01 Jul Electronic Signatures: Guidance for Different Types of Legal Documents
By Isabel Agudo (Junior Associate) and Adam Paterson (Senior Associate)
Signing Standard Contracts
An electronic signature or e-signature is a paperless method of entering into an agreement which serves as a legally valid alternative to handwritten signatures. According to the Law Commission, e-signatures are capable in law of executing certain documents, as long as the intention of the signatory can be established and other requisite formalities are satisfied. The recent social distancing requirements have meant that being able to sign a soft copy of a document has become of greater utility than ever before.
Some contracts can be entered into verbally if the right criteria are fulfilled, while others come in the form of clicking “I accept” on a website. Furthermore, e-signature platforms – such as DocuSign which adheres to the UK Electronic Communications Act and Yoti Sign which is government-certified – are online tools that can sufficiently demonstrate the essentials of a binding contract. Quick and cost-effective, they capture information like a signatory’s email address, IP address, date and time of access.
However, for deeds, the position is not as simple. A key hurdle to bear in mind is that the signing of a deed must be witnessed. In other words, a deed must be signed in the presence of a witness.
Elements of Deed Formation
Legal transactions that require a deed call for more onerous formalities as follows:
– A deed must be in writing.
– It must be clear from the face of the instrument that it is intended to take effect as a deed.
– The instrument must be validly executed as a deed. This is governed by statute and varies depending on the legal personality of the executing parties. The requirement frequently involves witness attestation.
– A deed must be delivered (either physically or electronically – the point is there should be evidence of the intention to be bound).
If these are not strictly followed, the deed may be void.
Potential Video–Witnessing for Deeds
In March 2020 the Law Commission recommended an industry working group to discuss the question of witnessing deeds by video. This review has not yet taken place. The Commission makes clear that the law as it stands, pending any reforms, states that a deed must be signed in the physical presence of a witness who attests the signature – even where both the person executing the deed and the witness are attesting the document using an electronic signature.
Indeed, in the case of Yuen v Wong , the First-tier Tribunal held that the remote viewing of a deed signature via Skype did not suffice under current law. It will be interesting to monitor how these discussions evolve and see whether video-witnessing will ever be acceptable in the future.
Compliance with Current Rules
For now, physical presence of a witness remains critical to execute a deed. The Law Society’s practice note advises that if a witness genuinely observes the signing of a deed, and the witness then goes on to sign the adjacent attestation clause – whether electronically or otherwise – the deed will have been validly executed.
On the point of “genuine observation” amid the COVID-19 lockdown, wills are being signed on car bonnets and signatures are being witnessed from a safe distance. Both wet-ink signatures and electronic signatures can be physically witnessed.
At Schneider Financial Solutions, we make use of secure e-signature platforms which generate a digital audit trail for the ease and convenience of our clients. We also ensure to stay up to date with legal reforms.