Enhance Customer Experience & Accelerate Revenue.
To fully appreciate the ability of electronic contracts and signatures to streamline your contracting process, we need to get back to basics.
What is a contract?
With some notable exceptions (contracts for the sale of land and shares, guarantees and assignments of some IPR), the general rule of English law is that contracts may be made informally. Common law rules built up over many years govern whether there is a binding contract or not, and it is the substance and not the form which is important (you are familiar with these rules: offer, acceptance, consideration, intention to create legal relations and certainty of terms).
As a matter of law, a contract does not need to be printed out using up reams of paper, in duplicate or triplicate, signed at the end, initialled on every page and then maintained safely in perpetuity in a level arch file on a shelf.
So what about signatures?
The most commonly understood and accepted form of signature involves a person signing their name with their own hand on a piece of paper. However, the courts have upheld a variety of ways of making a signature, just ask Gordon Ramsay (Mr Ramsay’s signature placed on a lease by a signature writing machine operated by his father-in-law was binding on Mr Ramsay even though he said in court he knew nothing about it).
Case law indicates that whether the mark which appears in a document amounts to a signature depends upon whatever was used was inserted into the document in order to give, and with the intention of giving, authenticity to it. It must have been intended as a signature – the test is one of function, not form.
On 1 July 2016, the EU Electronic Identification Regulation (EIR) came into effect which endeavours to further promote the use of electronic signatures (among other things). It will require some secondary legislation, but much of the necessary detail is set out in various implementing acts passed during 2015 and the EIR broadly maintains the position under the existing E-Signature Directive in any event – an electronic signature should not be denied legal effect and admissibility as evidence in legal proceedings just because it is electronic.
If a party creates and sends an electronically created document including an electronic signature, he/she will be treated as having signed it to the same extent he/she would in law be treated as having signed a hard copy of the same document using a “wet-ink” signature. The fact that the document is created electronically as opposed to a hard copy makes no difference.
You could and should use electronic contracts and encrypted digital signatures to speed up your contracting process with suppliers and customers.
At Paratus Law we use electronic documents, secure collaborative workspaces and encrypted digital signature process designed to speed up your contracting process, enhance your customer experience and accelerate revenue.
For more information on how we can help your organisation with affordable contract outsourcing, please get in touch.