We utilise Docusign for our e-signature requirements and look at what they mean for our business with Osborne Clarke Employment Lawyers.
Electronic signatures: Law Society practice note Q&A
Electronic signatures have been around for a number years, but the absence of definitive statutory or common law guidance on their legal efficacy has meant that their use on larger transactions has been somewhat restricted.
In order to help overcome this, the Law Society and the City of London Law Society jointly instructed leading counsel to distil some of the emerging law around electronic signatures and provide practitioners with some clarity around what electronic signatures can and can't be used for in the context of commercial contracts.
Why has the Law Society issued this guidance now?
We have known for some time that the Law Society and the CLLS were looking at putting out some guidance on this topic. The driver was an increased desire amongst both law firms and their clients to use online electronic signature platforms on their deals. Because of the legal uncertainties mentioned above, there was a need to build consensus that electronic signatures were valid under English law.
Is any of the guidance new or surprising?
Not really – the courts have been willing over the last few years to accommodate technological developments in the way that businesses engage with each other, and the practice note builds on existing legal principles on the execution of documents set down by the English courts. The practice note largely confirms our current understanding of the law around electronic signatures, but provides some helpful practical guidance.
Is the practice note binding on the court?
No, but we think it is highly likely that the court will follow the principles set out in it.
What is an "electronic signature" for these purposes?
The practice note states that electronic signatures can take a variety of forms:
- somebody typing their name into a contract or email with contractual terms.
- a person pasting a scan of their signature into a soft copy contract in the execution block.
- a person using an electronic signature platform to click to insert a typed or handwriting font into the execution block.
- a person using a e-pen or finger to sign their name on a tablet.
The note does not distinguish between any of these modes of electronic signature. Whilst there are harmonising EU regulations which govern the use and acceptance of "advanced" electronic signatures, they are not commonly used in the England, and so the guidance does not rely on EU harmonisation rules to reach its conclusions, which are instead based on principles developed in the English courts over time.
So, what can electronic signatures be used for?
Pretty much anything in terms of the execution of agreements, subject to a couple of exceptions where HMRC and the Land Registry currently expect "wet ink" versions of executed documents, which we look at below.
Because simple contracts (i.e. agreements that do not need to executed as deeds) don't need to be in any particular form under English law (and do not even need to be in writing) there are no restrictions on the use of electronic signatures.
Documents subject to specific statutory requirements
The practice note looks at various statutory requirements requiring documents to be executed "in writing", "under hand" or "signed". The practice note basically confirms that electronic signatures will satisfy each of these tests: "in writing" just means words reproduced in a visible form, a "signature" is any mark intended to give authenticity to the document, and so can be any of the forms of electronic signature mentioned above – as the practice note states "it does not matter how the signatory inserted the electronic signature into the document", and "under hand" means anything executed other than by way of deed.
Read more about e-signatures