The event of all parties to a transaction gathering in one place to execute all necessary documents was rare, even before COVID-19 and the lockdown. However, the current circumstances and the likelihood of social distancing being with us for some time into the future have made this an impossibility. Fortunately, through previously developed methods, and recent confirmations by the Government, there are plenty of sound alternatives to, ensuring compliance with any formalities in the documents execution, and safeguarding legal validity and enforceability.
So how will we complete your transaction?
The first step is to circulate all the documents to all parties for signature (if the documents require this as a formality). The Law Society has published guidance as to what they consider good practice in their practice note “Execution of Documents by Virtual Means”. This practice note outlines three possible options to send the documents to all other parties by electronic means. We will confirm with you and all other parties which option is appropriate and agree the necessary arrangements.
For more details about the three options and the legal formalities required for different documents, click here.
Although the options outlined by The Law Society dictate the processes that we can choose from, they do not resolve issues which the current circumstances impose on some of the required formalities. One of which is the form of the signature.
Once the documents have be finalised and sent to all parties, depending on the type of document, they may need to be signed by an authorised party who has capacity. Typically, this will be the signatory’s “wet ink signature”; however, this may not be possible currently. The following options have legal validity:
- The solicitors signing on behalf of their client (for simple contracts only); and
- The signatory using an electronic signature.
For more detailed information regarding legalities surrounding electronic signatures and what constitutes such, please click here.
The next formality that can arise, and which is perhaps the most difficult to overcome, is the need for a witness. When executing documents such as deeds, they need to be signed in the presence of a witness, who is required to witness the signature and attest that the party signing intended to be bound by the terms of the document. As such, we will first consider whether the document needs to be a deed, which requires a witness. If we believe that it does, the Law Commission has determined that a witness can also use an electronic signature while signing documents. In the presence of a witness has been deemed to mean in the physical presence of the witness. At the moment, video link witnessing has not currently been granted legal validity. During the current lockdown, and at a time of social distancing, finding a witness to be physically present may be understandably difficult. The following are possible options in finding a witness, however, these are not recommended and should you should seek legal advice about the particular situation to determine what is appropriate:
- Witnessing at Distance: The first and best option is to have a witness physically present. This can be done with a two metre distance, so long as the witness can see the signature and the document that is being executed. Case law has established that a neighbour witnessing over a fence or through a window has legal validity;
- Family: A spouse or family member is not prohibited from witnessing a document, however this is not recommended for evidential reasons.
- Later: A witness can sign later; their signature does not need to be at the same time as the signatory. Again, this is not recommended for evidential reasons.
For more details on witnessing click here.
In the current lockdown, executing documents is slightly more challenging than usual. However, with a combination of the use of one of the three options outlined above, electronic signatures, and options surrounding witnesses, electronic execution is a sound alternative.
For help with your transactions during this difficult time, please contact our commercial team by emailing email@example.com or call 01202 786183.