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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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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