Sign­ing on the dot­ted line may soon be con­signed to his­tory

Yorkshire Post - Property - - PROPERTY - Katy Barker

MO­BILE tech­nol­ogy has be­come a nor­mal part of life and, un­doubt­edly, e-com­merce is grow­ing and there are now more mo­bile de­vices on the planet than there are tooth­brushes.

Tech­nol­ogy is read­ily avail­able, al­low­ing a per­son to elec­tron­i­cally “sign” a doc­u­ment. The ques­tion is does an elec­tron­i­cally signed doc­u­ment sat­isfy the re­quire­ment for a prop­erty doc­u­ment to be “in writ­ing” and “signed”? First we have to ask: what is a sig­na­ture?

A sig­na­ture is the manuscript ad­di­tion of the party’s name to a doc­u­ment to in­di­cate agree­ment to, and will­ing­ness to be bound by its terms. Elec­tronic sig­na­tures come in many forms, in­clud­ing:

Scanned sig­na­ture – a manuscript sig­na­ture is scanned and trans­formed into dig­i­tal for­mat, which can then be at­tached to an elec­tronic doc­u­ment;

Bio­dy­namic ver­sion of a manuscript sig­na­ture – a spe­cial pen and pad is used to mea­sure and record the ac­tions of the per­son as they sign. A dig­i­tal ver­sion of the manuscript sig­na­ture is then cre­ated and can then be at­tached to elec­tronic doc­u­ments;

A dig­i­tal sig­na­ture us­ing cryp­tog­ra­phy (us­ing a key pair – pri­vate and pub­lic key). The sen­der af­fixes the sig­na­ture us­ing their pri­vate key and the re­cip­i­ent checks the sig­na­ture with the pub­lic key;

The “click­ing” of a but­ton, like the ‘I ac­cept’ but­ton used when buy­ing goods or ser­vices on-line.

To achieve a com­pa­ra­ble level of cer­tainty to a manuscript sig­na­ture, an elec­tronic sig­na­ture needs to be: unique to the sig­na­tory; ca­pa­ble of iden­ti­fy­ing the sig­na­tory; cre­ated un­der the sig­na­tory’s sole con­trol; and ca­pa­ble of be­ing linked to the doc­u­ment or data so that any sub­se­quent changes are de­tectable.

Clearly, it is im­por­tant that a rep­utable form of elec­tronic sig­na­ture is used.

The Elec­tronic Com­mu­ni­ca­tions Act 2000 per­mits con­tracts to be con­cluded by elec­tronic means and pro­vides for the ad­mis­si­bil­ity of elec­tronic sig­na­tures in le­gal pro­ceed­ings. This means that a per­son can validly “sign” a doc­u­ment with­out the need for a “wet ink” sig­na­ture.

A Law Com­mis­sion pa­per pub­lished in 2001 con­cluded that the re­quire­ments for a con­tract to be in writ­ing and/or signed can be ful­filled via elec­tronic means.

The test for whether sig­na­ture re­quire­ments are met is whether the con­duct of the sig­na­tory in­di­cates an au­then­ti­cat­ing in­ten­tion to a rea­son­able per­son ( i.e. is there clear ev­i­dence that the party sign­ing the con­tract in­tended to agree to the terms of the con­tract).

Fur­ther, re­cent case law sug­gests that the courts will up­hold the use of elec­tronic sig­na­ture. They will con­sider whether the method of sig­na­ture used ful­fils the func­tion, rather than one which was com­monly recog­nised.

So, pro­vided the other el­e­ments of sec­tion 2 of the Law of Prop­erty (Mis­cel­la­neous Pro­vi­sions) Act 1989 are sat­is­fied (in par­tic­u­lar the need for all the terms of the con­tract to be in­cor­po­rated in the doc­u­ment) it would ap­pear that prop­erty con­tracts can be signed elec­tron­i­cally.Deeds, the Land Reg­istry and the fu­ture of elec­tronic sig­na­tures

The above com­ments purely re­late to con­tracts as op­posed to deeds. The po­si­tion is presently un­clear as to whether a deed can be validly ex­e­cuted us­ing an elec­tronic sig­na­ture. Ac­cord­ingly, best prac­tice in re­la­tion to deeds is to as­sume that an elec­tronic sig­na­ture will not be valid. Cau­tion also needs to be ex­er­cised where a doc­u­ment re­quires reg­is­tra­tion at the Land Reg­istry.

Cur­rently, the Land Reg­istry does not ac­cept elec­tron­i­cally signed doc­u­ments for reg­is­tra­tion. Whilst to date there has been a rel­a­tively low use of elec­tronic sig­na­tures in prop­erty trans­ac­tions,it seems likely to in­crease in the fu­ture.

Katy Barker is As­so­ci­ate Lawyer at Pen­ning­tons Manches LLP

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