Use of electronic signatures

The use of e-signatures is now built into day-to-day work for many organisations.

Rebecca Robinson, director in the company commercial team at Wake Smith Solicitors, sets out guidance for anyone needing to sign a contract who is unable to be there in person.

This article covers:

• How can I sign a contract when I can’t be there in person?
• Does a remote/electronic signature validly execute a contract?
• When might signing remotely be unsuitable?
• If I am signing electronically does the other party have to sign electronically?
• Your next move?

 

How can I sign a contract when I can’t be there in person?

It is possible to sign contracts remotely by signing a hard-copy contract in ‘wet-ink’, scanning it and emailing it, or by using an electronic signature.

Examples of electronic signatures include:

• Typing your name where a signature is required;
• Scanning your handwritten signature and attaching it onto an electronic document;
• Signing your signature onto a document using a touchscreen device; and
• Using an e-signing platform, such as Adobe Sign or DocuSign.

Does a remote/electronic signature validly execute a contract?

As contracts formed in England and Wales are not legally required to be in any particular form, both remotely signing and using an electronic signature will be valid in most circumstances.

The Law Commission has confirmed the validity of electronic signatures, subject to two fundamental caveats:

• the person signing must intend to sign and be bound by the terms of the document; and
• any execution formalities must be satisfied i.e. witnessing formalities.

The Law Commission also confirmed if a signature in a document is required to be witnessed, the witnesses must always be physically present to witness the signing, even when documents are remotely/electronically executed, and suggested three ways to do this:

• witnessing through a window, with the window open or closed;
• at a distance; or
• in an outside public space maintaining social distancing.

Unfortunately, if there is a witnessing requirement for the document you wish to remotely/electronically sign and you are unable to comply, a remote or electronic signature would not be legally valid.

When might signing remotely be unsuitable?

Here is a non-exhaustive list of examples where remotely/electronically signing might be unsuitable:

• Signing on behalf of a company: If you are signing on behalf of a company it is important to check the company’s constitutional documents (i.e. Articles of Association) to see if there are any restrictions on using electronic signatures.
• Registration requirements: If the document needs to be registered after execution and the public registry only accepts wet-ink signatures, an electronic signature will not be suitable.
• Witnessing requirements: If the document requires a witness to your signature, any remote/electronic signature will not be valid unless the witness is physically present to witness your signature.
• Cross-border transactions: This guidance relates to the law of England and Wales. If you are contracting with a party outside of this jurisdiction you should seek advice from local counsel to ensure that any contracts or deeds executed remotely/electronically are valid.

If I am signing electronically does the other party have to sign electronically?

It has been confirmed by the Law Society 2016 Practice Note that a contract may be signed by one or more parties using an electronic signature and other parties signing in wet-ink.

Your next move?

For further information on company commercial legal matters please contact Rebecca Robinson at Wake Smith Solicitors on 0114 224 2007 or email [email protected]

Click to find out more about our Company Commercial services

Posted 12/12/23