Many businesses use electronic signatures for day-to-day contracts and agreements as it can be more practical, efficient and cuts down on printing.
In contrast, there has been a general reluctance to use electronic signatures in more ‘formal’ circumstances such as corporate transactions, banking arrangements or, in particular, where a document has to be executed as a deed due to uncertainty about the current law.
However, a recent Law Commission report has confirmed that in most circumstances (noting that the making of wills or certain dealings with registered land were excluded from the scope of the report) electronic signatures can be used to execute documents (including deeds) and are legally valid under English Law provided that the person signing the document intends to authenticate the document and any execution formalities are adhered to.
The term ‘electronic signature’ covers everything from a scanned manuscript signature added to documents, typed signatures, clicking ‘I accept’ on a website and using an e-signing platform. Essentially, any form of signing that is intended to link an identifiable person to information held in electronic form is likely to be considered an ‘electronic signature.’
To illustrate, in a recent High Court decision an automatically generated email sign-off was considered sufficient to complete a contract as the sender had a clear intention to associate himself with, and authenticate, the email setting out the terms of the agreement.
The Law Commission report may help boost confidence in the use of electronic signatures in the UK, although thought should be given to risks of fraud and security when choosing the type of electronic signature being used.
Finally, deeds to be signed in the presence of a witness will still require the physical presence of that witness (although the witness may also execute electronically), which means that witnessing a deed via video link is still a thing of the future. However, the Law Commission has recommended that practical solutions to ‘remote’ witnessing should be explored and that the Government should consider legislative reform to allow for this.