Our team: Kathryn Davies
In the current digital age there are more ways to sign a document than to simply put pen to paper, which is particularly useful now that most of us are working from home, but as the ways in which we may sign a document have increased, so has the risk.
Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (LPMPA) requires a contract for the sale or other disposition of an interest in land to:
(a) be made in writing;
(b) incorporate all of the terms agreed by the parties; and
(c) be signed by or on behalf of each party to the contract.
A recent case has highlighted the importance of understanding just who can sign on behalf of a party, and the ways in which in which they may do so.
The case of Neocleous v. Rees, heard in the Manchester County Court, saw litigation between the two parties concerning a disputed right of way. R’s solicitors wrote an email to N’s solicitors in an effort to resolve the dispute, proposing a solution by way of R selling the land in question to N. The email was signed off with the words “many thanks”, followed by the solicitor’s automatically generated signature. N responded to accept the proposal, at which point R changed his mind, and wanted to back out of the deal.
Looking at the three point checklist set out above, email is accepted legally as a form of writing, satisfying (a). The email set out all of the terms of the agreement, which were subsequently accepted by the parties, satisfying (b). The question therefore was whether the email amounted to a signature on behalf of R.
R argued that a typed signature, automatically generated, was not enough to amount to a “signature” for the purposes of point (c) above. The Court, however, disagreed and took the view that it did not matter that the signature was automatically generated rather than a handwritten signature. R’s solicitor was aware that his emails automatically generated a signature in the footer, and the use of the words “many thanks” showed the necessary intention to connect the signature with the contents of the email. The court therefore concluded that tests (a) – (c) set out above had been satisfied.
It is very important to remember that a solicitor may be presumed to be acting in accordance with their client’s instructions, meaning they are capable of forming a contract on behalf of their client. Whilst solicitors will not usually be setting out the terms of sale in an email, it is important to think where else, and whom else, this may apply to, such as managing agents.
In order to prevent contracts being “signed on behalf” of a client, it is vital that the words “Subject to Contract or Subject to Licence” are included where appropriate – an easy measure to ensure your communications don’t mean more than you intend them to.