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Digital signatures on contracts

It is increasingly more common for businesses to enter into an agreement and exchange contracts via emails and we are often seeing the use of electronic and digital signatures as part of this trend. What then are the risks associated with this?

It is still preferable for both parties to meet and to use a written, signed contract as it gives you much greater certainty that the person and business you are dealing with are who they say they are, have the authority to agree to the terms which are being entered into and have the intention to be bound by the terms of the agreement that they have entered into.

However increasingly in practice, this doesn’t happen.

The law does recognise a variety of valid electronic signatures from a scanned copy of an ink on paper signature to having to click on a separate link to acknowledge ‘I accept’ the terms online. The latter is probably the one we are all much more familiar with and don’t give it a second thought in our everyday internet use.

There is of course the concern that anything electronic can be altered, so a more sophisticated approach should be taken by all businesses and a digital signature platform should be used. These provide an electronic fingerprint, coded and securely associated with the person signing and provide the ability for recorded storage, enabling accurate record keeping. DocuSign is one such platform.

It also helps to speed up business process, especially as we are entering more uncertain times and businesses may be dealing with suppliers and customers from different parts of the UK or beyond, to maintain their usual business operations or to meet new demand for goods or services.

Getting your business ready now for the future and assessing how digital signatures can be used for your business contracts will help you to stay one step ahead of your competition and to react quickly to changes in the wider world.

For advice on any business contract, contact Sarah Astley