The Law Society has publicly endorsed the use of electronic signatures in English law commercial transactions, a move welcomed by DocuSign and the 85 million users of its global electronic signature platform. Prepared jointly with The City of London Law Society, The Law Society’s new practice note confirms that electronic signatures are a valid method of executing commercial contracts under English law. Hard on the heels of the eIDAS Regulation (EU No 910/2014) which came into force on 1 July 2016 establishing an EU-wide framework for electronic signatures, the practice note will spur greater adoption of electronic signatures and boost the digital transformation of business across the EU.
The Law Society practice note has been developed to give parties (and their legal advisers) greater confidence to adopt electronic signatures over manual, paper-based processes – and reap the benefits of agility, efficiency, cost savings and superior user experience.
Elisabeth Wall, Chairwoman of the Law Society Practice Group, said: “Although e-signatures have been in use for some time, there has been no consensus among the legal industry on their validity. This practice note will help the industry get comfortable with electronic signatures and embrace the practical benefits of e-signing.”
Law Society president Robert Bourns said the practice note will provide solicitors with greater certainty when using electronic signatures on commercial contracts: “Solicitors are eager to take up any opportunity to innovate, and this practice note will help guide them in making ever-increasing use of this small but significant improvement”
Validity of electronic signatures
The practice note highlights how – as market practice and technology evolves – the use of electronic signatures has become increasingly common in a range of commercial transactions, and this trend is set to continue. An electronic signature can take many forms:
- Typing a name into a contract or into an email containing the contract’s terms;
- Clicking an “I accept” button on a website;
- Pasting a signature into an electronic contract; and
- Generating an electronic representation of a handwritten signature used a web-based electronic signature platform.
All forms of electronic signature may be used to execute simple contracts and also documents which are required by English statute to be “in writing” or “signed”.
Section 7 of the Electronic Communications Act 2000 provides that electronic signatures are also admissible in legal proceedings to establish the authenticity or integrity of an electronic communication. But the evidential weight given to an electronic signature will depend on the circumstances in which it was created and the steps taken to verify the identity of a signatory. And this is why businesses are increasingly turning to electronic signature platforms which offer a higher level of security and authentication of signatories for transactions in the UK, the EU and beyond.
The benefits of using an electronic signature platform
According to Richard Oliphant, General Counsel EMEA at DocuSign, the Law Society practice note will boost adoption of electronic signature platforms: “There has been little case law on electronic signatures in the UK. I therefore welcome the Law Society’s initiative in publishing this practice note. It gives lawyers (and their clients) real confidence that they may use an electronic signature to create valid and enforceable commercial contracts under English law. But modern, sophisticated businesses are embracing digital technology. They require an electronic signature which offers a high level of authenticity and this is where an electronic signature platform has the edge: the electronic signature will carry more evidential weight in the unlikely event that the validity of the signature is challenged in court.
“In fact, the DocuSign platform does more than merely generate an electronic signature. It allows you to prepare, execute and manage the lifecycle of business transactions in a fully digitised environment. You have access to a real-time audit trail; you can track every step of the transaction, who signed, when they signed, and – in some cases – where they signed. It delivers the “proof” of signature that you can rely on in court to establish the authenticity and integrity of the electronic contract.”
For more information, read the Law Society press release or the practice note can be viewed in full here. Or to learn the facts about current eSignature laws, local legal systems and electronic signature technology preferences in your region visit our eSignature Legality Guide.