In these difficult times of confinement, with movement of people and possibly postal services being shut down or heavily curtailed, is it possible to make use of electronic means to exchange contracts and complete a property purchase?

Under English law, a contract for the sale of land must be in writing, must incorporate all of the terms of the sale and must be signed by or on behalf of the parties to the transaction.  A transfer of land must be in the prescribed form, and must be executed as a deed.  Can either of these steps be achieved electronically?  It is accepted that a document emailed to a seller and a buyer which contains all the terms of the sale will satisfy the writing and incorporation elements, but what about the signing part?

Because there is no explicit statutory provision for an electronic signature to be a valid signature in documents relating to the sale of land, the cautious approach is to have a traditionally signed agreement, that is, a hard copy that has been signed in ink by all the parties to the agreement.  This is then held by each party’s solicitor, exchanged with the opposite party, and forwarded by post as a hard copy to be retained by that opposite party.  If one of the parties is unable to leave his house to deliver a traditionally signed agreement, or the postal service is not working, can he sign an emailed copy of an agreement and then exchange legally using a scanned copy to bring a binding contract into being?

Caselaw indicates that the strict requirements to bring a valid contract into existence can be satisfied by an exchange of emails which are ‘signed’ by virtue of the contracting parties’ ending the correspondence by adding their first names, or by one of the parties’ solicitors automatically inserting his name, occupation and contact details in an email footer.  These are not compelling cases, however, and turn on their individual facts.

Law Society guidance provides that if a mark inserted into an agreement gives (and, just as importantly, was intended to give) authenticity to the agreement, then the requirement that the agreement be signed is satisfied where the agreement contains an electronic image of the party’s signature, or where the agreement exchanged is a scanned copy of a document signed in wet ink.  There is no subsequent need for an additional wet-ink hard copy to be executed where an electronic document has been used, but this would be a good idea. The date of exchange can be added to a hard copy of an electronically signed document either manually or electronically.

The requirement for a transfer of land to be by deed means that the transfer document must be signed in the presence of a witness.  If the addition of an electronic signature will be acceptable, best practice is that the witness should still be in the physical presence of the signatory, however the signatory adds an electronic signature.  The witness can also sign electronically.  This physical presence is preferable to watching the signing remotely by video conference in case there is a challenge later as to the validity of the transfer.

So, in the absence of clear statutory provision or caselaw guidance, the cautious advice would be to stick to the traditional methods of signing all documentation relating to the sale of land in ink on paper documentation.  However, in these difficult times, it may be possible to rely on documentation signed electronically.  Standard undertakings given between parties’ solicitors may need to be adapted to provide for hard copy documentation to be forwarded as soon as possible.