Covid-19: Remote Execution and e-Signatures in the UK

With the Coronavirus (COVID-19) pandemic making remote working the new normal, many questions have arisen relating to how specific tasks can be performed – specifically, tasks which require witnesses, or otherwise the presence of another party.

e-signatures

These discussions have involved how it might be possible to execute documents remotely, as well as whether or not it is legally possible to execute documents using an electronic signature. As we will see, this can depend on several factors. Most specifically, what kind of document it is, and what form of the electronic signature it is that will be used.

Let us dive deeper into the types of documents that typically need executing with a witness, and whether it might be possible to do these remotely.

What does the law say?

English law states that these elements must be in place for a binding contract to be created. These are the offer, acceptance, consideration, the intention to create legal relations, and the certainty of terms.

The law does not state the type of technology that must be used to secure these elements. Therefore, as long as each criterion is met, then it should be possible to create a legally binding contract remotely.

Standard Contracts

With simple contracts, there is no given particular form that they must take to be entered into. Even an oral agreement can be considered a legitimate simple contract. As long as the criteria we mentioned above are all met, then there will be no issue.

This means that an electronic signature is perfectly useable to bind the contract between two parties.

Deeds

Many transactions require a deed to be executed before they can take effect. Some criteria must be met that are much more strict than for standard contracts. For example, a deed must be in writing – oral agreements do not qualify. It must be clear from the document that it is intended to be treated as a deed. The deed must also be delivered to each party.

The Execution of a Deed

Once these criteria have been met, the deed can then be executed. Similarly, there are stringent rules as to how this can be legally done.

For example, a deed can only be executed once it has been signed while in the presence of a witness who can attest the signature. It can also be signed under the direction of the relevant individual, while in the presence of two witnesses.

The deed can then be delivered per the rules laid out section 46 of the Companies Act 2006.

Who can be a witness?

There are only a few – albeit particular – restrictions on who may act as a witness during the signing of a deed.

• A witness cannot be one of the parties involved in the signing of the deed itself.

• It is acceptable for the spouse, partner, or civil partner to be a witness.

• It is acceptable for an employee of a company involved in the deed to be a witness.

However, it is generally considered best practice to find an independent individual to act as the witness. This can help uphold the legitimacy of the deed later on.

Can e-Signatures be used to execute a deed?

It is considered generally acceptable for deeds to be agreed upon and executed without ever having a physical meeting between parties. Even before the pandemic, virtual executions were becoming more and more commonplace.

In these situations, the deed will be delivered via electronic channels – typically in PDF format and sent as an email attachment. The recipient will then print it out, sign in manually (otherwise known as a “wet-ink” signature), scan the signed copy and return it via email.

As long as the criteria are met for the document to be legally classed as a binding deed, then this is a valid form of execution.

It is important to remember that this is not an acceptable form of execution for two kinds of a deed. This includes wills and UK land registry deeds.

Witnessing Electronic Signatures

The question of how the witnessing of signatories works for an electronic signature inevitably arises during this process. As with everything, this wholly depends upon the kind of deed or document that is being signed, however – in general – the rules are as follows.

According to the Law Commission, a witness is considered valid if they are physically present with the signatory. This means that they are in the same location, witnessing the signature take place.

What is not allowed under current law is for a witness to carry out their duties remotely. This means that a witness cannot be considered valid if they are connected via a video call for, example.

E-Signing Platforms

The law recommends that if a deed is executed remotely, it should be done so through a legitimate e-signing platform whenever possible. Also, if one or both of the signatory is in the name of the company, then two authorised signatories must be used. This method can be useful as it makes witnessing a signature unnecessary.

E-signing platforms such as DocuSign, Adobe Sign, and more can be useful. These types of software are designed to complete deeds and documents legally and can generate paper trails automatically that can be used as evidence later on.

E-Signature Checklist

There are some main points to remember when using e-signatures. These can be handy rules of thumb to follow. They are:

• Is there a reason why an e-signature might not be valid?

• Do you need to use a specific type of e-signature?

• Which e-singing platform will you use?

• These platforms require one party to coordinate – who will be responsible for that?

• Is there any extra information that you might need to include, such as when the contract or deed will take effect?

• Keep some proof from the signing process that you undertook the proper procedures. Many platforms automatically generate this, such as certificates.

Want to know more?

Our solicitors can provide specialised and detailed advice on remotely executing deeds and contracts. Contact them now to hear their advice tailored for you!

 

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