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Commercial: Is A Click Ever Enough?

Around Week Two of our law courses, we learned that guarantees must be in writing. This had an air of exoticism because it dated back to 1677 and an Act so old that it was a ‘Statute’; the Statute of Frauds.

The Statute was to protect the unsuspecting non-party from unwittingly being bound on a breach. The preamble explained that it was “for prevention of many fraudulent Practices which are commonly endeavoured to be upheld by Perjury and Subornation of Perjury”. Section IV insists that: “Noe Action shall be brought ... whereby to charge the Defendant upon any speciall promise to answere for the debt default or miscarriages of another person ... unlesse the Agreement upon which such Action shall be brought or some Memorandum or Note thereof shall be in Writeing and signed by the partie to be charged therewith or some other person thereunto by him lawfully authorized.”

Today’s definition of ‘writing’ includes “typing, printing, lithography, photography and other modes of representing or reproducing words in a visible form” (Interpretation Act 1978).

In Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd [2012] EWCA Civ 265, the CA determined that a number of emails read together could evidence a written agreement for the purpose of the Statute.

In Mehta v J Pereira Fernandes SA [2006] EWHC 813 (Ch), the Court found that an email may constitute notice in writing, though not if it arose on the automatic insertion of an email address. The Court in Green (Liquidator of Stealth Construct Ltd) v Ireland [2011] EWHC 1305 (Ch) found that an email address given at the end of an email could be an adequate.

In July 2016 a Joint Working Party of the Law Society produced a Practice Note on the execution of documents using an electronic signature, incorporating analysis by an anonymous QC.

Clearly there is now no requirement of ‘wet ink’. However, whether a party claiming the benefit of an ‘electronic’ guarantee has done enough to ensure that the putative guarantor has properly evidenced his intention is a matter of fact for trial. In Orange Money Ltd v Monk (2016), in the County Court at Cambridge, HHJ Moloney found that clicking a box confirming a guarantee was not enough, as the terms of the guarantee were found through several further clicks, and there had been no reference to it at earlier stages of the process. This does not mean, however, that a mere click will never be enough.

Graeme Kirk / 20th Oct 2016


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