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Commentary on the decision in Neocleous & another v Rees  EWHC 2462 (Ch)
Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (‘the Act’), provides (amongst other things) that a contract for the sale of land can only be made in writing, containing all of the agreed terms in a single document, and that the said document (or when contracts are to be exchanged, identical copies) is to be signed “by or on behalf of each party to the contract”.
The parties to this dispute had been engaged in a previous set of proceedings in the Land Registration Tribunal, involving a right of way over a piece of land. Ultimately, the parties agreed a settlement of those proceedings, the terms of which involved the Claimants purchasing a parcel of land from the Defendant for the sum of £175,000.
The terms of the settlement which had ultimately agreed upon were set out in an email sent by the Defendant’s solicitor to the Claimants’ solicitor on 9 March 2018. The Claimants’ solicitor replied to this email confirming his agreement to the terms of the email on 12 March 2018. No consent order was signed by the parties but the trial which had been listed to take place later that month was vacated.
There followed further email exchanges between the parties with a view to finalising a consent order and the Claimants’ solicitors were placed in funds to complete. Completion, however, of the sale of the parcel of land did not take place and the Defendant sought that the Tribunal proceedings be re-listed. This prompted the Claimants to issue a claim for specific performance of the alleged compromise contract.
The Claimants argued that the two emails, on 9 and 12 March 2018, amounted to a single document, signed on behalf of each party, and that, as such, the formalities of the Act had been met. The Defendant’s position at trial (the other arguments having been conceded) was that there was no enforceable contract because the emails were not signed by the parties and, as such, did not comply with the Act.
The only issue, therefore, for the judge to determine, was whether the emails, which did incorporate all of the terms of the agreement between the parties, were signed by both parties. It was not in dispute that emails sent by the Defendant’s solicitors had automatically generated signatures bearing the name and contact details of the solicitor sending said email (as is common with emails sent using Microsoft Outlook). The Defendant’s solicitor also accepted that he had authority to settle the original claim on the terms of the email, thus enabling him to have the ability to sign this particular contract on behalf of the Defendant.
The Claimants’ case was that the typed name of the sender at the foot of an email, whether entered manually or automatically generated, has the effect of signing the email for the purposes of the Act, provided that the purpose of the name was to authenticate the document. The Defendant argued that a signature for the purposes of the Act must be deliberately applied to the document rather than automatically generated.
The Judge considered the definition of electronic signatures in various pieces of legislation, and noted that the emphasis was generally not on the form of signature, but rather on its purpose. The Judge also considered that an ordinary person would consider the signature function on Outlook to produce what is, in effect, their signature at the foot of every email had they stored their name in the programme. Whilst the Defendant sought to argue that the signature had been automatically generated, there must have been some conscious action by her solicitor in inputting his name and contact details into the Outlook settings.
Furthermore, the language of the email itself (the words “Many Thanks” at the foot of the email) suggested that the solicitor was relying on the automatic signature to sign off with his name and was aware his name would appear at the foot of the email. As such, the Judge held that the presence of the Defendant’s solicitor’s name, whether automatically generated or not, indicated a clear intention to associate himself to the email and therefore to either authenticate it or sign it for the purposes of the Act.
In an increasingly digital age, where the majority of emails sent between solicitors (and indeed other professionals) include an automatic signature, this case serves as a stark reminder that, until terms of a proposed disposal of an interest in property have been properly concluded, correspondence should be marked as being “subject to contract” so that a party is not bound to a contract by an errant email.
This is a general summary of the law as at the date of this article. It should not replace legal advice tailored to your specific circumstances. If you wish to discuss the implications of this matter further please contact us on 020 7224 0025 or by email at firstname.lastname@example.org.
This article is for information purposes only and is not legal advice. It should not be acted or relied upon and legal advice should be sought before applying any of the information in this article to any facts or circumstances.