Avoid Forming Contracts with your Email Signature

Email signatures and disclaimer notices are common in business and have, for a long time, addressed important matters such as confidentiality and the responsibility (or lack thereof) for virus scanning. In light of a recent High Court decision, however, the spotlight is now on another role that email notices have to play - avoiding the formation of a contract.

In the case of Neocleous v Rees, the High Court found that a lawyer had concluded a contract for the sale of land on his client’s behalf by sending an email that automatically included his name and title in the form of an email signature. This, said the court, amounted to an electronic signature. In this case, the unintentional upshot was the creation of a contract that ultimately cost the lawyer’s client a considerable amount of money.

The key question in such situations (whether in an email or any other document) is whether you took an active step to apply a mark to the document in order to authenticate it. In Neocleous v Rees, the lawyer had set up Microsoft Outlook to automatically add his name and title to his outgoing emails. The court found that he had, therefore, taken that important active step.

The question is not necessarily a simple one to answer and the case itself is by no means conclusive. What difference, for example, would it have made if the lawyer’s IT department had set up the signature? It does, however, mean that care should be taken when communicating by email, particularly where business matters are concerned.

Update Your Disclaimer!

In light of this surprising case, we have updated our Email Disclaimer Notice template with new features designed to help avoid such accidental contract formation. An optional “subject to contract” header is now included, followed by a more substantial paragraph in the notice itself, expressly stating that contracts are not concluded by email by your business and that your employees and agents are not authorised to enter into contracts with other parties by email. Disclaimer or no, however, we would still suggest that care should be taken with the wording of emails to avoid the appearance of any intention to create a contract via email.

We have also amended the paragraph on data protection to optionally refer to the future “UK GDPR” in preparation for Brexit. The UK GDPR will incorporate the current EU GDPR into UK law once the EU legislation ceases to apply. Similar changes to GDPR references will be going live across our portfolio as exit day approaches.