IA Fintech Member Insights: Mattersmith
In Neocleous and another v Rees, Manchester County Court recently ordered that the settlement of a land dispute reached by an exchange of emails by the parties’ lawyers was binding, when the party accepting the offer later alleged that there was no such settlement in law, by reason of the lack of a manuscript signature.
As to the land tribunal dispute, there were a number of email exchanges between the parties’ lawyers, over several weeks. The salient aspects, in a nutshell were:
9 March 2018
- Mr W (representing the Claimants) emailed Mr T (representing the Defendant), offering that the Claimants would pay £175k to settle the dispute.
- Mr T telephoned Mr W accepting the offer.
- Mr T then emailed Mr W confirming terms of settlement between their respective clients and setting out the details of the agreement, signing off the message with ‘Many thanks’ and his name, position, firm’s name and contact details.
- Mr W responded to confirm his agreement with the contents of Mr T’s email.
16 May 2018
- Mr T applied to have the case re-listed for the Defendant purporting that terms of settlement had yet to be finalised.
With reference to the particular statute law that applied to a land dispute settlement of this type, the Defendant initially contended that that (i) there was no contractual intention at the time of the 9 March email exchange; (ii) that Mr T’s email of 9 March setting out the terms of settlement failed to incorporate all of the terms of the agreement; and (iii) the agreement was not signed by both parties.
Perhaps unsurprisingly, the Defendant conceded points (i) and (ii) at trial, leaving only this question:
Did a clear exchange of emails between the parties’ lawyers amount to an agreement ‘signed by both parties’?
The Judge found that indeed it did amount to a binding agreement. The Judge’s key findings were:
- the presence of the sender’s name on the email, even in an automatically generated footer/e-signature only, showed he had a ‘clear intention’ to associate himself with and authenticate it.
- the words ‘Many thanks’ before the footer showed an intention to connect the name with the contents of the email.
- the emphasis in terms of definition of “electronic signature” in the Electronics Communication Act 2000 is not on the form of the signature (for example, whether it is a facsimile of handwriting or whether, as here, it was in typed form) but rather on its purpose, namely to authenticate or to sign.
The Judge also said the Defendant’s position appeared to involve using a ‘serendipitous technical defect in formality to renege upon a deal’ and that an ordinary person would consider that when a sender stores their name in the ‘signature’ function on emails, they do so intending to sign every email as if it were a letter.
CONCLUSION AND TAKEAWAY
Every case must be considered (and will turn) on its own facts and this is a decision of only a lower Court. However, businesses should take note of the Court’s view when committing to any commercial matters where there is a requirement for signature by both parties, that an exchange of emails with e-signatures at their foot is likely to satisfy such a requirement and be binding. It goes without saying that absent any such requirement for signatures, agreeing terms by an exchange of emails, forms a binding contractual agreement in any event.
Barry Arkle of Mattersmith
9 October 2019