Guarantees by email? You might be wondering if I’m about to talk about another use of modern technology, a new app maybe? You may think that a guarantee has to be a formal document, signed and witnessed by all concerned - not necessarily with a big red wax seal to make it valid, but something along those lines. Well, welcome to the twenty-first century way of giving a guarantee.
A recent case which went as far as the Court of Appeal has confirmed that a guarantee can be entered into as a result of exchanges of emails. What had happened in that case was that the parties had been discussing the terms of a guarantee document. They reached agreement and intended a formal document to be drawn up for them to execute. That didn’t happen, but the court’s decision in the case was they had in fact entered into the guarantee as a result of their negations by email.
But what might surprise you even more is that this decision is possible due to a law from the era of quill pens and those red wax seals. The law in question has the rather bizarre title of the Statute of Frauds which dates back to 1677! That law requires a guarantee to be an agreement in writing, but that does not mean that the agreement has to be in a single document. The parties to the negotiations showed by their email correspondence that they intended to be bound by the terms they agreed and their names on the emails were sufficient to amount to the required signature.
Modern lawmakers struggle to keep up with the swift pace of technological development, so it seems our forebears have achieved something that our legislators can generally only aspire to with their law over three hundred years ago still having an impact today. The lesson to be learned from this is that when using emails in a business negotiation you need to make sure that you check that you really are happy with what you’ve said in your email before you send it and, if you are discussing something about which you would normally want to take legal advice, then go and get that advice before it’s too late and you find you have committed to it anyway. Sue Mann
Commercial Solicitor, Birmingham
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.