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An informal exchange of emails can constitute a variation of terms of a contract even when the contract states that any variation must be in writing with the signed agreement of both parties.

In the case of C&S Associates UK Limited v Enterprise Insurance Company PLC the High Court held that an informal exchange of emails can constitute a variation of terms of a contract even where a contract term provided for variation to be in writing and signed by or on behalf of both parties.

In this case the claimant handled motor insurance claims for the defendant. The contract was terminated by the defendant on the basis of breach of contract and the claimant brought a claim for wrongful termination of the contract. The main issues in dispute related to the question of breach of contract and the variation of the contract.

The relevant contract clause stated: “Any variation of this Agreement shall not be effective unless made in writing and signed by or on behalf of each of the Parties to this Agreement.”

The Court held that the requirement for a signature was satisfied by an electronic signature and that it did not require paper documents or both parties’ signatures on the same document. The Court also concluded that signature blocks on emails did satisfy the terms of the clause providing that other requirements of contract formation and variation (such as intention to create legal relations) were also present.

The Court took the position that the parties did intend to be bound by the exchange of emails, even though they also intended to record the agreement in a formal contract.

Courtesey of Abbey Legal