Getting a contract wet signed (pen & ink) is becoming increasingly difficult when many clients are virtual, businesses do not have offices and the cost of postage outweighs the benefits.
In the construction industry, parties often start with the intention of getting a signed contract, but these good intentions are overtaken by just getting on with the job. It’s rare to find someone who finds paperwork more compelling than their actual job.
Do You Need A Signature?
Assuming we are not talking about a guarantee (which definitely requires a signature), the courts have had to grapple with how contracts are formed in the real world. Recently, they were asked to consider whether a contract existed when the estimate (offer) said it was not binding until signed, and it was never signed.
Generally, until either party acts on that estimate the court will uphold the ‘no signature, no contract’ statement.
However, once the recipient performs as contemplated by the estimate, the court will look at whether the parties were agreed on all essential terms. If so, a contract can exist, even if the relevant document was never signed.
The principles on how you can create a contract are:
- A contract is the acceptance of an offer
- You can accept by your conduct
- You can accept draft terms which are never signed
- You can waive your right to sign, and conclude a contract without your signature
- You can waive the requirement for both parties to sign (even if set out in the draft contract) by adopting another form of acceptance eg conduct
- A draft agreement can have contractual force once you agree all essential terms.
This echoes a run of cases which have upheld oral variations of a contract even where the contract stated it required written signed variations.
As a result, clear simple contract procedures are critical to ensure your company is only bound by terms when you are ready, when senior staff have approved the terms and you have agreed everything you think is essential. If you disagree with an offer, estimate or quote, you MUST reply.
Case: Reveille Independent Llc v Anotech International (UK) Ltd  EWCA Civ 443, [40-41]