19 October 2006 | Paul Abbiati

When can an email be accepted as an official signature?

THE CASE

Portugese bed maker J Pereira Fernandes SA launched a winding-up petition against a British retailer, Bedcare (UK) for unpaid debts.

Nilesh Mehta, director of Bedcare, asked a member of staff to send an e-mail to JPF's solicitors, offering a personal guarantee of £25,000, if JPF agreed to adjourn the hearing for seven days.

The e-mail also contained a schedule for repaying the debt over six months and offered a payment to account of £5,000.

JPF said a telephone call followed, in which it accepted the offer. However, by the time Bedcare was wound up, neither money nor documents had been returned.

Then, the bed maker successfully enforced the personal guarantee against Mehta awarding JPF summary judgment totalling £24,985.53 plus costs. Mehta appealed, disputing the debt owed to JPF.

The issue for Judge Pelling QC was the claim that, because JPF did not produce a signed agreement or personal guarantee, its only claim was against Bedcare, which now did not exist.

He accepted the view of the 2001 Law Commission Paper that UK laws requiring signatures could be satisfied in most cases by this test: whether the behaviour of the would-be signatory indicates an authenticating intention to a reasonable person.

Judge Pellin ruled that if someone had typed their name in the body of the e-mail, that would satisfy the signature requirements.

But, in the case before him, there was no signature in the body of the e-mail. The inclusion of Mehta's e-mail address was equivalent to a fax or telex number and its position at the top of the e-mail did not under the law constitute a signature.

The judge said: "Can it sensibly be suggested that the automatically generated name and fax number of the sender of a fax on a faxed document… would constitute a signature for these purposes?"

The appeal was allowed.

WHAT THIS MEANS

Purchasers should use, when they are required to, one of the many types of acceptable electronic signatures used in business every day:

• Clicking the 'I accept' button on a website.

• A name typed onto an electronic document, eg on an e-mail.

• A biodynamic version of a manuscript signature. This is a digital version of the manuscript signature created by using a special pen and pad. The signature is then reproduced on the computer screen.

• A manuscript signature that has been scanned. Manuscript signatures can be scanned onto the computer and then converted into digital format. The digital version can then be attached to an electronic document.

For an e-mail to be legally binding under English law the party's name must be typed into the body of the e-mail (even initials or a pseudonym might be enough), in order to give, and with the intention of giving, authenticity to it, satisfying the signature requirements of the statute of frauds.

* By Paul Abbiati, legal consultant at PMMS Consulting and expert member of the EU Contract Law Project