Email negotiations leading to an enforceable guarantee


It has long been the case under English law that, in order for a contract of guarantee to be enforceable, the guarantee (or a memorandum or note of it) must be in writing and signed by the guarantor or by a person lawfully authorised by the guarantor. This requirement can be found in section 4 of the Statute of Frauds 1677 which, despite its antiquity, remains in force to this day.

In most commercial transactions, a guarantee will be either an easily identifiable stand-alone document or provided for as part of the terms of a formally executed document. However, in the recent case of Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd and another [2012] EWCA Civ 265, the Court of Appeal found that there is no reason why a guarantee whose terms are identified in a sequence of negotiating emails should not be regarded as an agreement in writing for the purposes of the Statute...

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