Electronic signatures – legally binding or not worth the paper they’re written on?

As we have become more and more technologically advanced, we have become more reliant upon electronic forms of communication. Email, text message and various other instant messaging platforms have become more and more prevalent as a means of communicating both in a social context and more recently a professional one.

Gone are the days where we would sit down and actually write a letter. With a pen. And put it in the post, knowing that it would take a couple of days to reach its intended recipient.

In a world of instant communication we have developed the ability to sign documents electronically, either by typing our names in a particular place to indicate acceptance, signing off on emails, writing with a stylus or ticking a box to confirm acceptance of terms. These are all forms of electronic signature.

So is it legally binding?

In short, yes it can be. In order to create a simple legally binding contract you need only an intent to create legal relations.

However, there are certain types of documents that require specific formalities in order to be validly executed. For example, the Land Registry will accept only wet ink signatures under hand on transfers of property and the law requires that a deed must be signed in the presence of a witness who attests the signature. This causes problems logistically with electronic signatures unless both the signatory and the attesting witness are together when signing.

A recent Law Commission report concluded that the current law probably does not allow for “remote” witnessing where the witness is not physically present when a signatory signs a deed.

What does this mean for you or your business?

If not approached correctly there is a risk that the document you have intended to sign is in fact void and unenforceable.

We would advise caution when signing documents electronically. Before you sign make sure you understand what you are signing, what the formalities are for validly signing that particular type of document (i.e. is it a deed or a transfer of property?) and if you have any concerns, ask.

What do you need to be doing now?

There is call for reform in this area to make the law clearer on the formalities for executing documents as a deed. We will publish an update as and when this happens, but in the meantime please do get in touch if you would like more information.

You can find a summary of the Law Commission report here or a copy of the full findings here.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.