High Court holds auto insertion email not signature

06 September 2006

Alice Sculthorpe

Introduction

On 7 April 2006, the English High Court ruled that the appearance of the sender’s email address at the top of an email was not a “signature” for the purposes of section 4 of the Statue of Frauds, because it had not been included with the intention of giving authenticity.

Relevant legislation

Under section 4 of the Statute of Frauds 1677 (the Statute), an action can only be brought to compel a defendant to stand by a promise to satisfy another person’s debt (i.e. a guarantee) if there is an agreement in writing, or a memorandum or note evidencing an oral agreement, which has been signed by the person making the promise or by a person authorised to sign it on the guarantor’s behalf. The purpose of the Statute is to protect people from being held liable on informal communications made without sufficient consideration or expressed ambiguously, or where such a communication is fraudulently alleged.

Facts

This was an appeal by Mr Mehta against a decision granting the respondent (JPF) summary judgment. JPF had supplied bedding products to Bedcare (UK) Limited (Bedcare) a company of which Mr Mehta was director. When Bedcare failed to pay for the products it had received, JPF presented it with a winding up petition. Mr Mehta asked a member of staff to send JPF’s solicitors an email offering to provide, among other things, a personal guarantee in return for an adjournment of the winding up hearing. The email was not signed by anyone - Mr Mehta’s name did not appear at the end, or indeed anywhere else in the body of the e-mail - but was described in the header as having come from nelmehta@aol.com, an address that appeared on other e-mails sent to JPF’s solicitors, which had been signed by Mr Mehta. JPF’s solicitor telephoned to accept the proposal and adjourned the petition hearing. However no action was subsequently taken by Mr Mehta to honour the guarantee.

On an application by JPF to enforce the guarantee, the County Court held that Mr Mehta’s email was a guarantee in writing and that the presence of his email address on the e-mail received by JPF’s solicitor constituted sufficient signature for the purposes of section 4 of the Statute.

The two issues on appeal were:

1. Whether the email constituted a sufficient note or memorandum of the alleged agreement for the purposes of section 4.
2. Assuming the email was a sufficient note or memorandum, whether it was sufficiently signed by or on behalf of Mr Mehta.

Decision

HH Judge Pelling QC held that the e-mail was capable of being a sufficient written note or memorandum for the purpose of section 4 of the Statute, but that it did not contain a signature, within the meaning of that section, of either Mr Mehta or his authorised agent.

Sufficient note or memorandum

On the authorities it appeared to the Judge that where there was an offer in writing made by the party to be bound which contained the essential terms of what was to be said, and the party to be bound accepted that his offer had been accepted unconditionally, albeit orally, there was a sufficient note or memorandum to satisfy section 4. He therefore concluded that the email was capable of being a sufficient memorandum for the purpose of section 4 because it was in writing, and it was not disputed by Mr Mehta that the offer was accepted orally.

Signature

HH Judge Pelling QC went on to give detailed consideration to the issue of whether the automatic insertion of the sender’s email address was capable of constituting a signature. He relied in particular on a nineteenth century case, Caton v Caton, in which the House of Lords distinguished between signatures giving authentication to a whole document and those appearing incidentally or in relation to only part. In the absence of evidence to contrary, the Judge held that the automatic insertion of a person’s email address by the sending and/or receiving ISP after the email was transmitted was clearly in the “incidental” category. It could not be deemed to be intended as a signature for the purposes of section 4. In the Judge’s view, to conclude otherwise would undermine or potentially undermine the Statute’s purpose and have widespread and wholly unintended legal and commercial effects.

HH Judge Pelling QC noted that if the respondent’s arguments were applied to a fax communication it could result in the automatically generated name and fax number of the sender, on a faxed document that is otherwise a section 4 note or memorandum, constituting a signature for purposes of the Statute.

The Judge accepted that a party could sign a document for the purposes of section 4 by using his name or initials, and possibly by using a pseudonym or a combination of letters and numbers, providing always that whatever was used was inserted into the document in order to give, and with the intention of giving, authenticity to it. Its inclusion must have been intended as a signature for these purposes.

Comment

There are very few types of contract under English law that require writing or a signature in order to be enforceable. A guarantee, however, is an exceptional type of contract that does require this.

Although this was one of the first UK cases to consider questions of writing and signature in the context of an e-mail, the decision did not come as a surprise. The reasoning was consistent with widely accepted legal opinion that email will generally be construed as “writing” and that a typed signature contained in an email is capable of satisfying signature requirements. It is also consistent with previous caselaw concerning telexes.

HH Judge Pelling QC referred to the powers given to ministers under the Electronic Communications Act 2000 to remove specific statutory requirements for communications to be on paper. He noted that, in the Law Commission’s view, no significant changes were deemed necessary in relation to statutes that require signatures, because whether those requirements have been satisfied can be tested in a functional way by asking whether the conduct of the would-be signatory indicates an authenticating intention to a reasonable person. The Judge felt that his approach in this case was consistent with the Law Commission’s view.
Many people have email disclaimers and quite often auto-signatures at the bottom of emails. If Mr Mehta had incorporated an auto-signature at the end of his email, the case would almost certainly have been decided differently since by doing so he would most likely be taken to have intended to authenticate the document.


Mehta v J Pereira Fernandes SA [2006] EWCA 813 (CH)
HH Judge Pelling QC, 7 April 2006

Published in the September 2006 edition of World Data Protection Report