere. The Neocleous’ (Party A) owned the jetty and the Rees’ (Party B) owned the land which is used to access the jetty. Party A tried to register a right of way; however, this was met with objection from Party B and eventually lead to the dispute being brought to court.

An out of court settlement was negotiated, which in essence saw Party A purchase some of Party B’s land to access the jetty. An agreement, with terms set out, was sent by email from Party B’s solicitor to Party A’s solicitor asking them to accept, which they did. However, the email detailed a price which was £175,000; £25,000 less than what Party B wanted for her land. Later, an attempt was made by Party B to argue that the settlement terms had not been finalised, which in turn lead to Party A bringing a separate claim for specific performance of the agreement reached over email, with which they were successful.

Explanation

The common ground in this case is that under section 2(3) of the Law of Property (Miscellaneous Provisions) Act 1989 (LPA 1989), to legally bind the parties for a conveyance of land, the contract must be (1) in writing (2) incorporate all the terms that the parties have agreed in one document and (3) be signed by or on behalf of each party to the contract. Older legislation is also relevant such as section 4 of the Statute of Frauds 1677, which similarly says that to be binding, a contract it must be constituted in writing and signed by each party or on their behalf.

So, the real point of contention was whether Party B’s solicitor could bind his client through an email, which importantly included his standard email signature at its foot (so fulfilling part (3) of the LPA 1989). The High Court stated that despite the email signature being automatically generated – which is the case for almost all professionals – it involved a conscious decision to include it in the email and also gave the email authenticity (i.e. this email is certainly from Mr/Mrs X). It showed a clear intention of Party B’s solicitor to associate himself with the email’s contents. Further, the fact that Party B’s solicitor used the words ‘Many Thanks’ before the signature also showed an intention to connect the contents of the email with his name in the email signature.

Final Remarks

This case really represents a function over form approach from the Judge. It means the Court is looking at the intention of the parties at the time of agreement, rather than the form in which an agreement is made. Of course, in a technological age this is and will become ever more important. Emails have been for some time treated as the equivalent of a letter and so it does make sense that we should carefully consider the contents of an email before putting our name to them. For professionals this is a reminder to use suitable wording such as ‘subject to contract’ or disclaimers when negotiating on behalf of a client.