In the current economic climate, where many logistics and transport professionals are seeking to reduce business travel that can be expensive and time consuming, in order to focus on operating more efficiently and effectively, we look at the latest guidance for lawyers from the Law Society1 on the best practice for executing logistics contracts and commercial agreements at a "virtual signing or closing".

There are often logistical problems in getting logistics contracts and commercial agreements signed, whether physically assembling everyone together or issues such as time constraints, security or the complexity of signing arrangements which preclude the use of post or courier. Therefore it has become reasonably common practice for signature pages to be drawn up and executed in advance and transferred to the final form of the contract once it is ready for completion.

However, this practice was considered by the High Court in Application of Mercury Tax Group Limited v HMRC [2008] EWHC 2721 (Admin) where it was held that a signature on a draft agreement would not be good evidence that the signatory had approved the final form version and that the agreement was therefore not valid. As a consequence of the concern this caused, many people reverted to holding physical signing and closing meetings.

The Law Society has now prepared guidance for lawyers on virtual signings and closings in order to address many of the concerns raised in the Mercury case. The guidance sets out a range of options for dealing with these situations which are governed by English law. Each transaction must be dealt with according to its own individual facts and circumstances, some of which may need to be given precedence over the options suggested by the guidance. The formalities for the execution of deeds and documents need to be followed correctly in any event.

One option which offers practical advantages and a prudent approach to virtual signings and closings follows these suggested steps:

  1. The proposed arrangements for the virtual signing/closing are agreed between all parties' lawyers before signing/closing.
  2. The final execution version of the logistics contract or commercial agreement is emailed to all absent parties and/or their lawyers whether as pdf or Word attachments. The relevant execution page may be attached separately.
  3. Each absent signatory prints and signs the execution page.
  4. Each absent signatory then sends an email to its lawyers, or the lawyer co-ordinating the signing/closing, attaching: (a) the final execution version of the logistics contract or commercial agreement; and (b) a pdf copy of their signed signature page.
  5. A final version of the logistics contract or commercial agreement together with copies of the executed signature pages should then be circulated by email by one law firm, at or shortly after signing/closing, which will constitute an original signed document. One of more originals can be created by printing off the final execution version of the logistics contract or commercial agreement and pdf copies of the signed signature pages or the original signature pages.

There are variations on this procedure and other options available which satisfy the requirements of English law outlined in the guidance and special consideration must be given to certain types of documents such as deeds, real estate contracts and guarantees.

Commercial Impact

The guidance for lawyers which has the approval of leading legal counsel represents best practice and provides a practical and effective means of executing logistics contracts or commercial agreements under English law without the need to physically assemble everyone together for signing/closing and avoids the issues of time constraints, security or complexity of signing arrangements which often preclude posting.

HFW tip

For logistics and transport professionals wishing to take advantage of the opportunity to save time, money and inconvenience, virtual signings/closings provide a sensible solution to executing logistics contracts or commercial agreements where it is not possible or desirable to hold a physical signing or completion meeting. The Mercury case highlighted some of the risks involved in virtual signings/closings without complying with the legal requirements to ensure documents are properly executed and therefore valid and legally binding. The guidance for lawyers published by the Law Society provides welcome reassurance to parties wishing to take advantage of virtual signings / closings although care must always be taken and each transaction approached according to its own facts and considered accordingly.


1. A joint working party of the Law Society Company Law Committee and The City of London Law Society Company Law and Financial Law Committees. The full guidance is available to download at:

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.