Reminder to use ‘subject to contract’ if you do not intend to form a contract
The unintended side-effects of an automated email signature footer were debated by the High Court in Manchester.
In Neocleous v Rees [2019] EWHC 2462 (ch) the parties had been locked in a right of way dispute over some land in Cumbria.
The Defendant's property was comprised of two separate pieces of land, the smaller being a piece of land and an adjacent jetty (known as "the Landing Plot"), only accessible on land by crossing the Claimants' property. The right of way is on the Defendant's title but such a right is not referred to on the Claimants' title.
In the lead up to the Tribunal hearing to resolve the matter the parties entered into some discussions between the solicitors acting for the parties, in which it was discussed whether the dispute might be resolved by the Claimants acquiring the so-called “Landing Plot”.
The offer was made by the Defendant’s solicitor by email, with his signature automatically appended to the bottom of the email. After some further exchange, the Claimant accepted a new offer of a slightly lower sum, with the name of the solicitor attached to the bottom of the email.
The court was asked whether the two emails together formed a property contract to fulfill the requirements of Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. The court noted that it was being asked to decide on a matter of principle, not whether the defendant should have an opportunity to renege on what appeared to be an already concluded agreement.
It therefore found that what is required to conclude a contract for the sale of property is a name and an 'authenticating intent' - which in this case there was. The solicitor for the defendant was acting on the client’s instructions and the addition of the phrase ‘Many thanks’ without further sign off suggested that he was aware that his name would appear automatically.
If it is more convenient to use an exchange of emails and electronic signatures but wish to include documents outside of the email chain, it is best to mark all correspondence ‘subject to contract’.
Posted on 11/06/2019 by Ortolan
