In A Bind: The Dangers Of E-Mail Correspondence

Recent case law highlights that an e-mail exchange may create a binding contract, without a "wet ink" signature, even for the disposition of an interest in land.

The elements required to form a contract are:

offer acceptance consideration (money or otherwise) intention to create legal relations In Nicholas Prestige Homes v Neal [2010] the Court of Appeal held that an exchange of e-mails created an agency contract. The agent sent its client an e-mail which attached sole and multiple agency terms and stated that it would be instructed on a multi-agency basis till 31 December 2007, and on a sole agency basis from 1 January 2008. The client replied, "Hi Mark, that's fine, look forward to viewings. Sally." When the property was sold through another agent in 2008, the agent claimed £10,883 commission. The court agreed that a sole agency contract had been created by e-mail. The client had breached that contract by instructing another agent. The estate agent was entitled to damages for loss of chance which, since it had also been approached by the eventual buyer, were assessed at 100 per cent or £10,883.

In Immingham Storage Company Ltd v Clear plc [2011] the Court of Appeal held that a contract had been formed by the signature of a faxed quotation which was returned as an e-mail attachment, even though the claimant had stated that a formal contract would follow. The e-mail correspondence was sufficient to form a binding contract and the formal contract would only have been confirmation.

Under section 2 of the Law of Property (Miscellaneous Provision) Act 1989, a contract for the sale or other disposition of an interest in land must be in writing and signed by or on behalf of each party. The recent case of Green (liquidators of Stealth Construction Ltd) v Ireland [2011] turned on whether e-mail correspondence between two sisters, concerning a loan from one sister to another, created a valid contract to...