The legal position on electronically executing documents

5 Aug 2020 , 11:36am

Electronically executing documents in the UK is permissible but pose a number of problems elsewhere, says HGF senior IP lawyer Chris Robinson.

The COVID-19 pandemic has had a large impact on working life and raised many questions about how business practices can be carried out. One important question is whether legal documents can be signed electronically, given social distancing requirements. The position in the UK is that in most cases, electronic signatures can be used instead of handwritten ones with the government’s view that electronic signatures “are permissible and can be used in confidence in commercial and consumer documents”  

Contracts

Provided that key elements are in place, such as offer and acceptance, a simple contract may be entered into with an electronic signature of the parties. English law does not require contracts to take a specific form. Case law has established that clicking ‘I accept’ on a website, a name at the end of an email or a scanned signature all constitute valid signatures. The main question is - does the person signing the document intend to ‘authenticate’ that document? Parties should also be satisfied that;

  • The electronic signature is applied with the necessary intent and authority
  • A company does not have provisions preventing the use of electronic signatures in its constitutional documents
  • Where a party is from overseas, they should ensure that the laws of their own country permit electronic signature
  • The contract itself does not prohibit electronic signature

On an update issued by the Law Society on 18 June 2020, they recommended that when dealing with electronic signatures, among other things speak to lawyers on the other side to ensure there is clear agreement on how to manage a transaction, and where verification of the party’s identity is an issue, you may want to take extra steps such as taking a live video recording of the transaction and share this with the parties.  

Deeds

It is acceptable for deeds to be signed electronically. Some organisations are unwilling to accept electronically signed deeds, so it is best to check first whether these will be accepted. There are no legal requirements around who can act as a witness, however, businesses and individuals must keep in mind that a witness may be called upon to give evidence that they witnessed the signature. Therefore, using a third-party witness is the best approach. Where possible you should avoid having a spouse, cohabitee, civil partner or other family member witness signature of a document. The witness needs to be ‘physically present’, therefore, a document which requires witnessing such as a deed cannot be witnessed remotely (such as by video link). This will obviously make the signature of documents requiring a witness to be present (such as deeds) difficult given social distancing requirements and the required closure of many offices and businesses. The best approach is for the witness to stand 1 metre away (the previous 2 metre rule in the UK was relaxed) from the signing party and then the device can be cleaned and shared with the witness for their signature. As always, agreeing the process for signature with the other party beforehand will enable a smoother signature process.  

Witness Statements

The electronic execution of witness statements for litigation is acceptable.  

Intellectual Property Assignments

The UKIPO accepts documents signed electronically (such as assignments of intellectual property rights like patents and trade marks). This is the same for the EUIPO, which accepts electronically signed EU Trade Mark assignments and assignments of Registered Community Designs. The EPO, however, does not accept documents signed electronically, except where EPOLine is used to file documentS electronically. Therefore, assignments of European patent applications will still need to be signed manually.  

Foreign Jurisdictions

As discussed above, where a document involves a party signing in a foreign jurisdiction or foreign property rights, you should be careful to ensure that the laws in their country permit them to sign electronically (if they need to do so). Many jurisdictions allow for electronic signature of documents, but as with the UK there are exceptions. France for example, has exclusions for certain documents such as private deeds, and Germany has statutory provisions that require wet ink signature for some documents.  

Overall

Use of electronic signatures by clients may be essential to ensuring that business is transacted smoothly during this time of uncertainty. Making sure provisions are in place to carry this out (such as IT departments setting up the ability for staff and clients to sign in this way, and the ability to use electronic signature software) will prove crucial to many firms. As above, getting agreement with the other parties on how to sign (and checking a registry’s stance on e-signatures) and keeping all documentary evidence will prove essential for effective document management.  

Summary

Document Type Can a Digital Signature be used?
Simple contract Yes
Deed Yes, however, some institutions (such as the Land Registry) unwilling to accept certain documents signed electronically so best to check with the organisation. A signature cannot be witnessed remotely (such as via an internet connection)
Witness Statements Yes
IP Assignment documents Yes / No – although the UKIPO accepts electronically signed documents, the EPO does not
WIPO Inventor Declarations Yes