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The Law Society has issued guidance on the execution of contracts using electronic signatures, whether by clients of your practice or by another party to the transaction. As usual, the status of the Practice Note is that it represents the Law Society's view of good practice: it is not mandatory, but it would be far easier to account to the SRA for your actions (if necessary) if you have complied with it. It also has the backing of leading counsel approval.
The Practice Note applies to commercial contracts entered into, and some other documents signed, in a business context, although its principles may be applicable to other contracts between consumers or individuals. It is subject to any relevant regulatory or tax considerations (i.e. in some cases, parties will require their own original document containing original signatures for those purposes). It will obviously also depend upon whether English law has been chosen to govern the contract or agreement in the jurisdiction/governing law clause.
In summary, the following may be concluded using an electronic signature, using a combination of electronic and wet-ink signatures, and without any specific reference to the electronic signature being required in the document itself for it to be validly executed:
Generally, documents relating to a company incorporated under the Companies Act 2006 may be signed with an electronic signature, but if sent or supplied in electronic form, it may be necessary for the identity of the sender to be confirmed by the company or accompanied by a statement of identity that the company has no reason to doubt the truth of it. (Refer to the Practice Note for further information relating to execution by companies.)
For evidential purposes, if the authenticity of a document signed using an electronic signature were to be challenged, the same principles would apply as if a wet-ink signed document were challenged, namely ’an English court would accept the document bearing the electronic signature as prima facie evidence that the document was authentic and unless the opponent adduced some evidence to the contrary, that would be sufficient to deal with the challenge’.
The scenarios in which it is necessary to check the identity of the signatory, the authenticity of the signature and/or whether the document was properly approved, and those in which it is possible to rely on assumptions, are the same irrespective of whether the signature is wet-ink or electronic. However, paragraph 5 of the Practice Note sets out various examples of the different evidence, which could be used to prove the authenticity of a signature, where necessary.
Originals and Counterparts
Guidance is also given on where there are a number of originals and counterparts, including:
Paragraph 8 of the Practice Note also sets out other factors which need to be taken into account, including:
Separate legal advice should be obtained on this where any party is not from England, or where the document does not specify English as either the governing law or the jurisdiction for any proceedings, enforcement, registration, or where there is any other requirement for the document to be notarised or apostilled.
Client Relationship Manager
T: 0113 385 4483
M: 07432 695 289
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