How businesses can protect electronic signatures

Electronic signatures automatically generated at the bottom of e-mails can bind businesses to contracts. Although the law remains subject to change, a recent court ruling and separate report by the Law Commission in England and Wales highlight how e-mails are no longer as informal as they used to be. In an analysis on the Pinsent Masons site, Laura McCrea notes that businesses worried that automated e-mail signatures might be interpreted as their agreement to a contract can take steps to address that risk. ‘They include notifying parties in a negotiation who is authorised to enter into contracts on their behalf, and inserting the words “subject to contract” into the body of e-mails which concern contract terms and their negotiation. Over the years, courts in England and Wales have been asked to consider questions concerning the enforceability of e-mails. In 2006, for example, the High Court found that the presence of a sender's e-mail address in the header of an e-mail does not amount to a signature. It said, though, that a typed name would have been sufficient to form a binding contract.’