Marshall Q&A – Topic 4: Signing Documents While Social Distancing

Question: Can I sign documents electronically? 

Short Answer: Yes – but it depends on the document and where you are. 

Key Takeaways:

  • Contracts often have no signature restrictions, but enforcement can be an issue.
  • Some states allow electronic signatures or witnessing on other formal documents.
  • Corporations temporarily have greater flexibility when executing documents.
  • In WA, formal documents must be ink-signed and witnessed in person.

A common question we receive from clients is whether they are required to physically sign documents, or whether they can indicate agreement electronically (e.g. via email). This has been especially common during COVID.

The short answer is that, apart from contracts subject to special requirements, commercial contracts have no fixed form.  They can be entered into by physical signature, by electronic signature, or even verbally.

Disputes tend to focus on the terms of the agreement, whether it exists or when obligations commenced. This is why, especially for important agreements, we recommend that terms and acceptance are documented clearly (i.e. in writing) and unequivocally.

The clearer the terms are described, and the greater the evidence that the parties intended to be bound by those terms, the greater the chance that the agreement can be enforced.

Other documents are subject to legislation which regulates the form they must take. Wills, mortgages, and court documents to name a few, have strict requirements on how they must be signed to be effective.

Some states (although not WA) have introduced legislation which allow both electronic signing AND witnessing of documents during COVID. If this change proves effective, it could become more commonplace, so watch this space.

Another change involves companies. Where normally companies need multiple directors or secretaries to physically sign the same document in order to execute it, temporary changes provide greater flexibility. Instead, these directors may:

  • Each physically sign a counterpart of the document; OR
  • Each electronically sign the same digital document.

This provides flexibility for companies whose directors might be stuck in different states, in lockdown, or simply unable to be at the same location.