Email negotiations: can you be contractually bound by an email?

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In the recent case of Neocleous v Rees, the Manchester County Court decided that an automatically generated email signature constituted a valid signature under section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 (the"1989 Act”). 

This is a significant case in the context of property transactions and one which should influence the way in which emails are sent between solicitors in the lead up to exchange and completion of contracts. 

What was the issue in the case of Neocleous v Rees?

A dispute between the claimant and the defendant had arisen in relation to a right of way over a piece of land owned by the claimant. Eventually the dispute was referred to the First Tier Tribunal in February 2017. However, in the lead up to the Tribunal hearing, the parties agreed to resolve the dispute through the claimant acquiring the defendant's piece of land for £175,000, with the terms being negotiated through their respective solicitors.   

On 9 March 2018, the defendant’s solicitor (Mr Tear) sent an email to the claimant’s solicitor (Mr Wise) to confirm the terms of the settlement with Mr Wise replying on 12 March 2018 stating the below, followed by Mr Wise's automatically generated email signature: 

“Thank you for your email and I confirm my agreement with its contents.

Kind regards Daniel”

Was the automated email a valid signature?

It was decided that the presence of Mr Wise's name on the email (even though it had been automatically generated through Outlook's signature function) showed he had a 'clear intention’ to associate himself with and authenticate it.

How to avoid being contractually bound by email

The case is a clear reminder to any party which is negotiating a contract to mark all emails with the wording ‘subject to contract' so as to avoid being contractually bound by the terms contained in an email or other similar form of communication. The judgment also provides an interesting example of the interaction between long standing legal principles (such as offer and acceptance) and modern forms of digital technology and how the courts will interpret such interactions.  

If you have any further questions regarding construction contracts, please contact our experts below. 

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