The technology to allow parties to a contract to sign, execute, witness and complete contracts without leaving their home office is not new. However, with nearly 50% of the UK working from home, the time for electronic or digital signatures is ripe.
Rather than considering the relative merits of the different platforms, lawyers need to consider the practicalities and legalities of virtual signatures.
Is it legal?
The laws surrounding e-signatures have been slowly catching up with rapid pace of change, especially since the start of national lockdowns. However, an interactive map is available (from CocoSign) setting out which jurisdictions support e-signatures.
In the UK, one stumbling block is when a document requires a signature to be witnessed. Witnesses need to be in the same room and sign within minutes of the signatory. It is not possible to witness through live video links [read more]. The preference is therefore for an adult family member who is not also an officer of the company to witness, rather than risk the signature not being validly witnessed.
Is it practical?
For many platforms, documents need to be uploaded individually and have a maximum file size before a new folder or envelope has to be created. For construction contracts, this can be a major hurdle as the works documents, drawings, price breakdown, programme are rarely compressed and can require multiple folders or envelopes to be created.
Once the contract is created, things become easier. The fast signing and simultaneous distribution of the dated and completed contract ensures the project team has the information it needs at the very start of the project – without waiting for copies to be made and distributed.
The contract is also much easier to access from site or when working from home. This minimises the risk that it is just shoved into a drawer or left of a shelf to get dusty!
What should you do?
To reduce the practical hurdles, consider how you can simplify your contracts to make the job of collating the contract documents as painless and speedy as possible.
For legality, check the map to see if it will be possibe in the relevant countries you contract with. Internally, make sure staff know who can sign what type of contracts (or to what value). Externally, clarify who has the appropriate levels of authority so that contracts are sent to and signed by the right people.