The Court of Appeal has confirmed that an enforceable guarantee can be created by a series of e-mails. In the case of Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd and another EWCA Civ 265 (09 March 2012), the parties exchanged a series of e-mails in which they agreed a number of terms which were then to be incorporated into a full and complete written agreement, however, this agreement was never signed.
The Court of Appeal has decided that:
• The Statute of Frauds 1677 does not require an "agreement in writing" to be in the form of a single document;
• A series of emails negotiating the terms and properly signed would constitute a guarantee, provided that the parties intended to be bound by the agreement, even if the parties intended to sign a formal document; and
• If a person puts his name (whether this is merely his first name, initials or even a nickname) on an e-mail to indicate that it comes with his authority and he takes responsibility for its contents, it will constitute a signature for the purposes of the Statute of Frauds 1677.
This case is a clear warning that any written negotiations should always be marked as being "subject to contract" if the parties do not intend to be bound prior to a formal document being executed.
For information or advice regarding commercial agreements, contact Rebecca Robinson on 0114 266 6660 or email [email protected].
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