Our e-update of 3 April 2009 referred to the recent Mercury case which concerned the re-attachment of signature pages to modified deeds under English law. Following concerns as to how deeds might be executed in now-commonplace 'virtual signings', the Law Society Company Law Committee and The City of London Law Society Company Law and Financial Law Committees have, as a joint working party, issued guidance regarding the execution of documents at such a virtual signing or closing.
The guidance applies only to documents governed by English Law, however it should be borne in mind where Scottish companies are entering into English documents. The guidance proposes arrangements for signature either once the document in question is in agreed form or prior to such agreement being reached. Provided that the lawyers acting for each of the signatories are in agreement with the arrangement, it is suggested that a virtual signing can be conducted as follows:
Agreed Form Documents
- Final copies of the documents should be emailed to all absent parties and/or their lawyers, as agreed;
- Each absent signatory should print and sign the signature page only. There is no requirement to print off the full document.
- Each absent party should then return a single email to its lawyers or to the lawyers co-ordinating the signing/closing. Such email should have attached either the final version of the document and a pdf copy of the signed signature page or the signed signature page with express authority to attach it to the final approved document. .
- A final version of the document, along with copies of the executed signature pages, may be circulated by one of the law firms in order to evidence the execution of the final document.
The joint working party considers the final version together with the pdf of the signed signature page attached to the same email, to equate to the ''same physical document'', as required by the decision in Mercury.
Documents Still Being Negotiated
- In sufficient time before signing/closing, signature pages relating to the documents still being negotiated should be circulated to each person who cannot be present at the closing or to such person's lawyers.
- Such signature pages should then be executed by each of the signatories and returned to its lawyers by email or courier, to be held to the order of the signatory until authority is given for it to be attached to the document to be signed.
- Once the document has been finalised, the law firm co-ordinating the signing/closing should email the final version of the document to each absent party.
- Confirmation should then be obtained from each such party that it has agreed the final version of the document and authorises the relevant law firm to attach the pre-signed signature page to the final version and to date and release the document. Where such authority is given to a firm that is not acting for the party represented by the signatory, a higher degree of formality may be required.
The final approved version of the document with the pre-signed signature pages that have been attached with the prior approval of the parties (or their lawyers) will constitute the original signed document.
The guidance is non-binding but provides a framework which seeks to avoid the logistical problems which arise in trying to arrange for an English law document to be executed while complying with the decision in Mercury.
As noted above, the Mercury case and the guidance described in this e-update apply only to documents governed by English law. It is important to note that Scots law still requires that each party to an agreement signs the same original, final form document.
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.
