Guarantee By Email Exchange

In its recent decision in Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd and another¹ , the Court of Appeal confirmed the High Court's ruling that an exchange of emails can create an enforceable guarantee.

Background

A guarantee, like any other contract, must satisfy the basic legal requirements for the creation of a contract. These are:

1. offer,
2. acceptance,
3. intention to create legal relations, and
4. consideration.

In addition, in relation to guarantees, section 4 of the Statute of Frauds 1677 provides that in order for a guarantee to be enforceable it (or alternatively some memorandum or note of the guarantee) must be both:

1. in writing, and
2. signed by the guarantor or a person authorised by the guarantor.