Email correspondence can be contractually binding: Lessons from UBA Kenya Bank Limited v. Top Image Africa Limited

Introduction

In the evolving landscape of commercial transactions, email correspondence has increasingly played a critical role in shaping contractual obligations. The recent High Court of Kenya ruling in UBA Kenya Bank Limited v. Top Image Africa Limited (Civil Appeal E162 of 2022) [2025] KEHC 254 (KLR) underscores the possible enforceability of agreements made via email. The case revolved around a forex exchange transaction where the respondent alleged financial losses due to a misrepresented exchange rate. One of the key determinations made by the court was that agreements reached through email exchanges constituted a legally binding contract.

Background of the Case

The dispute originated when Top Image Africa Limited sought to convert Nigerian Naira (NGN) into Kenyan Shillings (KES) through UBA Kenya Bank Limited. Between February 9, 2018, and March 26, 2018, both parties engaged in discussions regarding the applicable exchange rate. The respondent alleged that it was misled into believing the exchange rate was 0.18 instead of 1.18, leading to a financial loss of Kshs 12,300,000. The appellant, however, maintained that the respondent had explicitly agreed to the exchange rate through email communication.

The trial court initially ruled in favour of the respondent, stating that UBA Bank had withheld critical information regarding exchange rates and thus owed a duty of care. However, the High Court overturned this decision on appeal, emphasizing that email correspondence between the parties constituted a legally binding agreement.

Legal Issues and the Role of Email Correspondence

The core legal issue before the court was:

• Whether email correspondence in which parties agreed on an exchange rate constituted a binding contract.

The High Court analysed this issue by considering contract formation principles, particularly:

• Offer and acceptance – The exchange rate was proposed by the bank and accepted by the respondent via email.
• Consideration – The respondent authorised the forex transaction based on the agreed-upon rate.
• Meeting of minds– Both parties corresponded and affirmed the terms through email.

Based on these elements, the High Court ruled that email communications confirming the agreed-upon exchange rate formed a contract between the parties.

Precedents and Legal Reasoning

In delivering the ruling, the court relied on several legal precedents and principles of contract law, reinforcing that:

• A contract is enforceable if there is a clear intention to create legal relations, even if concluded via email.
• Parties are bound by their agreements unless vitiating factors like coercion, fraud, or undue influence are established.
• Courts cannot rewrite a contract unless legal grounds for invalidation exist.

The High Court cited the National Bank of Kenya Ltd v. Pipeplastic Samkolit (K) Ltd (2002) 2 EA 503, affirming that “a court of law cannot rewrite a contract between parties.” This meant that since no fraud or misrepresentation was established, both UBA Bank and Top Image Africa Limited were bound by their email agreement.

Implications of the Ruling

1. Email correspondence can be binding: This ruling reinforces the growing legal recognition of emails as enforceable contractual terms, aligning with global contract law principles.
2. Businesses Must Exercise Caution in Email Communications: Parties engaging in commercial transactions should be aware that emails confirming terms, rates, or obligations may be legally binding.
3. Burden of Proof in Commercial Disputes: The case also underscores the importance of providing admissible evidence, especially regarding agreed-upon terms in financial transactions.
4. Legal Duty to Disclose Material Information: Businesses should maintain transparent communication regarding key terms like exchange rates to avoid future disputes.