Online Estate Agents: Law firm highlights new risk after recent ruling

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People using online estate agents could risk buying or selling a property by accident through unwittingly authenticating a contract using an email signature block, warns a leading law firm.

The warning follows a recent case where a judge ruled a signature formed part of a legally-binding contract, costing a land seller £25,000 of the hoped-for sale price.

Zoe Stollard from Clarke Willmott LLP who have offices in Cardiff says the case has set a precedent that could have an impact on sellers and buyers who deal with each other directly.

“Personal email signature blocks are becoming more and more popular as people seek to brand themselves and to create more of an online presence.

“However, if you’re buying or selling your home online – as more and more people are opting to do – people should be aware of the perils of inadvertently signing a contract.

“If you use an online estate agent, you’re likely to be showing prospective buyers around yourself and both parties may well go on to communicate with each other via email.

“But they could find they’ve authenticated a contract by mistake – say for instance if they stated they wanted to buy the property at one point, and later changed their mind.”

In Neocleous & Anor v Rees, the case concerned a dispute between neighbours over a right of way which was the only method of land access to part of the defendant’s property.

His Honour Judge Pearce said the presence of the sender’s name on the email – even if it was automatically generated – showed he had a ‘clear intention’ to associate himself with and authenticate it.

He ruled that ‘the presence of the name indicates a clear intention to associate oneself with the email – to authenticate it or to sign it’.

Zoe says in practice this means that terms or amendments to contracts which are agreed in open email correspondence can now be binding if they contain email signatures, even if hard copies of the relevant documents are not subsequently issued.

“The case could well set a precedent and as law catches up with technology,” she added.

“While the ruling shows progressive movement into allowing parties to create binding contracts without the need to circulate printed ink contracts, it also serves as a warning and sends a message of ‘sender beware’.”

Zoe says all emails which contain terms or amendments to contracts should be pre-empted with “Subject to Contract” or “Without Prejudice” or other similar wording to demonstrate that the contents of the email are not intended to be binding to avoid the possibility of inadvertently creating an enforceable contract.

Zoe Stollard is a partner in Clarke Willmott’s construction team specialising in non-contentious advice to various stakeholders on a variety of public and private, domestic and international projects.

Clarke Willmott LLP is a national law firm with seven offices across the country in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.

For more information visit www.clarkewillmott.com