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Legal insight

Legal insight

Glaister Ennor's IT partner Kim Gordon sheds some light on your legal dilemmas

Can you rely on an electronic signature in an email? Unfortunately for those of you out there looking for commercial certainty (most of you I would venture), the answer is that it depends. Can you rely on an electronic signature in an email? Unfortunately for those of you out there looking for commercial certainty (most of you I would venture), the answer is that it depends.

Given there is no “law of signatures” in New Zealand, we have to look to legislation and common law to determine the enforceability of a signature contained in an email.

At a common sense level, the reliance I would place on an email from a company director providing a personal guarantee would be different to the level of reliance I would place on an email from a procurement manager placing their weekly product order.

A recent English case highlights the difficulties in this area. In Mehta v J Pereira Fernandes SA, Mr Mehta, a company director, had a member of his staff send an email offering a personal guarantee in an attempt to delay a winding up petition.

The email was not signed by Mehta but contained his email address Nelmehta@aol.com in the header of the email. This same email address appeared on other email sent to the recipient previously but those email had included Mehta’s name in the body of the email.

The email in which Mehta offered a personal guarantee did not include his name anywhere other than in the header. The question for the court was whether the guarantee was enforceable against Mehta. One of the issues on which this question turned was whether an automatically inserted email was address sufficient to constitute a signature.

Given the context of this being a guarantee, the guarantee was held to be unenforceable against Mehta due to the fact that his email address was only found in the email incidentally, i.e. it was not intended as a signature and therefore could not be relied upon as such. This makes sense in the context of guarantees.

Guarantee would have been enforceable

It would appear that if Mehta’s name had been typed into the email, either by Mehta himself or by his assistant acting under his direction, the guarantee would have been enforceable.

I question whether this is a satisfactory outcome given the common practice of automatically inserting names at the end of email? Often it is clear that these are automatically inserted “signatures” as they are stylised and include contact details but just as often the sender’s name or initials appear at the end of an email and it is impossible for the recipient to know whether they were typed in or automatically inserted.

It is interesting that in the Mehta case, the court regarded the email address in the header as being the equivalent of an automatically generated name and fax number of the sender of a fax. Is this a valid analogy given the difference between

a fax machine and a personal email account?

Stepping back, usually an email on its own will be sufficient to rely upon, except where there are specific legal requirements for a signature such as guarantees and in transactions relating to land. Although it may still be common practice to look beyond an email to confirm a promise, approval or representation, this will become less and less the case as email use continues to grow.

Looking to the law, in New Zealand the Electronic Transactions Act 2002 defines an electronic signature to be any method that is used to identify a person and to indicate that person’s approval of that information.

The Act states that any legal requirement for a signature (other than a witness’ signature) can be met by an electronic signature if the electronic signature adequately identifies the signatory, adequately indicates the signatory’s approval of the information to which the signature relates, and is as reliable as is appropriate given the purpose for which, and the circumstances in which, the signature is required. So, when considering email communication, the key is to consider the purpose and circumstances in which the signature is required.

Kim Gordon has been involved in the IT industry for more than 15 years. Her legal experience is enhanced by her background in IT management, including a role in vendor management with Macquarie Bank in Sydney. She can be reached at 09 356 8247 or kim.gordon@glaisterennor.co.nz

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