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Contracting by Email Without Legal Advice Can Be Hazardous

The dangers of concluding contracts by email, without taking legal advice, were only too plain when a businessman was found personally liable for his company’s debts. However, he was granted a reprieve by the Court of Appeal after presenting fresh evidence that emails attributed to him were forgeries.

Following a 23-day trial, the businessman was found to have personally guaranteed debts owed by his company (company A) to company B. The latter successfully argued that, in an exchange of four emails, the businessman had agreed to stand behind company A and that he was thus bound to pay its debts, which came to more than £230,000. He was also ordered to pay £370,000 in legal costs.

In challenging that decision, the businessman insisted that the purported email exchange had never happened. There was no electronic record of such traffic and forging paper copies of the emails would have been ‘childishly easy’. He presented fresh evidence from a data recovery expert which indicated that it was implausible that he had sent or received any of the emails.

The Court had no doubt that it was an appropriate case in which to admit the fresh evidence and allowed the businessman’s appeal. The case was remitted to the County Court for a complete re-hearing.