It is now possible for parties to sit on opposite sides of the world and sign an agreement electronically. However, an agreement may be rendered invalid if the legal document is executed by using an electronic signature in an incorrect fashion.
Today, we’ll take an in-depth look at signing documents electronically and the best way to sidestep issues that may render your agreement null and void.
What exactly is an electronic signature?
While there are many different kinds of electronic signing, not all are considered valid. To be deemed valid, a single sign or combination of signs must first satisfy certain statutory requirements.
The signature must be typed, or a picture of a signature must be inserted into the appropriate place designated for it within a document, and the signatory who is inserting the signature or picture must intend that their dedicated mark authenticates the document.
What forms can a dedicated electronic signature take?
For the most part, commonly acceptable electronic signatures include the following:
• Typing out their given name into an email or attached contract that includes the terms of an agreement
• Using electronic means, pasting their personal signature in a digital format like a .jpg image, into a version of the contract in electronic format within the appropriate area
• Employing a web-based built-for-purpose e-signature platform to access a contract and clicking to have their given name, either written in a “handwritten” font or typed letters, automatically included in the proper place on the contract
• Using their finger or an e-pen in conjunction with a touchscreen to add their name electronically within the correct place in the contract
When is it possible to sign documents with electronic signatures?
Parties will find that legal documents often require different degrees of authentication. In general, the more important the documentation, the greater degree of diligence is required.
You will be able to execute a simple contract with an electronic signature, providing the document isn’t subject to particular legal requirements.
Documents subject to legal requirements
Some documentation, like contracts involving land, are often subject to certain statutory requirements. In such circumstances, there is typically a legal requirement for signatures to be written in ink. Despite this, if parties add an electronic signature temporarily with the intention to correctly authenticate the document in the future, this can be sufficient for documentation to be considered executed in writing by hand.
Electronic signatures can execute deeds, as long as the signatory intends to authenticate the documentation and all execution formalities are fully satisfied. The lawful requirement that deeds must always be signed with a witness present means that a witness’s physical presence is required. This will be so even when both the witness and person executing a deed are employing an electronic signature. Both individuals must be physically within the same room at the same time while the electronic signatures are added to the deed.
It is vital for any documents being signed electronically, such as deeds, to contain the specific execution provisions required and to make certain that they are efficiently adhered to, or there may be a risk that a deed or document may be deemed invalid and non-binding.
Normally, an enterprise or organisation’s constitutional documents will state if electronic signatures are acceptable for the firm’s board and meeting minutes. Where a company has not specified how documents should be executed, a document using electronic signatures is presumed valid.
Do both parties need to use the same signing methods?
If one party signs an agreement using an electronic signature and the other uses an ink written signature, the document will still be considered valid. In short, both parties are not legally obliged to use the same technology to complete the document.
Is there a difference between a digital signature and an electronic signature?
Electronic signatures are electronic symbols that are attached to documents employed by people with the specific intent to sign. By contrast, digital signatures are designed to guarantee that electronic documents are authentic. However, both digital and electronic signatures can be considered binding.
Is an electronically signed document admissible as court evidence?
Both the courts of England and Wales now accept documents that were executed by an electronic signature as allowable. However, if English law doesn’t govern the document concerned, it is possible that the jurisdiction will not accept documents that have been electronically signed.
How can you avoid issues with electronic signatures?
Always check first if the proposed signatory of a document has the right to sign it. You should ensure that the signatory’s electronic signature is authentic in advance of any transaction. To stop third parties from signing documents without authorisation, you must also make certain that the electronic channels used are secure. If it is legally required, make sure that the document is properly witnessed.
Finally, when you file a document that has been executed with Companies House or another registry, always check that they accept electronic signatures prior to signing in order to avoid your submissions being rejected and your time wasted.
Is your company ready to adopt electronic signatures now?
At Galaxkey, our unique identity-based electronic signature feature removes all uncertainty. Electronic document signing makes certain confidential documents are only ever signed and viewed by the party you sent them to, whether the individual is within or outside your enterprise. Only those authorised can access documents and emails sent using our solution to satisfy the vital legal admissibility needs of sectors like insurance, banking, financial and legal services, along with healthcare and education.
Our user-friendly design facilitates the ability to add employ a wide range of advanced security features so your team can securely send contracts, invoices, or purchase orders electronically. This means no more scanning or printing or postal expenses, saving you time and money.
If you’re ready to start signing your documents securely and electronically, why not get in touch with our specialist team today and experience a demo and free 14-day trial?