The vast majority of B2B written contracts contain a variation clause that says something along the lines that any variation must be in writing and signed, which historically emails were not strictly included. However, the High Court has said in the recent case of C&S Associates v Enterprise Insurance that a fairly informal exchange of emails with a signature block will be sufficient to be a contractually binding variation in writing and signed.
In that case the judge held that a fairly informal exchange of emails where an email by one party included an email autosignature and the other party simply replied with “Many thanks Myles, much appreciated. Mike”.
Given the importance and frequency of emails in business communication this interpretation increases the risk that formal written contracts between businesses can be easily and unintentionally varied by way of an informal exchange of emails.
A standard no variation clause would be:
“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”
That is potentially safe so long as you include within the Interpretations section of the contract:
“A reference to writing does not include email”
It would also be prudent that your variation clause requires the signature to be that of a statutory director and not simply by an employee with the word ‘director’ within their outward facing job title.
It is always important that your contracts are drafted carefully, but this case highlights how that applies more than ever and that contracts are constantly under review to ensure that they take into account the effect of the rapidly changing way that business in the real world is conducted on a day to day basis.
