As we enter into the new reality of working from home and conducting business remotely as a result of Covid-19, many businesses will no longer be able to sign documents in person and will instead have to do so electronically. In this article, we examine how to sign and execute documents electronically by avoiding potential practical and technical issues.
Possible signing methods
In line with Government social distancing advice, it is clear that no physical signing meetings should take place. There are, however, several alternative avenues to take during the times of Covid-19:
Scanned signature pages
So-called Mercury-compliant signings can be arranged by printing the document pages, physically signing them and then scanning and sending the pages by email.
Although official Law Commission guidance refers to using a scanner to capture PDF images of the signed document, signatories should also be able to use cameras or scanner software on mobile phones to capture the signed document.
Possible restriction: the lack of an industrial-sized fast printer with scanning functionality (or any printer at all) when having to sign very long documents.
Electronic signatures
A simple electronic signature can be used by simply typing, inserting an image of or writing the signature with a stylus into the document, which can then be emailed to other signatories.
E-signature platforms such as DocuSign provide a similar alternative by allowing parties to digitally sign a single document through digital encryption technology. The security and GDPR compliance of any chosen platform should be considered.
Powers of attorney
Persons granted powers of attorney can sign documents on a party’s behalf. Though this may be unhelpful, as powers of attorney documents themselves must be executed as deeds in order to become valid.
Posting documents
Documents can still be physically signed and sent to other signatories or recipients by post, subject to postal services and couriers continuing to operate in case of any changes to UK’s lockdown measures.
Contracts and deeds
Except for some documents to which additional requirements may apply (see Further possible restrictions below), the vast majority of ordinary commercial contracts can be validly executed by electronic signatures under English law. This includes contracts that are legally required to be ‘in writing’ or ‘signed’, such as those dealing with trust interests.In terms of deeds, Law Commission guidance also confirms that both (i) the person signing the deed (i.e., executing it) and (ii) the witness attesting to him doing so can equally use electronic signatures to do so in the deed. However, the witness must still witness the signing in person (see below).
Witnessing the signing of a document remotely
Deeds and many other documents must be signed “in the presence of a witness”. Unfortunately, there is currently no authority on whether ‘remote’ modes of witnessing would be considered valid (for instance, over Skype or Zoom). Although the Government has in March 2020 indicated that it is willing to introduce remote witnessing in the future, it has not stated whether it is planning to do so as part of its emergency legislation addressing Covid-19. Witnessing documents in such a remote way is, therefore, currently not advisable.Even in the current Covid-19 lockdown, the witness must be physically present when the signatory signs the document. Parties may, therefore, need to look for pragmatic and practical approaches to arranging for execution, having the following considerations in mind:
- Parties should be properly advised on whether a deed, rather than a simple contract, is strictly necessary.
- If your witness is from outside your household, he or she should stand two meters away from the signing party. Since witnesses can attest to signatures electronically, they need not use the same device or physical document, thereby remaining at a safe distance.
- Since witnesses must be independent, they should ideally not be a relative or family member for evidential reasons. However, it is legally acceptable to have an adult family or household member act as a witness, as long as they are not a party to the document. Given the current situation, this would be a workable solution.
- If you are using an e-signing platform, it is important to check its witnessing functionality and plan the most practical ways to arrange the process in advance.
Further possible restrictions
As seen above, although many documents can indeed be signed electronically, there are circumstances in which “wet ink” signatures may still be required. The most common ones include:
- Cross-border elements: the document is not governed by English law, may need to be enforced outside the UK or one of the parties is based in another jurisdiction. Although a physically signed document is likely to be treated as valid overseas, signatories should seek local law advice on any additional formality requirements (e.g., notarisation).
- Registration or regulatory body requirements: the document needs to be filed or registered with a governmental body or registry (e.g., the Land Registry).
- English law formalities: depending on the type of document, additional formality requirements may apply under statute, regulations or common law.
- Authority restrictions: the signatory must have legal authority to apply that party’s signature to the document. Where the party is a company, it is advised to check (i) for relevant restrictions in its constitutional documents and (ii) that the authorised signatory applies their signature personally, without delegating this task to someone else.
Overall, English law is fairly pragmatic and makes it easy to validly execute ordinary commercial contracts by using electronic signatures. However, whether a contract or other document has been properly signed can have a great impact on its validity and enforceability. We therefore recommend that, if you think your document may be subject to the above mentioned additional restrictions or have cross-border elements, get in touch by emailing us on info@barnes-law.co.uk.
