It is generally agreed that contracts may be signed electronically, and the use of electronic signature platforms such as DocuSign to execute contracts is commonplace.
Electronic signatures are less widely used for deeds, and we have yet to see a case that confirms that a deed may be signed electronically. Some practitioners therefore take a cautious approach and recommend that deeds are signed in manuscript.
During the coronavirus outbreak, however, insisting on wet-ink signatures may cause difficulties, and parties may prefer to use electronic signatures. Would this be valid for deeds?
Both the Law Society and the Law Commission are of the opinion that an electronic signature may be used to execute a deed, provided that the deed is in writing, the signature is inserted in the deed in order to authenticate it, and the signature is witnessed as required.
Since writing is defined by statute to include ‘modes of representing or reproducing words in a visible form’, it is considered that a deed will be validly signed if the signatory:
The first option – a typed signature – is not recommended for deeds, since there is little to distinguish a genuine signature from a forgery.
It may be considered best practice to use an electronic signature platform, since in case of dispute the metadata will provide corroborative evidence as to who signed the document and when.
If a deed is executed by an individual, the individual’s signature must be witnessed. It is necessary for the witness to be physically present with the signatory when the deed is signed (whether in manuscript or electronically): witnessing by video is not thought to be acceptable. The witness must attest the signature by signing the deed themselves, and may sign electronically in the same way as the signatory.
During the coronavirus lockdown, it may difficult for a signatory to sign in the presence of an independent witness. In these circumstances, it may be appropriate to ask a family member to witness the signature. An independent witness is usually preferred for evidential reasons – if, say, a woman has signed a deed with her husband as witness, it may be necessary to call him to give evidence against her if she later denies having signed. But there is no rule of law against using a family member as a witness, and a deed will be validly executed if witnessed in this way. The witness should be aged 18 or over.
If a company is to execute a deed, it may be preferable to use the alternative method of signature by two directors, or by one director and the company secretary (rather than by one director whose signature is witnessed). This is straightforward and avoids the need for witnessing altogether. The directors may sign electronically and do not need to sign the same copy. A limited liability partnership may similarly execute a deed by signature of two members.
It may be worth checking with the other parties to the deed that they will accept an electronic signature, or witnessing by a family member, before proceeding.
If a signatory has access to a printer and scanner, they may prefer to sign in manuscript and send a scan of their signature by email. If this method is used for a deed, it is necessary for the signatory to attach the full text of the deed, as a Word or pdf file, as well as a scan of their signed signature page, to the same email, to associate their signature with the deed.
Finally, it is worth noting that certain documents must still be signed in manuscript, including the following:
Where shares are transferred for a purchase price of more than £1,000, it is usually the case that the stock transfer form should be signed in manuscript, because HMRC will accept only an original manuscript signature for stamping. This rule has been relaxed during the coronavirus outbreak, however, so that a stock transfer form may currently be signed electronically.
Ashfords can arrange for documents to be executed using DocuSign on request. It is not necessary for signatories to have a DocuSign account – all that is needed is an email address for each signatory.
For more information on the article above please contact Brendan Biggs or Andrew Betteridge
We produce a range of insights and publications to help keep our clients up-to-date with legal and sector developments.
Sign up
