At the tail
end of 2015 the High Court gave its judgment in the case of C&S Associates
UK Limited v Enterprise Insurance Company Plc. The claimant, C&S, was
a motor insurance claims handler who brought a claim for wrongful termination
against the insurance company (Enterprise) that it was handling claims
for. One important part of the overall decision was whether the contract had been validly
varied by email correspondence.
Before the
relationship between C&S and Enterprise had broken down the parties had
been getting on well. Enterprise had thanked C&S for the good work
that they were doing. There was then an exchange of emails between the
parties where C&S sought to agree an increase in its fees. The
contract, however, contained a standard variation clause that stipulated that
variations would only be effective if made in writing and signed by or on
behalf of the parties. On that basis Enterprise denied that there had
been a binding variation to the contract as the parties had not signed any
agreement to vary the fees.
Upon
considering the emails in question the court decided the variation was
effective. The emails had either been ‘signed’ by a standard email
signature or with a brief sign off such as “Many thanks, much appreciated.
Mike.”
When
negotiating a change of terms of a contract, as long as the other formalities
required for a binding contract are in place, email signatures can suffice even
if there is a variation clause in the original contract requiring variations to
be signed. In situations such as these parties must be cautious in their
wording to prevent being bound.
At the tail
end of 2015 the High Court gave its judgment in the case of C&S Associates
UK Limited v Enterprise Insurance Company Plc. The claimant, C&S, was
a motor insurance claims handler who brought a claim for wrongful termination
against the insurance company (Enterprise) that it was handling claims
for. One important part of the overall decision was whether the contract had been validly
varied by email correspondence.