By David Gee
On 3rd September 2019, the Law Commission published a report advising that, in most cases, the electronic execution of documents should be valid and legally binding.
The reality of the modern world is that businesses are becoming increasingly reliant on technology to increase productivity and efficiency. The move toward a greater use of technology has manifested itself not just in the operations of the business itself, but in the way commercial bargains and contracts are struck. With time invariably of the essence, convenience is valued highly and the ability to execute and exchange contracts and documents via 'soft-copy' mediums such as email and even WhatsApp is becoming more and more attractive - despite the informal nature. To this end, on 3rd September 2019 the Law Commission published a report (Law Com No 386) on the electronic execution of documents to reflect contemporary business practices and move to provide comfort to those who may have questioned the validity and legally binding nature of electronic signatures.
The Law Commission advised that:
1. An electronic signature is capable in law of being used to execute a document provided that:
- the person signing has an intention to authenticate the document; and
- any formalities relating to execution of the document are satisfied.
2. An electronic signature is admissible in evidence in legal proceedings; and
3. The common law adopts a pragmatic approach and does not prescribe any particular form or type of signature.
This guidance also applies to the execution of deeds, although any deed 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). What's more, the Law Commission further advised that there is no reason to believe that the following forms of signature (which have been held to amount to valid signatures in non-electronic form) will not also be held to be valid by the courts in electronic form:
- signing with an 'X';
- signing with initials only;
- using a stamp;
- printing of a name;
- signing with a mark; or
- a description of the signatory if sufficiently unambiguous (such as 'your loving mother').
So if your business needs demand the ability to execute documents quickly and efficiently, the recent advice of the Law Commission should provide you with sufficient comfort that in most cases a document executed electronically should be deemed legally binding - and there is certainly flexibility as to the form of execution.
For further advice, or to discuss your case, please contact David Gee at firstname.lastname@example.org or on 020 7870 3879