[Ecommerce] UK High Court: email address not a signature

[Manon Ress]

QUOTE:
Many people have e-mail disclaimers and quite often auto-signatures
at the bottom of e-mails. If Mr. Mehta had incorporated an auto-
signature at the end of his e-mail, 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.
END OF QUOTE


High Court Holds that the Automatic Insertion of an e-mail Address
does not Constitute a Signature

IBLS Contributor: Alice Sculthorpe, Bird & Bird London,
alice.sculthorpe@twobirds.com
Wednesday, December 06, 2006


Introduction

On 7 April 2006, the English High Court ruled that the appearance of
the sender's e-mail address at the top of an e-mail was not a
"signature" for the purposes of section 4 of the Statute 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 e-mail offering
to provide, among other things, a personal guarantee in return for an
adjournment of the winding up hearing. The e-mail 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 e-mail was a guarantee in writing and that the
presence of his e-mail 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 e-mail constituted a sufficient note or memorandum of
the alleged agreement for the purposes of section 4.

2. Assuming the e-mail 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 e-mail 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 e-mail
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 e-mail address by the
sending and/or receiving ISP after the e-mail 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 e-mail will generally be construed as
"writing" and that a typed signature contained in an e-mail is
capable of satisfying signature requirements. It is also consistent
with previous case law 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 e-mail disclaimers and quite often auto-signatures
at the bottom of e-mails. If Mr. Mehta had incorporated an auto-
signature at the end of his e-mail, 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

Author's Name: Alice Sculthorpe

Author's Law Firm: Bird & Bird

City: London

Country: United Kingdom

Phone: + 44 (0)20 7415 6000

Fax: + 44 (0)20 7415 6111

E-mail: alice.sculthorpe@twobirds.com

Web Site: www.twobirds.com