Do E-Signatures Count? What the Law Says
- 4 days ago
- 8 min read
Historically, people would sign a document in person and either carbon copies on different coloured paper or photocopies would be taken as proof. Electronic signatures are now a routine feature of the modern world. They accelerate transactions that once depended on printers, couriers and wet ink. However, while the technology is straightforward, the legal position is often less so. Questions arise: when does a typed name, a scanned signature or a click of a button amount to a binding signature under the law of England and Wales? The inverse is also just as important: when does it not?
This post explores the legal framework underpinning electronic signatures, the limits of their validity, and the practical risks that practitioners and clients alike should keep in mind. Throughout the article, the terms "electronic signatures" and "e-signatures" will be used interchangeably, with no difference in definition being applied.
As always, this post should not be intended to be legal advice and should not be construed as such; it is for information and educational purposes only and therefore readers are always strongly encouraged to seek professional legal advice for their own matters.
Validity and Admissibility
The position of the law of England and Wales is that electronic signatures are legally binding in England and Wales. This applies to most commercial and consumer contracts. There are three relevant pieces of legislation on e-signatures:
The Interpretation Act 1978 ('the 1978 Act');
The Electronic Communications Act 2000 ('the 2000 Act'); and
An EU Regulation (910/2014 on electronic identification and trust services for electronic transactions in the internal market) ('eIDAS') which has, since Brexit, been implemented into domestic law. eIDAS distinguishes between the three levels of electronic signature, with "Simple Electronic Signature" being the most rudimentary. The second is "Advanced Electronic Signature" which is more sophisticated technologically (requiring a link between the signature and the signatory), and finally a "Qualified Electronic Signature" which is the most secure form as it satisfies certification and trust provider requirements. The difference between the three is, in essence, that of weight; the more secure, the more reliable.
The 1978 Act does not include a definition of "signed" or "signature". The understanding around what constitutes a signature is therefore a creature of common law. The courts have taken a pragmatic approach as to what a signature is and have upheld the validity of a wide variety of methods.
Helpfully, the 1978 Act provides a definition of “writing" which applies to situations where the parties wish to enter into a contract, but it is subject to a statutory requirement for writing and signature, The 1978 Act for "writing" includes typing, printing, lithography, photography and other modes of representing or reproducing words in a visible form (unless the contrary intention appears) see: Section 5 and Schedule 1. Therefore, where the 1978 Act definition applies, a statutory requirement for writing will generally include emails and website trading.
What Constitutes An Acceptable E-Signature?
A careful reading of section 7 of the 2000 Act shows that it does not actually define “electronic signature” in any technical or exhaustive way. This is because it is rather broad and could become restrictive in future should newer technologies be established. At present, an e-signature can take many different forms, such as:
The signatory typing their name or initials at the bottom of an electronic document, such as an email, or in the signature block of a Word document.
A scanned handwritten signature that is incorporated into an electronic document, or pasting an image of a manuscript signature into an electronic document.
Clicking an "I accept" or "I agree" button on a website.
Using a stylus or finger to sign an electronic document via a touchscreen or digital pad.
Using a web-based e-signing platform such as Adobe Sign or DocuSign.
The 2000 Act provides a functional, evidential concept. Under section 7(2), an electronic signature is any electronic mark or process that is "incorporated into or logically associated with" a document and capable of being used as evidence of authenticity or integrity. However, its legal effect depends on the surrounding circumstances.
The terms "incorporated into" and "logically associated" differ in that:
When considering whether a signature is "incorporated into" the agreement, typically the Court will be looking at whether the signature is embedded in the document (e.g. PDF signature image).
As to the question of whether it is "logically associated", the focus will be on whether the signature is linked externally (e.g. database record, audit trail)
Evidence in Court
It is also worth noting that e-signatures are generally admissible in court as evidence. However, there must be an "intention to authenticate" the document. This is reflected in the Law Commission's paper titled "Electronic Execution of Documents". Therefore, the questions to be asked are as follows:
Did the person signing the document intend to authenticate the document (intend to sign and be bound by it)?
Are the relevant formalities relating to execution of that document still satisfied?
The test to be applied when deciding whether there was an intention to authenticate is an objective one, not a subjective one. The Court will therefore ask what a reasonable observer would understand in the circumstances, not what the signatory privately intended. It is critical to understand that this test is applied on a case by case basis, and context will therefore be everything. This is because the same act might be a signature in one context (such as a final agreement email) but not be a signature in another (informal discussion).
Case Law
There is also case law on the topic of electronic signatures which provide a helpful insight into the Court's rationale and perception of e-signatures:
Electronic documents are generally (but not always) capable of satisfying a statutory requirement for writing under the Interpretation Act 1978. For example, the following two cases (NB: whilst they are maritime law cases, the principles to be distilled from them are of general application):
Golden Ocean Group v Salgaocar Mining Industries PVT Ltd [2012] EWCA Civ 265. In this case, which concerned, the Court of Appeal held that the requirement found in section 4 of the Statute of Frauds 1677 for a contract of guarantee to be "in writing" could be satisfied in principle by reference to a sequence of negotiating e-mails or other documents of the sort which was commonplace in ship chartering and ship sale and purchase.
J Pereira Fernandes SA v Mehta [2006] EWHC 813 (Ch)). The High Court on this occasion held that an email had amounted to a "note or memorandum" for the purposes of section 4 the Statute of Frauds Act 1677. However, the automatic inclusion of the sender's email address after the document had been transmitted had not amounted to a sufficient signature.
Electronic signatures are capable of satisfying a statutory requirement for a document to be signed where there is evidence that the signatory intended to authenticate the document. For example:
Bassano v Toft [2014] EWHC 377 (QB) - On this occasion, the High Court held that a regulated agreement within the meaning of the Consumer Credit Act 1974 could be concluded electronically. There was nothing in the Consumer Credit Act 1974 to suggest that regulated agreements should not be capable of electronic signature, and there were no policy reasons why a signature could not be affixed and communicated electronically. In this case, the words "I Accept" appeared and were held to be sufficient. A signature could be a letter or an unambiguous description of the signatory. The word "I" was the individual's mark, and constituted a good signature in the designated space.
WS Tankship II BV v Kwangju Bank Ltd [2011] EWHC 3103 (Comm)). The High Court held that the automatic addition of a party’s name to a header (by utilising the SWIFT system) was caused by the sender. Accordingly, this constituted a sufficient signature for the purposes of creating an enforceable guarantee pursuant to section 4 of the Statute of Frauds (as above). Similarly to Bassano (above), this case highlights electronic signatures are capable of satisfying a statutory requirement for a document to be signed where there is evidence that the signatory intended to authenticate the document.
In Green (Liquidator of Stealth Construction Ltd) v Ireland [2011] EWHC 1305 (Ch), the High Court was tasked with deciding whether a binding contract to charge a property had been through a series of emails. While the Court held that no contract arose in the instant case, it nevertheless accepted that, in principle, a string of emails containing the typed signatures of the parties was capable of creating a contract under section 2 of the 1989 Act.
The most recent decision of Neocleous v Rees [2019] EWHC 2462 (Ch) is an interesting one. The Manchester County Court found that an automatically generated email footer containing the name and contact details of the sender constituted a signature for the purposes of section 2(3) of the Law of Property (Miscellaneous Provisions) Act 1989 (the 1989 Act'). Whether an electronic signature will satisfy the signature requirement in section 2 of the 1989 Act has not been addressed in either the statute itself, nor has it been previously tested before the Court. It was held that, looking at the matter objectively, the presence of the name indicated a clear intention to associate the sender with the email, to authenticate it or to sign it.
Summary, Practical Considerations & Future Gaps
The 2000 Act does not ask what kind of e-signature is used. Instead, it asks whether the method used proves who signed and what they intended by their signature.
Section 7 does not say that e-signatures are automatically valid and that they are equivalent to handwritten signatures. Further, it does not state that e-signatures satisfy all legal formalities. There is a subtle difference: the 2000 Act ensures that e-signatures cannot be excluded simply because they are electronic.
Instead, it is necessary to prove that the e-signature was either incorporated into or logically associated with the document in question. It is a low threshold to surpass, but it does have potentially catastrophic consequences either way.
Because of this, a party will still need to prove who signed the document and what they intended. In those circumstances, the Court will ultimately fall back on ordinary evidential principles, not a bespoke statutory regime.
A point which is parasitic to the above to some extent is that it is important to consider how trustworthy, secure and reliable the technology used to create it is. This is why eIDAS appears to differentiate between three standards of signature. For example, a typed name at the end of a document is very easy to forge. As a result of that, there is always an increased chance for fraud and issues of authority may arise.
It is always therefore beneficial to have an audit trail to support any contentions as a belts and braces approach.
A legal person, such as a company, cannot use an electronic signature. If a company in the UK wishes to execute a simple contract or deed using an electronic signature must do so in accordance with sections 43 or 44 of the Companies Act 2006.
There are still some gaps which exist, particularly in relation to deeds. There is a lack of clarity on remote witnessing, whether witnesses must be physically present and how exactly electronic attestation can operate. It is likely that due to this, there is a distinct possibility of a change in the law as society moves ever close to totally electronic documents.
One matter which needs to be considered strongly is AI and delegated execution. What happens with AI agents sending acceptance emails, or auto-sign workflows? In those circumstances, who can be said to be the "signatory" for the purposes of the above? There is also the additional question of whether AI will ever truly be able to hold the same level of authority as a physical being. This is a significant issue, which should be addressed sooner rather than later given the surge in AI usage.
This post should not be intended to be legal advice and should not be construed as such; it is for information and educational purposes only and therefore readers are always strongly encouraged to seek professional legal advice for their own matters.
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