Signing documents during the COVID-19 pandemic
As we continue to navigate through the COVID-19 pandemic with our clients, we have been keen to make the process of signing and executing documents as straightforward as possible. With social distancing measures in place, it has (on occasion) been difficult to meet with clients for them to sign documents.
And whilst social distancing measures were relaxed on 4 July 2020 – measures in various forms may become the norm for some time yet. As a result, the use of virtual execution and e-signatures are likely to become ever more commonplace.
But what does it mean to execute a document by use of ‘virtual execution’ or ‘e-signature’? Below is a brief summary and explanation, which will make things clearer:
Generally speaking, in English law, a contract can be concluded by offer and acceptance. Strictly speaking, this doesn’t require a signature, but usually, parties to a commercial contract will sign these in order to evidence their agreement to its terms. In this situation, an electronic signature of any kind will be legally effective to conclude the contract. The general exception to this, being in relation to the execution of deeds (see below).
In relation to the execution of contracts by e-signature, The Law Commission of England and Wales summarises its views on the necessary requirements as follows:
- e-signatures are capable of being used if the person ‘signing’ intends to authenticate the document to record this (and is admissible in evidence in court proceedings)
- any formalities required under statute or instrument are satisfied (such as the signature being witnessed)
Valid e-signatures include:
- typing of a name
- clicking ‘I Accept’ or a ‘tick box’.
The following have been accepted in relation to non-electronic forms of signature, and there is no reason in principle that they couldn’t apply to e-signatures also:
- marking with an ‘X’
- typing initials only
- signing with another form of mark.
Under English law, there are statutory formalities for the execution of deeds. Foremost is the requirement of it to be signed in the presence of a witness.
The England and Wales Law Commission Statement referenced above concluded that under the current law, the requirement that a deed must be signed in the presence of a witness requires the physical presence of that witness. It is not clear whether a deed can be validly signed in the physical presence of a witness where the parties are using electronic signatures and/or an electronic signature platform, and ‘wet-ink’ signatures may still be required.
If the intention is to avoid contact with others when signing documents, this requirement for the physical presence of a witness may be problematic. If families are isolated, it may be that an adult family member could act as a witness, but for certain types of deeds, such as Wills, there is also a requirement of independence.
Finally, for certain documents, there remains a requirement to have original ‘wet-ink’ signatures, such as for documents required to be filed with the UK tax authorities or Land Registry. For these documents, an electronic signature will not be an option.
With parties increasingly in different locations (which has only been heightened by the COVID-19 pandemic), a practice of ‘virtual signing’ has evolved to avoid otherwise logistical problems in getting a document signed and parties ‘closing’ a transaction.
The decision in the case of the ‘Mercury Case’, led to the clarification of the position in English law on the use of:
- pre-signed signature pages
- closing where signature pages are exchanged by email.
Whilst the Mercury Case held that adding a signature page to a deed or using a signature page from a previous draft of the deed in a final draft would not be valid, subsequent guidance issued by the Law Society sets out a non-exhaustive range of options to facilitate signings or closings where signatories are in different locations:
Deeds (incl. contracts and guarantees)
- the final version of the deed is circulated to parties who are not able to join the physical meeting
- the absent signatory prints the signature page (or the entire deed), signs the deed and scans the signature page (or entire deed) in
- the scanned signature page (or entire deed) is sent back to the lawyer who circulated the deed, together with the final form deed
- for deeds, the signatory must confirm whether the deed is deemed to be delivered or when it is deemed delivered.
Contracts (but not deeds)
- the final version of the document is circulated to parties who are not able to join the physical meeting
- the absent signatory prints the signature page, signs it and scans it in
- the scanned signature page is sent back to the lawyer who circulated the final document, together with the written consent of the signatory to the attachment of the signature page to the final form document.
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