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E-Sigs: No More Smoke and Mirrors

The Law Society publishes its views on how electronic signatures can be used when executing commercial contracts.

A joint working party (JWP) of the Law Society Company Law Committee, the City of London Law Society Company Law and Financial Law Committees have published guidance on the use of electronic signatures in executing commercial contracts governed by English law. The JWP have taken a progressive view, both in relation to what constitutes an electronic signature and what documents can be validly executed with an electronic signature.

The JWP note that an electronic signature can be inserted into a soft copy document in several ways, including:

  • typing your name;
  • pasting an image of your signature;
  • ticking a box; or
  • using your finger or stylus to write your signature.

The JWP also take a broad view in relation the types of legal documents that can be validly executed using an electronic signature. Unsurprisingly, simple contracts and company minutes and resolutions are capable of being executed using electronic signatures (although, companies should take care to confirm the identity of the sender). Notably, the JWP also take the view that documents which are required to be in writing (eg documents relating to the sale of land or transfer of company shares) and/or are required to be witnessed, are also capable of being executed and witnessed using electronic signatures (although, care must be taken to ensure that proper procedure is followed). There are, however, certain documents that must still be signed with a “wet ink” signature because due to specific requirements imposed by a relevant authority or registry (e.g. the registration of title at the Land Registry).

Note that, while the guidance note is simply the JWP’s views as to best practice (i.e. the views reached are not binding), the guidance note has been approved by leading counsel, Mark Hapgood QC.

WAB Comment

The use of electronic signatures is not new. Indeed, many of us when purchasing goods or service online, will have electronically signed an agreement with the supplier. However, what is still rare is the use of electronic signatures when entering into significant corporate or commercial contracts. Until now, advisors have generally preferred to take a conservative approach and stick with the tried and true, wet ink signature. Where an agreement needs to be signed by several parties that may be in multiple jurisdictions, collating and reviewing the signed documents can add significant time and costs to the matter.

Hopefully, with the release of the JWP’s guidance, advisors will be more inclined to accept the use of electronic signatures. In time, we hope that being able to sign documents directly from a smartphone, tablet or desktop will be the norm.

Read the practice note here.

Disclaimer: This article is produced for and on behalf of White & Black Limited, which is a limited liability company registered in England and Wales with registered number 06436665. It is authorised and regulated by the Solicitors Regulation Authority. The contents of this article should be viewed as opinion and general guidance, and should not be treated as legal advice.

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