173: Law Commission confirms e-signatures are valid under current law
Electronic signatures can be used to execute legal documents including where there is a statutory requirement for a signature, as recently confirmed by the Law Commission. This means that in most cases electronic signatures can be used as a viable alternative to handwritten ones.
The Law Commission has set out an option for the reform of law of e-signatures, which is currently seen to be uncertain and not fit for purpose. Until now, it has been unclear whether electronic signatures are legally valid when used to sign documents and how the process of using an electronic signature should work.
An electronic signature is capable in law of being used to execute a document (including a deed), provided that the signatory intends to authenticate the document and that any relevant formalities, such as the signature being witnessed, are satisfied. The intention to legally bind the parties is one of the key points that should be identified for parties in order to rely on the validity of an electronic signature.
In a recent report, the Law Commission set out a statement of the law around electronic signing which stated:
‘Our report aims to provide an accessible statement of the law which makes it clear that an electronic signature can generally be used in place of a handwritten signature as long as the usual rules on signatures are met.’
The courts have considered electronic signatures on a number of occasions and have accepted electronic forms of signatures including a name typed at the bottom of an email or clicking an ‘I accept’ tick box on a website.
The Law Commission’s current recommendations to improve and consolidate this area of law are to:
- create an industry working group to produce a best practice guide which will look at practical and technical issues for electronic execution;
- look at solutions for video witnessing of deeds and allow for legislative reform for this;
- review the law of deeds and consider whether the concept of signing as a deed is still fit for purpose.