Generally speaking, under English law, electronic signatures can be used to execute contracts, including deeds. The signatory must intend to authenticate the document and any prescribed formalities relating to the execution of that specific document must be satisfied.
Examples of Electronic Signature
Examples of electronic signature include a person:
- Using a finger or a stylus on a touchscreen to write their name or signature electronically (i.e. a motion signature) in the signature block in the contract.
- Accessing the contract on an e-signature platform and clicking to have their name or signature inserted in the signature block.
- Pasting their signature (for example, by way of an image) into an electronic copy of the contract in the signature block.
- Typing their name into the signature block in the contract.
Using an electronic signature platform (such as DocuSign) may be preferred in practice as it can provide greater reliability that it was the signatory who caused the signature to be made; as platforms can provide a digital audit trail of who signed and when.
Signing a Deed
A deed needs to be in writing (which is interpreted widely), duly executed and delivered.
Individuals sign deeds in the presence of a witness who attests their signature. In relation to the identity of the witness, it is considered best practice that they are an adult (of sound mind) and are independent.
Deeds can provide a practical issue for e-signature as witnesses to deeds are required to be physically present in the room at the point of signature. Witnesses cannot witness signatures by video link.
This requirement for physical presence can negate the benefits of e-execution. However, provided the witness was physically present at the time of signature then it is possible for a deed to be validly signed electronically.
Companies can sign deeds by a director in the presence of a witness who attests their signature. However, given the practical issue with witnesses, using two authorised signatories (being either two directors or a director and the company secretary) may be preferable for e-execution.
Certain contracts require a prescribed type of signature due to requirements set out in the law governing it or under the contractual arrangement itself. There are circumstances where electronic signatures, or certain forms of signature, may not be effective to validly execute a contract and should not be used. For example, electronic signatures cannot be used for Lasting Powers of Attorney.
It should also be considered whether:
- Any public authority or registry that a document needs to be filed with requires to receive a wet-ink signature.
- A party is prevented from using electronic signatures by its constitution or by a resolution of its board.
- It is sufficiently certain that the purported signature has in fact come from the relevant signatory.
- The location of signature has legal/tax consequences and whether electronic signature may have deemed consequences in relation to that.
- The laws of the jurisdiction in which a signatory is based (i.e. an overseas company) allow that party to bind itself electronically.
The COVID-19 pandemic has accelerated change at some public bodies where documents are required to be filed. HMRC’s Stamp Duty Office ordinarily require a wet-ink stock transfer form in relation to the payment of stamp duty but are currently accepting scans. HM Land Registry now accept deeds signed electronically if conveyancers control the signature process through an e-signature platform and use One-time Password access authentication.
Therefore, electronic signatures are a complex and developing area of the law. There are also a number of practical considerations; not least the reliability of the e-signature where a witness is involved. Advice should always be taken for the specific contract and on the specific signature provided.
BHW’s Corporate and Commercial department can accommodate an e-signature completion process.
For further information or advice, please contact our Corporate and Commercial team on 0116 289 7000 or email firstname.lastname@example.org.