Negotiation of construction documents can be a long and complex process, therefore it is not surprising that parties are often relieved when documents are finally agreed and signed.
In that context and given the hard work that has gone into reaching a concluded agreement, it is with surprising regularity that we see documents returned to us that are incorrectly executed. A couple of recent examples include signing directly on the "Sign Here" tab and completing the signing block absent the required signature!
With that in mind, a refresher on signing construction documents to ensure both formal validity and self-proving status is achieved under Scots law is helpful.
In Scotland, while strictly speaking only certain agreements require to be made in writing and comply with the formal execution requirements contained in the Requirements of Writing (Scotland) Act 1995, it is strongly advisable that parties to Scots Law documents record the agreement in writing.
Where documents are executed in compliance with the requirements of the Act, it ensures there is a written record of the agreement, that rights and obligations are clearly expressed and that the documents are self-proving meaning that it can be relied upon in proceedings (where necessary) without the need for extrinsic evidence to be led.
To ensure construction documents are formally valid and achieve self-proving status, parties should comply with the following steps:
- Ensure the document is signed on behalf of the parties to the agreement (including a signature together with details of the full name for each signatory);
- Narrate where the signatory has signed the agreement (for example, the town or city);
- Narrate the date on which the signatory signed the agreement;
- Ensure each signature is appropriately witnessed as required, including a signature, full name and full address for the witness. The witness must be over 16 years of age, know the signatory personally, be independent and have no interest in the agreement and is required to witness the signatory sign the document;
- The agreement must also include a full testing clause setting out the number of pages in the document and containing a specific reference to any additional documents to be incorporated by reference;
- This testing clause must be on the same page as the last operative clause of the agreement;
- Any alterations or amendments made by hand to the agreement after printing must be signed by all parties to the agreement, showing their agreement to the change and the change(s) must then be referred to in the testing clause; and
- Schedules referred to in the document (generally speaking) need not be signed individually but must be identified on their face as being the schedule referred to in the document.
In certain circumstances, signatures will not require to be witnessed to achieve self-proving status if they are signed, for example, by two directors on behalf of a company.
Therefore when signing agreements, whilst it is tempting to interpret "Sign Here" as a literal instruction, please spare a moment to ensure that the construction document you have carefully (and sometimes painstakingly) negotiated is correctly executed. This not only avoids unnecessary delay through re-execution but most importantly to ensure the rights to which you are entitled under that agreement are protected and enforceable.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
