When is it sufficient to constitute a contract using electronic signatures? This is often a source of uncertainty. Therefore, the latest Law Commission report issued 4 September 2019 on the matter in English law is welcome.
The Law Commission includes a broad and very outlined summary of the law as it currently stands regarding the validity of electronic signatures.
An electronic signature is capable in law of being used to execute a document (including a deed) provided that the person signing the document intends to authenticate the document and any execution formalities are satisfied.
An electronic signature is admissible in evidence in legal proceedings, for example, to prove or disprove the identity of a signatory and/or the signatory’s intention to authenticate the document.
As for what actually is an electronic signature, the Reports states that the common law adopts a pragmatic approach and does not prescribe any particular form or type of signature (unless this is specified in applicable legislation or contractual arrangements, or where case law specific to the document says otherwise).
The courts adopt an objective approach, considering all of the surrounding circumstances, as to whether method of signature adopted in any given case demonstrates an “authenticating intention”. Examples are given of non-electronic forms that the courts have held to amount to valid signatures and it states that electronic equivalents of these non-electronic forms of signature are likely to be recognised by a court as legally valid. Examples are also given of electronic forms that the courts have held amount to valid signatures in the case of statutory obligations to provide a signature where the statute is silent as to whether an electronic signature is acceptable.
However, in cases where a deed is be signed “in the presence of a witnesses” the Law Commission’s view is that this requires the physical presence of that witness, even where both the person executing the deed and the witness are executing or attesting the document using an electronic signature.
The Law Commission recommends an industry working group be established to consider practical issues relating to the electronic execution of documents. The working group should, among other things, consider potential solutions to the obstacles to video witnessing of electronic signatures on deeds and attestation and legislative reform to allow for video witnessing. It also recommends a future review of the law of deeds.