Increasingly contracts are being signed electronically. A recent case held that even an automatically generated email signature constituted a "signature" and therefore meant the email exchange was contractually binding.
However, those of us in real estate still require many of
transactions we deal with to be signed not just as a contract but
to be executed as a deed to comply with statutory. land registry
and common law requirements.
The main difference between a deed and other forms of contract is
that there are additional execution formalities for the instrument
to be enforceable. Statute demands the use of a deed for
transactions (amongst others). involving transfers of land,
registerable leases and mortgages Whilst common law requires a deed
for any agreement that is made without consideration or an
agreement including an express release or variation of certain
rights. If a deed is required and the execution formalities
necessary, are not complied with then the legal validity of the
relevant agreement or transaction may be challenged.
In the past deeds were commonly executed by being signed and the
application of a wax seal hence agreements being signed, sealed and
delivered. Now it is more usual practice for deeds to be executed
by the signatory signing in the presence of a witness who must then
sign and enter their address. In a recent case it was claimed that
a mortgage was not valid, as not only was it necessary for the
borrower to sign in the presence of the witness but that the
witness too had to sign and enter their details in the presence of
the borrower. The High Court held that this was not the case and in
order to be an enforceable deed there was no requirement for the
witness to sign in the presence of the executing party.
It is widely anticipated that at some point in the future the
formalities required to execute documents will be reformed but
until they are those of us in real estate will still need to ensure
that any necessary execution formalities are complied with.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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