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Electronic signatures – valid?

 A recent HC judgment should strike fear into the hearts of property lawyers. 
 
Section 2 LP (Miscellaneous Provisions) Act 1989 is familiar to all property lawyers and states that a contract for the sale of an interest in land has to be signed by or on behalf of each party. The HC has recently considered a case regarding an automatically generated email signature.

Two parties had a dispute over a right of way, but came to an agreement and then instructed their lawyers. The solicitors agreed in a single email chain to compromise the dispute by the transfer of a small piece of land in consideration of £175,000. Following an exchange of emails, one firm emailed an affirmative reply accepting the offer and this email included a standard signature in the footer: name, job title, name of firm and contact details. The HC had to decide whether a contract had been created and whether the electronically generated signature in the footer constituted a signature for the purposes of s2. The judge concluded that: ‘Looked at objectively, the presence of the name indicates a clear intention to associate oneself with the email – to authenticate it or to sign it… The use of the words “Many thanks” before the footer shows an intention to connect the name with the contents of the email.’

The HC rejected the argument that a ‘signature’ had to be handwritten (whether scanned or inserted electronically). 

Thus, a name automatically added to an email in the footer was a signature for the purposes of satisfying s2. Firms may wish to review their IT procedures and generation of automatic email signatures as a result. Of more relevance is the use of ‘subject to contract’. Practitioners have been more relaxed in their use of this wording at the top of correspondence following the introduction of s2. It is suggested that the use of ‘subject to contract’ on all pre-contract exchanges (whether email or hard copy) is rapidly reintroduced. See Neocleous v Rees [2019] EWHC 2462 (Ch). 
 

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