29.08.2018

Law Commission says E-signatures as valid as hand signatures

Contracts and sales transactions have been hand signed for hundreds of years, but the traditional written signature could be nearing its end as the Law Commission has ruled that it can be replaced with a typed name.

The Government's independent legal adviser has issued guidance stating that e-signatures can be treated as equivalent to written ones.

Currently many businesses are afraid to use e-signatures because they are concerned they could be challenged in court due to the contracts not containing an audit trail. 

In one case, the Commission said, “a large organisation has its documents signed manually before scanning them and then shredding the originals, a practice it described as inefficient”. 

Electronic signatures can take forms including a typed name, clicking on "I accept" on a website, using a finger or stylus to sign on a touchscreen and using a password or PIN. 

This decision raises the prospect that an email with a name typed at the bottom of it or even an email header could be treated as a signed document. 

The Commission has opened a consultation on whether a new law is required to legally enshrine the validity of e-signatures, but said it is "not persuaded at present" that this is necessary in England and Wales, because the law is already in force. 

"Our provisional view is that the combination of EU law, statute and case law means that, under the current law, an electronic signature is capable of meeting a statutory requirement for a signature if an authenticating intention can be demonstrated," the Commission said.

The law commission said recent rulings made in the High Court and Court of Appeal set enough of a precedent for there to be no need for a new law, and European law also says that e-signatures should not be treated as less effective than physical ones. 

It also suggested that in future signing could be witnessed via webcam or Skype, something which the law does not currently allow for. 

Frama RMail not only provides a platform for creating a document with and e-signature option, but also provides peace of mind with 256-bit encryption and legally verifiable proof of delivery and content as standard.

Contact Frama today to find out how your business can expedite contract signing and improve efficiencies.