Contract can lie in email threads or multiple emails

I am, on the whole, fortunate in the judgments which I have to read. Most of them involve procedural failures and breaches of what are, frankly, fairly straightforward obligations. You do not have to be a lawyer or a technologist (let alone both) to understand the provisions of Part 31 of the Civil Procedure Rules and its practice directions, nor the US equivalents. I quoted with approval the assertion by Allison Stanton, eDiscovery Counsel at the US Department of Justice  that “[Her] 5-year-old can tell by page 3 of an opinion that it is going to end in sanctions” (see Compare and Contrast: US and UK attitudes to Preservation Sanctions).

That is not, of course, to say that electronic disclosure / electronic discovery is easy, nor to suggest that there is no room for fundamental disagreement about the application of the rules and precedent to any particular case. The law itself, however, is pretty straightforward.

The same cannot be said for the matters which came before the Court of Appeal in Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd & Anor [2012] EWCA Civ 265 (09 March 2012) which addresses multiple matters of the law governing commercial contracts which, separately and together, explain why the commercial bar attracts some of the highest intellects. The central issue, however, and the reason why HHJ Simon Brown QC sent it to me, appears in the opening paragraph, which reads as follows:

The principal question which falls for decision in this case is whether a contract of guarantee is enforceable where contained not in a single document signed by the guarantor but in a series of documents duly authenticated by the signature of the guarantor. It is common in commercial transactions for a contract of guarantee to be contained in a single document, and it is no doubt convenient that a guarantee should be evidenced in this way. The question however which arises in this appeal is whether it must. Christopher Clarke J, in the Commercial Court, held that it need not – [2011] EWHC 56 (Comm); [2011]  1  WLR 2575. He held that an enforceable contract of guarantee may indeed be found in a properly authenticated series of documents. His decision is said to have been unorthodox and contrary to the understanding of commercial men. It is said to have caused alarm.

There are long diversions on the way to the answer to this, all of them doubtless necessary for the conclusion, and most of them irrelevant to those whose work involves only the management of electronic documents for litigation. This is not, in other words, an eDisclosure / eDiscovery case, but it earns its place here because modern commercial communication is becoming increasingly fragmented, no longer depending on the neat exchange of counterpart documents signed with a pen. The case is also important because it shows the court ensuring as best it can that justice reflects the way people actually conduct business.

The answer, on the facts of this case at least, is that an enforceable contract can subsist in multiple sources. I quote the relevant paragraph, paragraph 22, in full, though I have broken it up into more readable sections:

The conclusion of commercial contracts, particularly charterparties, by an exchange of emails, once telexes or faxes, in which the terms agreed early on are not repeated verbatim later in the exchanges, is entirely commonplace. It causes no difficulty whatever in the parties knowing at exactly what point they have undertaken a binding obligation and upon what terms. As Mr Young pointed out, it is often a matter of happenstance, or, metaphorically, the pressing of a button, whether a sequence of emails manifests itself in a single document as a thread or string of emails or in a series of individual documents.

We were much pressed by Mr Kendrick with the prospect, which he invited us to regard as inimical to the purpose of the Statute, of it being satisfied by an educated trawl through a lever arch file of email exchanges. This was always a forensic exaggeration, but on the facts of this case the spectre invoked by Mr Kendrick is simply absent. All of the terms of the charterparty, and of the guarantee, are to be found in the email dated 2 February 2008 but in fact sent by Mr Hindley to Mr Hintz on 4 February 2008. That was subject only to agreeing mutually acceptable terms on the MOA. The relevant email thread of 21 February 2008, B106-108, occupies two and a half pages of A4 paper. In it is to be found clear agreement on the terms of the MOA and, additionally, agreement that one of the provisions agreed in that context, the “Additional Clause”, should in point of form be put rather into the charterparty where it more appropriately belonged than in the MOA.

If I have correctly understood the nature of the email string or thread at B106-108, the exercise of ascertaining that a guarantee has been agreed in writing and discovering its terms involves reference to only two documents, the document at B106-108 and the email of 2 February 2008 sent on 4 February 2008. I can see no reason why the contract of guarantee so identified should not be regarded as an agreement in writing for the purposes of the Statute. For the avoidance of doubt however my conclusion is not dependent upon the circumstance that, as it happens, it is here necessary to look at only two documents. Subject to the requirement of signature to which I shall return, I can see no objection in principle to reference to a sequence of negotiating emails or other documents of the sort which is commonplace in ship chartering and ship sale and purchase.

Whether the pattern of contract negotiation and formation habitually adopted in other areas of commercial life presents difficulty in adoption of the same approach must await examination when the problem arises. Nothing I have said is intended to discourage the obviously sensible practice of incorporating a guarantee either in a readily identifiable self-standing document or otherwise providing for it as part of the terms of a formally executed document. The Statute must however, if possible, be construed in a manner which accommodates accepted contemporary business practice. The present case is not concerned with prescribing best or prudent practice. It is concerned with ensuring, so far as is possible, that the adoption of usual and accepted practice cannot be used as a vehicle for injustice by permitting parties to break promises which are supported by consideration and upon which reliance has been placed.


About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in Discovery, eDisclosure, eDiscovery, Electronic disclosure. Bookmark the permalink.

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