Execution of documents remotely and electronic signatures
With large numbers of IP lawyers, attorneys and clients currently working remotely, one question which arises is how documents which require signatures, such as assignments of IP rights and court documents, can be executed remotely. In this article we examine some of the legal issues around remote execution of documents.
What is an electronic signature?
Electronic signatures can take a number of forms:
- a person typing their name into a contract or into an email containing the terms of a contract;
- a person electronically pasting their signature (in the form of an image) into an electronic version of the contract in the appropriate place;
- a person accessing a contract through a web-based e-signature platform (such as DocuSign or Adobe Sign) and clicking to have their name in a typed or handwriting font automatically inserted into the contract;
- a person using a finger, light pen or stylus and a touchscreen to write their name electronically;
- a person printing a document, applying a wet-ink signature and then scanning or taking a photograph of the same.
Can electronic signatures be used to execute simple contracts under English law?
The Law Commission recently confirmed that an electronic signature is capable in law of being used to execute a document, provided that the person signing the document intended to authenticate it, and that formalities relating to the execution of that document are satisfied.
Best practice is to confirm the method of execution in advance by email or consider including a clause in the agreement confirming that electronic signatures are permitted and that the parties’ intentions are that it will have the same legal effect as a manuscript signature. Therefore use of any of the above types of electronic signature would be a valid execution of a simple contract.
Can electronic signatures be used to execute deeds under English law?
The general formalities required for deeds are more onerous than for simple contracts. As a result, and at the time of writing this article in light of the current coronavirus (Covid-19) pandemic, careful consideration should be given as to whether a deed is necessary.
A deed must be in writing, it must be clear that it is intended to take effect as a deed, it must be validly executed and it must be delivered. If executing a deed as an individual, it must be signed in the presence of a witness. The courts have held that a deed cannot be witnessed through a video call and therefore this creates difficulties during the current pandemic situation.
Although a single director can sign a deed for a company in the presence of a witness, it is also possible for a UK company to execute a deed by having two directors, or a director and a company secretary, sign the deed. This avoids a witness having to be physically present to witness the act of signing. For each party, the two signatories would electronically sign the same document by one authorised signatory signing, followed by the other. If a counterpart clause is included which clarifies that separate copies of the agreement may be executed by different parties, then the parties do not need to sign the same copy of the document and that each copy will be considered to be an original.
The parties will have to take steps to ensure the signing arrangements adequately address when delivery takes place. The deed should state when delivery will take place, for example stating that “This deed has been executed as a deed and delivered on the date set out on the top of page 1 of this deed.” Usual practice would be for each party to exchange their signed counterpart with the signed counterpart of the other party. The deed should be dated with the date of the final party to sign and deliver (email a PDF copy of the executed deed by email). If signature and delivery simultaneously will not be possible then this needs to be reflected in the deed.
Can electronic signatures be used to sign court documents?
With regard to court documents including particulars of claim, defences and witness statements, it is sufficient for a party or their representative to type their name where the signature is required. CPR 5.3 provides that where any part of the CPR requires a document to be signed, that requirement shall be satisfied if the signature is printed by computer or other mechanical means. There is no specific requirement for there to be a handwritten signature and CPR 5.3 makes no distinction between different types of documents: a typed signature, in principle, could also be used on a witness statement.
Here we answer some common questions:
If I am unable to print or scan a document, how can I sign electronically?
You can take a photograph of the executed signature page for simple contracts. A web based e-signature platform can also be used, as well as typing your name into the contract or pasting an image of your signature. However, for a deed the entire pdf/word document plus signature page must be returned.
Can I use an electronic signature for deeds executed by company seal?
No, you cannot use electronic signatures.
Can I amend a document that has been signed by electronic signature?
Amendments can be made to an electronic or hard copy original following the same rules for amendments to wet-ink documents. The parties (or their lawyers) should initial the amendments which show that they approve the changes. Those initialling the amendments should have the requisite authority to do so. However, if the agreement requires much more substantial changes it is best practice to execute a new agreement effecting this change.
Can I use electronic signatures when contracting with parties incorporated outside of the UK?
If you are entering into a contract with a company incorporated outside the UK, you should take legal advice in that company's jurisdiction of incorporation to confirm that the use of electronic signatures will not impact on the validity of the contract.
Conclusions and practical guidance
Whilst electronic signatures will undoubtedly appear to be an appealing solution, whether or not they are appropriate will be specific to the circumstances, for example, exercise caution if contracting with entities outside the UK.
If at all possible, simple contracts are preferable to deeds. Companies may want to consider whether to authorise additional individuals to sign contracts on their behalf, in case regular signatories are unable to sign. Where signatories are working from home, companies will want to ensure that they are able to access electronic signatures remotely, print signature pages as necessary and (where copy signatures are sufficient) scan back or provide a pdf of signature pages.
Parties should also consider including counterpart clauses where appropriate to allow for the execution of separate copies of an agreement, which are then exchanged.