Working from home/Self-isolating: Can documents be signed electronically?

Due to the current coronavirus pandemic, many people are now working from home and so there is an increased need to sign documents electronically.

The Law Society and the City of London Law Society have provided some clarity around when electronic signatures can and cannot be used in the context of commercial contracts.

What is an electronic signature?

Electronic signatures can include a person:

• typing their name into a contract or email with contractual terms;
• pasting a scan of their signature into a soft copy contract in the execution block;
• using an electronic signature platform to click and insert a typed or handwriting font into the execution block;
• using an e-pen or finger to sign their name on a tablet.

We are look at the different types of documents and if you can use an electronic signature.

Simple Contracts – can you use electronic signatures?

Yes – you can use electronic signatures (subject to express provisions in the contract to the contrary).

As simple contracts, for example agreements that do not need to be executed as deeds, do not need to be in any particular form under English Law, there are no restrictions on the use of electronic signatures.

Some simple contracts can be formed without any signature, for example by an exchange of emails showing appropriate intention to contract and including the guarantor’s name, with the intention that it is a signature, contained in the body of the email.

Documents subject to specific statutory requirements – can you use electronic signatures?

Yes – you can use electronic signatures.

You can use electronic signatures where a document specifically states that it must be executed “in writing,” “under hand” or “signed.”

This is because:

• “in writing” means words reproduced in a visible form;
• a “signature” is any mark intended to give authenticity to the document; and
• “under hand” means anything executed other than by way of deed.

Deeds – can you use electronic signatures?

Yes – you can use electronic signatures.

When executing a deed, for the electronic signature to be valid, you must ensure that the witness is physically present when the signatory is signing.

For English companies, ensure that the deed is executed by one director in the presence of a witness, or by two directors or a director and the company secretary (as required by the Companies Act 2006).

Where two directors or a director and the company secretary are signing a deed on behalf of a company, the officers can sign documents in counterpart to meet the requirements for due execution of a deed by a company.

When executing a deed, return the entire document and signed signature page (not just the signed signature page).

Deeds: Company seal – can you use electronic signatures?

No – you cannot use electronic signatures.

Unless you can use a trust service provider, do not use electronic seals.

Land Registry and Land Charges Registry – can you use electronic signatures?

No – you cannot use electronic signatures.

The Land Registry and Land Charges Registry currently require wet-ink signatures on any paper versions of documents sent to them.

Therefore, you may need wet-ink signed documents for registration purposes for the following documents:

• transfers;
• leases;
• charges; and
• any other deeds that have to be registered at the Land Registry or Company Registry.

If wet-ink signatures are necessary, you can only proceed with completing a transaction once you have the wet-ink signed documents, not when you have only seen electronic images of them.

The Land Registry is currently developing a new digital mortgage service for which it will supply digital signatures. This service is not currently ready for public use but more information on this will become available once the service has been set up.

HMRC – can you use electronic signatures?

No – you cannot use electronic signatures.

HMRC would normally expect to stamp a wet-ink version of the document.

General comments relating to all documents

It is not necessary to say in the document that an agreement is being signed electronically.

It is possible for one party to sign electronically and the other party to sign in wet-ink.

An electronically signed document constitutes an original document:

• originals can be in hard copy or electronic form;
• where signatories sign the same document uploaded to an electronic signature platform, they will each be deemed to have signed the same counterpart;
• documents can be dated electronically or by inserting the date by hand;
• amendments can be made to an electronic or hard copy original following the same rules for amendments to wet-ink documents.