AUTOMATICALLY CREATED NAME AT THE FOOT OF AN EMAIL CREATES BINDING CONTRACT TO SELL LAND: “MANY THANKS” FOR THIS

The judgment of HHJ Pearce in Neocleous & Anor v Rees [2019] EWHC 2462 (Ch) is not about procedure.  However it is a judgment that many litigators must become familiar with. An automatically generated name at the end of an email was sufficient to create a binding contract under the Law of Property Act 1989.

“It was common ground that the rule that a footer of this type be added to every email involved the conscious action at some stage of a person entering the relevant information and settings in Microsoft Outlook. Furthermore, Mr Tear knew that his name was added to the email. Indeed, the manual typing rather than automatic inclusion of the words “Many Thanks” at the end of the email strongly suggests that the author is relying on the automatic footer to sign off his name.”

THE CASE

The claimants and the defendant agreed to sell a piece of land, in order to resolve a property dispute.  There was an exchange of emails between the parties’ solicitors.  A price was for sale was agreed and the action compromised.

The defendant, however, failed to comply.  The defendant argued that there was no binding agreement, the defendant’s case being:

    1.  that the alleged contract fails to comply with the formalities required by Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“the 1989 Act”) and therefore is not enforceable.
    2. Section 2(1) of the 1989 Act provides, in so far is relevant:
“(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all of the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.

...

(3) The documents incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract.

…”

  1. In this case, the putative contract is contained in a string of emails. The purported signature of the solicitor on behalf of the Defendant was by “automatic[1] generation of his name, occupation, role and contact details at the foot of an email. The case raises a point as to whether this is adequate to render the document “signed” on behalf of the Defendant within the meaning of section 2(3) of the 1989 Act which has been explored by various authors but seemingly has not previously been the subject of a reported determination.

THE DEFENDANT’S CONTENTION

The issue was whether the automatic generation of the defendant’s solicitors name at the foot of the email was sufficient to comply with the Law of Property Act.  The defendant contended that the name was automatically created and therefore not “signed” by the solicitor on her behalf.

THE JUDGE’S DECISION – YES IT WAS

The judge found that the inclusion of the Defendant’s solicitors name at the end of the email was sufficient. Even though that signature was generated automatically.

    1. It must immediately be identified that there is an unattractive aspect to the position taken by the Defendant. As Mr Tear readily accepted in cross-examination, his client had given him instructions to accept the offer. On the face of it, the Defendant’s position appears to involve using a serendipitous technical defect in formality to renege upon a deal reached during the course of litigation where the apparent agreement led to a court hearing being vacated on the assumption that the case had been settled.
    2. However, as the Defendant rightly points out, the issue before the court is one of principle and cannot be decided simply on the basis of the court’s attitude to the stance taken by the parties.
    3. There is force in the submission of Mr Heath on behalf of the Defendant that the criticism of the decision in Firstpost by the authors of Emmett and Farrand on Title involves a misunderstanding of the judgment in particular of Peter Gibson LJ, in so far as they attribute to him an assertion that the signature must be in the writer’s own hand, not just printed or typed, and that this accords with the decision of the Court of Appeal in Goodman v J Eban Ltd [1954] 1 QB 550. It would appear on a proper reading of the judgment of Peter Gibson LJ that what he was seeking to do when he cited the judgments of Sir Raymond Evershed MR and Denning LJ in Goodman was to identify what it meant by “signature” in ordinary usage, rather than to identify the ratio of the decision in the case that they were deciding
    4. In any event, that decision in Firstpost is binding on me. It is clear from that decision that a court dealing with the formality requirements of Section 2 of the 1989 Act should treat with caution authorities under earlier statutes. But that does not help to determine what is sufficient to render a document “signed” for the purpose of that Act.
    5. The Defendant’s approach to the meaning of “signed”, that it requires a handwritten name (or at least a facsimile of such handwriting), depends, as indicated above, on the alleged meaning of that word to the ordinary person. But herein lies a contradiction in the Defendant’s case. Whilst the Court of Appeal in Goodman may have correctly identified what the ordinary person would mean by that word at the time their judgment was handed down, the ordinary usage of words has a tendency to develop. This can be demonstrated clearly on the material before the court in this case – the word “signature” is used in a different sense that Sir Raymond Evershed MR and Denning LJ would have understood it at the time of the Goodman judgment, or indeed Peter Gibson LJ would have understood it when he gave judgment in Firstpost, as can be seen within the domestic and EU legislative materials cited above, judgments such as that of Tomlinson LJ in Golden Ocean and indeed the Microsoft Outlook programme itself. Many an “ordinary person” would consider that what is produced when one stores a name in the Microsoft Outlook “Signature” function with the intent that it is automatically posted on the bottom of every email is indeed a “signature.”
    6. Unless one treats Firstpost as authority for the proposition that “signature” means what an ordinary person would have believed the word to mean at some point in the past, it is not authority for the proposition that the word has any particular meaning beyond that which an ordinary person would understand it to bear. In the current age, that would in my judgment be capable of encompassing the wording of the footer to Mr Tear’s email.
    7. The sounder guide to whether it in fact is a signature is the test identified by His Honour Judge Pelling QC in J Pereira Fernandes and adopted by the Law Commission in its Report namely whether the name was applied with authenticating intent.
    8. The Defendant places understandable emphasis on the fact that the footer is created “automatically” in the sense that it is added to every email that is sent by Mr Tear. But the use of the word “automatic” may tend to mislead. It is true that the addition of the words is “automatic” in the sense that they are added to every individual email without any action or indeed intention on Mr Tear’s part. It was common ground that the rule that a footer of this type be added to every email involved the conscious action at some stage of a person entering the relevant information and settings in Microsoft Outlook. Furthermore, Mr Tear knew that his name was added to the email. Indeed, the manual typing rather than automatic inclusion of the words “Many Thanks” at the end of the email strongly suggests that the author is relying on the automatic footer to sign off his name.
    9. In such circumstances, it is difficult to distinguish between a name which is added pursuant to a general rule set up on an electronic device that the sender’s name and other details be incorporated at the bottom from an alternative practice that each time an email is sent the sender manually adds those details. Further, the recipient of the email has no way of knowing (as far as the court is aware) whether the details at the bottom of an email are added pursuant to an automatic rule as here or by the sender manually entering them. 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.
    10. It is important to bear in mind the policy behind the 1989 Act, as set out by Peter Gibson LJ in the passage cited at paragraph 43 above. There is good reason to avoid an interpretation of what is sufficient to render a document “signed” for the purpose of Section 2 where that interpretation may have the effect of introducing uncertainty and/or the need for extrinsic evidence to prove the necessary intent.
    11. In my judgment, no such difficult arises if the email footer here is treated as being a sufficient act of signing:
i) It is common ground that such a footer can only be present because of a conscious decision to insert the contents, albeit that that decision may have been made the subject of a general rule that automatically applied the contents in all cases. The recipient of such an email would therefore naturally conclude that the sender’s details had been included as a means of identifying the sender with the contents of the email, since such a footer must have been added either as a result of a conscious decision in the particular case or a more general decision to add the footer in all cases.
ii) The sender of the email is aware that their name is being applied as a footer. The recipient has no reason to think that the presence of the name as a signature is unknown to the sender.
iii) The use of the words “Many Thanks” before the footer shows an intention to connect the name with the contents of the email.
iv) The presence of the name and contact details is in the conventional style of a signature, at the end of the document. That contrasts with the name and contact address of Mr Hale, the person alleged to have signed the letter in Firstpost, whose name and address appeared above the text of the letter, in the conventional manner of inserting the addressee’s details.
Conclusion
  1. For these reasons I am satisfied that Mr Tear signed the relevant email on behalf of the Defendant. Given the common ground between the parties on other issues, it follows that the Claimants are entitled to the order for specific performance that is sought.