In light of the Covid-19 pandemic, the majority of businesses have moved to remote working, with staff working from home where possible. Whilst this may be a novelty for some employees, the day-to-day business of a company must continue. This has caused concern for some organisations as to how, for instance, they may enter into contracts for the purchase of goods or services or to complete the transfer of the legal title to property.
We recently provided a summary of the Law Commission’s report, titled electronic execution of documents’, which it published on 4 September 2019 (link: https://www.ts-p.co.uk/news/signatures-for-the-digital-age). In its report, the Law Commission confirmed that the use of an electronic signature would constitute valid execution of a document as a viable alternative to the more traditional “wet-ink” signature. The result of this report means that during these unprecedented times, a company’s representative may enter into a contract electronically, simply by typing their name at the end of an email. This, of course, has some limitations insofar as the following key principles apply.
Firstly, the signatory must intend to authenticate the document which they are signing. For this, you should be clear in your email what you are and are not agreeing to. It is good practice to, where possible, attach a copy of the document to the email which you are ‘authenticating’ and state some of the key terms of the agreement. This should help mitigate the risk that you may enter into a contract inadvertently, whereby in the current circumstances, everything is moving fast and counterparties may be likely to react to an email perhaps with more vigour than you intended.
Secondly, whilst the Law Commission’s publication is a welcome digital advance, particularly in these current challenging times, the necessary formalities for some documents must still be adhered to. The most difficult documents to execute electronically which come to mind, are those documents which are required to be executed as a deed which require execution “in the presence of a witness”. Unfortunately, therefore, this means that the witness must be physically present and any witnessing over video conference, whichever form you have been using to stay in contact with friends and family over the past few weeks, will not satisfy this requirement.
Whilst we are all quarantined at home, you would be forgiven for thinking that a deed can be witnessed by someone else in your household. However, a deed must be signed in the presence of an independent witness, and therefore should not be a spouse, partner or family member, nor should the witness have any interest in the subject matter of the deed which is being executed.
Thankfully, the law seems to be progressing with the evolving digital age, such that businesses can (as far as possible) continue to operate as normal through the electronic execution of simple documents. However, unless you have a neighbour who can witness the document in accordance with the government’s recommended social distance of two metres, any documents which are required to be executed as a deed may just have to wait until we overcome these unprecedented circumstances.
