In an era dominated by technological advancements, the validity of electronic signatures become a crucial aspect of legal transactions in the United Kingdom and across the world. This article explores key considerations surrounding the use of e-signatures, including the intention to authenticate, the pragmatic approach of courts and legislation, and various examples of acceptable e-signature methods.
The Law Commission’s “Statement on the law regarding electronic signatures” in September 2019, put the intention to authenticate at the heart of the validity of e-signatures. Regardless of the method employed, it is paramount that the signatory demonstrates a clear intention to authenticate the document.
It emphasises that an electronic signature is legally capable of executing a document, including a deed, as long as two key conditions are met:
Intention to Authenticate: The person signing the document must have the intention to authenticate it.
Formalities: Any formalities related to the execution of the document must be satisfied. These formalities may be statutory, contractual, or otherwise specified in private law instruments, for example, so called “Mercury signing approach” of HM Land Registry regarding e-signing of the deeds.
Courts in the UK have adopted a pragmatic approach, acknowledging the necessity to adapt to technological advancements. A good example is a case of Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2012] EWCA Civ 265 which concerned a guarantee agreement. Such a contract should, under s. 4 ofthe Statute of Frauds 1677, be signed by or on behalf of the guarantor to be enforceable. It was argued in this case that the contract was validly formed by virtue of exchange of e-mails between the parties. The Court of Appeal decided that (quote): “It was common ground both before the judge and before us that an electronic signature is sufficient and that a first name, initials, or perhaps a nickname will suffice.”
Legislation, such as the Electronic Identification and Trust Services (eIDAS) Regulation is a significant piece of legislation, further solidifies the legal standing of electronic signatures in the UK. It defines an electronic signature as “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign”. The definition is, therefore, very broad, since “data in electronic form” can be almost everything if “used by the signatory to sign”, for example, a nickname, name, password, PIN, biometric data, usage of a web-based eSigning platform and so on.
eIDAS categorises electronic signatures into three levels, namely “electronic signature”, “advanced electronic signature”, and “qualified electronic signature”. However, in most cases the “simple” electronic signature will suffice, as the same piece of legislation in its article 25(1) reads that: “An electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures”.
While electronic signatures are generally accepted, there are some exceptions, for instance, wills which require handwritten signature. Wills cannot be signed electronically, but witnesses can be involved in the process by electronic means. Therefore, they can witness the signature electronically (for example, via videoconference), but must sign in wet ink.
The recent recommendations from the Industry Working Group emphasise the importance of parties agreeing at an early stage to sign documents electronically. Choosing a reliable signing platform and maintaining additional evidence of agreement, such as e-mail correspondence, is considered good practice. Flexibility in offering multiple signing options is also advised, considering the diverse circumstances and potential vulnerabilities of parties.
The full text of the Industry Working Group Final Report can be found here.
A great majority of documents can be signed electronically in this jurisdiction: simple contracts, deeds (as long as a witness is physically present, but can attest the signature in electronic form), real estate contracts, contracts for sale of land, guarantee agreements etc.
The evolving landscape of electronic signatures in the UK requires legal practitioners and businesspeople to stay informed about legislative developments and industry best practices. As technology continues to shape legal processes, the intention to authenticate remains a cornerstone for the acceptance of e-signatures, ensuring the integrity and validity of electronic transactions.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
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