Mehta v J Pereira Fernandes SA

For the purposes of section 4 of the Statute of Frauds, a written offer may constitute a sufficient memorandum of a guarantee where it contains the essential terms and acceptance is not disputed. The document must nevertheless be signed by the guarantor or an authorised agent. An automatically inserted email address is not, without evidence of an authenticating intention, a signature. An electronically created document may satisfy the signature requirement where the sender or agent inserts a name or other identifying material with the intention of authenticating the document.

JPF obtained summary judgment against Mr Mehta on an alleged personal guarantee of debts owed by Bedcare (UK) Ltd. The District Judge held that an email sent from an account associated with Mr Mehta constituted both the guarantee and a sufficient signature for section 4 of the Statute of Frauds.

Mr Mehta appealed. The issues were whether the email was a sufficient note or memorandum despite containing an offer made before oral acceptance, and whether the automatically displayed sender address constituted a signature.

1. The appeal was allowed and the application for summary judgment on the guarantee claim was dismissed. The alternative claim for £5,000 was not determined because no Respondent’s Notice had been filed and the District Judge had made no alternative findings.
2. Section 4 requires either the agreement itself, or a memorandum or note of an oral agreement, to be in writing and signed by the guarantor or a person authorised by the guarantor. Non-compliance makes the contract unenforceable.
3. The email was capable in principle of being a sufficient memorandum. Although it was expressed as an offer and contemplated later formal documentation, it contained the essential terms and oral acceptance by JPF was undisputed. The judge followed the reasoning in Parker v Clark [1960] 1 WLR 286, that a written offer may be a memorandum where its language shows an intention to contract rather than a mere expectation.
4. The signature requirement was not satisfied. The authorities, including Evans v Hoare [1892] 1 QB 593 and Caton v Caton (1867) LR 2 HL 127, required the name or identifying material to be intended to authenticate the instrument. The automatically inserted email address appeared incidentally and there was no evidence that it was intended as a signature.
5. The judge distinguished the issue from that considered in Elpis Maritime Company Limited v Marti Chartering Company Limited [1991] 3 WLR 330, where the document had admittedly been signed. The electronic form of a document is not itself a difficulty, but the sender’s conduct must indicate an authenticating intention to a reasonable person.

• High Court (Chancery Division): Appeal from the summary judgment of District Judge Harrison dated 9 November 2005. The appeal was allowed and the guarantee claim was dismissed.