Signing electronically explained

  • Signing documents electronically is now accepted for most documents, but there remain some exceptions.
  • In this article, we look at what documents can be signed electronically and what makes an electronic signature legally effective.
  • Temporary legislation to permit the execution of deeds and agreements by corporations, using electronic signature recently expired in many jurisdictions, with the reforms not being made permanent despite the best hopes of the legal industry and business groups.

Most of us have already signed at least one document via an electronic signature application, but you will have also been in situations where your solicitor has required you to sign a document in wet ink. In fact, having experienced electronic signature, you might be asking yourself, in this day and age, how can we still be signing documents in wet ink?

Understanding differences between legal documents

Contractual documents can generally be divided into two broad categories, deeds and agreements.

A deed is a document usually by that name or which states that it is signed as a deed. It is used for particularly important contractual relations, or contracts where a person covenants either unilaterally or without receiving consideration for their obligations. For example, confidentiality agreements, promissory notes and deeds of settlement of disputes, are usually drawn as a deed.

There are two critical requirements of a deed which matter from an execution perspective:

  1. A deed must be witnessed. Witnessing has long been held to require the witness to be physically in the presence of the signatory when the signatory signs the relevant document.
  2. A deed must be printed on paper, parchment or vellum. A deed which exists entirely in digital form, may not amount to a deed.

The other class of contractual document that exists broadly, is an agreement, and this class really encompasses all other documents entered into to create legal relations between two or more parties. The validity of a person's signature of an agreement can still be called into question, but the mandatory formalities of a deed do not apply, so these documents lend themselves to greater flexibility of execution.

 

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