Contracts and social distancing

Working from home is now the norm for many, where business operations such as negotiations proceed as normal, albeit remotely. However, in the cases where contracts need to be signed, challenges can arise while observing social distancing. 

In this week’s blog, we explore alternative methods of executing contracts. However, as certain documents may require specific execution formalities or may have specific restrictions, each case should be approached individually.

Contracts and social distancing

Generally, contracts are executed using ‘wet ink’ signatures, or the original penned signatures of the relevant parties or signatories. This method may not be suitable in the current remote working environment and pose further complications where the execution of the contract requires two signatures. 

If signatories are in different locations there are a number of options open to complete the execution of a document. The first signatory may sign a copy with a wet-ink signature, and then post this to the next signatory. In this case, documents should be sent by a secure delivery service if available.

Electronic signatures 

In certain cases, electronic signatures may be used by signatories where social distancing recommendations prevent the completion of wet-ink signatures. 

Electronic signatures became legally recognised in Ireland with the introduction of the Electronic Commerce Act in 2000, which allowed online signatures to be recognised under Irish law. This Act was reinforced by the European Electronic Identification, Authentication and Trust Services (eIDAS) Regulation 2014, which states that an e-signature will not be denied legal effect solely on the grounds that it is in an electronic format. 

eIDAS defines an electronic signature as “data in electronic form which is attached to, or logically associated with other data in electronic form and which is used by the signatory to sign”. Under this guidance, electronic signatures are considered advanced where: 

  • Signatories can be uniquely identified by and linked to the signature;
  • Signatories must have sole control over the signature creation data used to create the signature (usually a key or pin number which is unique to the signatory), allowing the document to be encrypted and decrypted by the signatory or recipient;
  • Signatures must have the capability of identifying if its data has been tampered with;
  • The signature must have the capability of being invalidated where its accompanying data has been modified or changed. 

Where a witness is required they must be physically present with the signatory when they electronically sign the document in question. This, of course, poses challenges further under current social distancing guidelines. The use of video conferencing, which makes it possible to view the signing, does not sufficiently fulfil the requirement for witnesses to be physically present. Social distancing, however, does allow a witness to be present in person. 

If you are intending to use electronic signatures, it is advisable that you seek approval from all parties involved in advance. You should make it clear that the contract will not contain a ‘wet ink’ signature and will be conducted virtually. 

How are we dealing with the current situation?

While all client face-to-face meetings at both CDS Law & Tax offices have been suspended, all staff have the capability of working remotely with full access to all technology and tools needed to service our valued clients. We continue to facilitate signing and the completion of original documentation where required while strictly observing social distancing guidelines. 

Should you have any queries or require advice, please do not hesitate to contact us at the usual phone numbers, Cork 021 235 5810 and Tralee 066 716 9033, or email info@cdslaw.ie