Automatically generated electronic signature satisfied requirements of section 2

Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires contracts for the disposition of interests in land to be made in writing and to be signed by or on behalf of the parties. But what constitutes a signature? Will an electronic signature suffice? Or must the parties place “wet ink” signatures on such contracts? Neocleous v Rees [2019] EWHC 2462 (Ch) [2019]; PLSCS 189 appears to answer this question for us. The parties had been engaged in litigation about a right of way, before settling their dispute at the doors of the court. Under the settlement agreement, the owners of the servient land agreed to acquire the dominant land, and the right of way, for £175,000. The arrangement was made and confirmed in an e-mail string that bore the names of the solicitors acting for the parties, which were inserted at the end of their respective e-mails. The buyers put their solicitors in possession of the funds required to complete the purchase. But the seller asked the court to restore the proceedings to the list. So the buyers sought an order for specific performance of the settlement agreement, claiming that the e-mail string constituted a written document, which had been signed by or on behalf of both parties, and that the requirements laid down in section 2 had been satisfied. The seller relied on the fact that that the signature in her solicitor’s e-mail setting out the terms that the parties had agreed – which were acknowledged and accepted by the buyers’ solicitor – had been automatically generated and claimed that it was not a valid signature for the purposes of section 2. She conceded that a document may be treated as “signed” where an electronic facsimile of a person’s handwritten signature, created by scanning a wet-ink signature, is incorporated in a document. However, such a signature would resemble the signature of the person signing the document and would have been inserted in the document by the decision and action of the person inserting it, as opposed to having been automatically generated and inserted into an e-mail. But the court upheld the buyers’ claim. The judge considered the name and contact address that appeared at the top of the e-mail in Firstpost Homes Ltd v Johnson [1996] 1 EGLR 175, which is often cited as confirmation of the need for a wet-ink signature, and contrasted them with the name and contact details that appeared at the bottom of the seller’s solicitors’ e-mail in this case, in the conventional style of a signature at the end of the document. The judge noted that the ordinary usage of words has a tendency to develop and held that the meaning ascribed to the word “signature” should not be circumscribed by the past. In his view, the soundest test of whether something constitutes a “signature” was laid down in J Pereira Fernandes SA v Mehta [2006] 1 WLR 1543 and was adopted by the Law Commission in its Report on the Electronic Execution of Documents: was the signatory’s name applied to the document with authenticating intent? The sender’s name appeared in the e-mail in this case due to a conscious decision establishing a general rule that applied to all e-mails. The sender knew that his name would appear in, and had intended it to be associated with, the contents of his e-mail. So the buyers were entitled to an order for specific performance of the settlement agreement. Allyson Colby, property law consultant