The traditional way of completing a legal document is to sign a paper copy with a pen and then to deliver it to us. We can then use it to exchange a contract or complete a deed such as a lease or a transfer of land. Owing to the Coronavirus many offices and businesses are now closed or have only a skeleton staff.
In these circumstances the traditional method of signing documents may be difficult or not viable owing to the personnel who normally sign not being in the office. This note discusses some options as to how you can process legal documents which you need to send to us in the current circumstances.
Signing contracts or executing a deed – the difference
You need to appreciate the difference between what lawyers call “a document signed under hand” and a deed. A document signed under hand is a document like a contract or agreement. Usually only one signature is needed from any party entering into the contract. The rest of this note will refer to a document signed under hand as a “simple contract”.
Take an example of A and B which are companies and wish to enter into a simple contract. In terms of signatures all that is needed is that one director from A and B sign the contract.
Although I am using the word “contract” there are documents which are not usually called a contract which come within the definition. For example, a lease for 3 years or less or a licence to assign can be a simple contract.
In contrast the formalities for signing a deed are more complex. Depending on how an organisation normally signs a deed this will involve:
- the use of a corporate seal with two authorised persons signing the deed [though the written constitution of some corporations may allow just one person to sign];
- signature without a seal but with two officers of the company signing; the officers will be directors or a company secretary;
- signature without a seal with just one company officer signing but in this instance a witness must also sign to say that they witnessed the officer signing the deed in their presence.
The law requires a document to be a deed in certain instances such as a conveyance transferring land or the grant of most leases. Lawyers refer to the “execution” of a deed when dealing with how it is signed whereas they tend to refer to the “signing” of a simple contract.
You can see from the above that the formalities for executing a deed are more challenging in the current coronavirus shutdown than for a signature of a simple contract.
What are your options for processing legal documents if the people who normally sign the documents are not readily available?
The options are methods such as appointing an agent to sign simple contracts, granting a power of attorney to someone outside your organisation to allow them as an attorney to sign simple contracts or execute deeds on your behalf, scanning and emailing to us a signed copy of a contract or signing documents electronically.
Appointing an agent to sign a simple contract
If A wishes to enter in to a simple contract with B, they can appoint C as their agent. C can then sign the contract on behalf of A. In doing so C has no rights or liabilities under the contract. Instead A has the rights and liabilities. An agent can be a lawyer or a firm of surveyors if you employ one to manage your properties. This method can be used to sign a contract to buy or sell land or in short term lettings of residential or business premises. It can also be employed in documents which traditionally are executed as a deed but where they can take the form of a simple contract. An example of this is a licence issued under a lease where the landlord consents to the tenant transferring the lease, sub-letting the property or making alterations to it.
Power of attorney
If you want someone from outside the organisation like a lawyer to execute deeds for you, you must grant a power of attorney to them. The attorney can then execute deeds or sign simple contracts on your behalf. If you are interested in this we can draft a power of attorney for you and advise on how you go about granting it.
Signing a paper contract and then scanning it and returning it to us by email
When we have agreed a contract on your behalf we will send you a paper copy for signature or we may attach the agreed contract to an email. If we send the contract by email, you will need to print it off and then sign it. You can then scan the signed contract and attach it to an email which you send to us. We can then print this off at our end and use it to exchange the contract with the lawyers who act for the other party to the contract.
Contracts can be lengthy and contain large attachments like architects drawings. You may therefore not want to print off and scan complete contracts. To avoid this we can include a signature page with any contract we send you by email. This allows you to print off just the signature page which you can then sign. Having done that you scan the copy of the signed signature page and return it to us by email. We print that off at our end and attach it to the agreed form of contract in preparation for exchange. However, for this to work you need to follow a particular format of email when you return the signature page to us. We can advise you what this is at the time.
Use of electronic signatures
There are a range of electronic signatures from the very simple to the sophisticated. At its most basic it can be opening a word document and typing your name in the correct space on the signature page. At the other end of the spectrum it might be use of an online platform with software to check the identity of the signatory and the use of digital signatures.
In general electronic signatures can be used to sign documents as long as the person who signs has the authority to sign on behalf of the contracting party. If you want to rent a flat nowadays for a short term letting, the chances are that you will asked to sign the letting agreement on an online platform maintained by the letting agent. So this is a choice open to you for simple contracts.
For deeds the position is less clear. Firstly the Land Registry does not accept deeds executed electronically other than e-mortgages which can only be created through the Registry’s own online platform. So one cannot electronically sign Land Registry transfers, legal mortgages, deeds which create easements and leases which require registration at the Land Registry.
As for deeds which do not need registration at the Land Registry, it is possible to execute these by electronic means. However, there is a difficulty. The signature of the person executing a deed usually has to be witnessed. The witness must be physically present when that person signs the deed. It is not possible for the witness to view the use of the electronic signature remotely via something such as a video link. If this obstacle can be overcome, it is possible to execute a deed electronically. This assumes that the person with legal capacity executes the deed such as a company director. In addition, if a foreign entity is a party to the deed or a simple contract one must be sure that the law in the foreign entity’s home country recognises the validity of electronic signatures in the same way as English law does.