Mona Patel Partner
Lockdown 3: Electronic signatures and virtual execution
This is an update to our March 2020 article on electronic signatures following the Law Society’s recent guidance on how English law governed contracts can be signed using electronic signatures (“e-signatures”).
What is an e-signature?
In a commercial context an e-signature is often considered to mean a “wet-ink” signature scanned and sent by email. It can however take many forms including, a person electronically pasting their signature into a document, a name typed at the bottom of an email containing the terms of the contract or a signature using secure e-signing software (e.g. Docusign and Adobe Sign).
Are e-signed documents legally binding?
In most cases, yes, provided there is an intention to authenticate the document and formalities are satisfied. The Law Society’s guidance provides that certain types of e-signature are considered evidentially stronger than others (e.g. the use of e-signing software).
However the requirements for the specific document being signed should be discussed with a legal professional and there are also practical issues to consider for the signing of deeds (see below).
Can deeds be witnessed virtually (e.g. by video link)?
A deed must be signed “in the presence” of a witness. It is generally considered that this requires the physical presence of a witness when a deed is signed (i.e. they must be in the same place).
From an e-signing perspective, a deed signed with a witness present and attested by “wet–ink” (which is then scanned and emailed as a whole document) or using an e-signing platform (where a signatory signs a deed and a witness attests it) would be legally binding. Case law is not clear on whether it is sufficient for the signing of a deed to be “virtually witnessed” (e.g. via Skype, Facetime or WhatsApp). Given the uncertainty we would suggest you avoid executing deeds where a witness is not in the physical presence of the signatory.
What if we are social distancing?
In respect of documents that needs witnessing, the Law Society’s guidance provides that where "individuals are required to socially distance, in order to comply with the requirement for a witness to be physically present, consider witnessing through a window (whether open or closed) or at a distance or in an outside public space. So long as the witness is physically present and able to see the signatory sign the document, these are all valid forms of witnessing.”
Who can be my witness?
It is best practice for a witness to be independent of a signatory, however in times of restricted movement it should be possible for family members/cohabitees to act as witnesses provided:
- they are not a party to the document
- they are not named as being someone in whose favour an obligation is to be performed
- the document itself does not specifically require the witness to be an independent person
- they do not benefit from the document (ideally)
It is worth bearing in mind that the reliability of the evidence presented by a witness may be diminished if the person is closely related and/or is a minor. In selecting a witness be sure to identify a person whose evidence may be relied on if the deed is challenged.
Can someone else apply my signature for me?
Not for a deed. As regards other contracts, the Law Society’s guidance provides that it is best practice “for the person with the authority to sign to apply their e-signature personally, unless they have an express power to sub-delegate and give appropriate authority to the individual who will be applying the e-signature.”
Can a combination of e-signatures be used?
What else should we consider when e-signing documents?
- Agree protocols and procedures around remote signing in advance.
- Whether the constitutional documents of a legal entity contain signature requirements e.g. restrictions on the use of e-signature and the signatories that have the power/authority to bind the company.
- Whether any documents could be signed as contracts rather than deeds as this would negate the need for witnessing. For example, where the consideration is readily identifiable or, for a company with two or more officers, by having two directors execute the deed instead (or a director and the company secretary).
- That the e-signing system used provides a reasonable level of assurance that the document was executed by the signatory (for evidentiary purposes). Signing platforms tend to provide a certificate with information collected. If you or your lawyers are not co-ordinating signing you should ensure a copy is requested and sent to you.
- Whether clauses could be inserted into contracts recognising the parties’ intention to be bound by an e-signature.
- It is good practice for parties to agree whether or not the intention is to produce hard copy originals by printing out "soft copy" originals.
The above does not constitute legal advice nor does it consider a complete list of issues to consider in the context of COVID-19. Should you have any queries, please do not hesitate to contact the authors of this article or your usual contact at Ince.