At a time where contracts are almost invariably negotiated by email and fax, the recent case of Thomas Park and another for partial recall of an inhibition raises some interesting issues for the conclusion of missives by electronic means in Scotland.
The case considered whether missives had been concluded prior to the point at which an inhibition affecting sellers (of the tenant’s interest in a long lease) became effective. The inhibition was deemed effective at midnight on 31 August 2007. A qualified acceptance and concluding letter were exchanged by fax on 31 August and the originals were also posted (by Legal Post) on the same day.
It was held that, as the postal rule (that an acceptance sent by post is deemed to have effect when posted) only applies to the acceptance of a contractual offer, it could not apply to the posting of the qualified acceptance. (i.e., the postal rule only applies to the final acceptance.)
With regard to the faxed copies, the general principle is that delivery of missives is required and, as the sender of a fax retains the ability to change its mind and not deliver the principal, the faxes were also insufficient for conclusion of missives on 31 August.
Temporary Judge, MG Thomson, QC suggested that specific agreement between the solicitors or a general practice amongst solicitors would bar the parties from failing to deliver the principal. However, he found that there was no agreement between the parties in this case and also that there is no general practice amongst solicitors of treating the delivery of faxed copy missives as precluding a later departure from their terms.
The result of the case is that solicitors who wish to conclude missives by electronic means must either come to a specific agreement to that effect in each case or invest in technology enabling the use of electronic signatures.
However, it is worth noting that the issue only arose in this case as a result of the particular timings of the inhibition and conclusion of missives; facts that are unlikely to arise with any frequency in the future.