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What’s in a Signature?

There is some ongoing uncertainty as to the value of a signature. This is particularly true in regard to signatures which have been supplied in an electronic format.

Many agents believe that they need an actual original signature (known as a ‘wet ink’ signature) before a lease can be valid. Some Courts encourage this view by demanding to see ‘originals’ at possession hearings.

This, to some extent, misses the point as to what is going on. A written tenancy agreement is nothing more than evidence as to what the parties agreed between themselves. It can be undermined by evidence if it does not represent the actual agreement between the parties although the Courts are normally extremely reluctant to accept such evidence unless it is very compelling. Equally, a signature is nothing more than evidence that a particular party intended to be bound by a particular document. It is not necessarily the only piece of evidence nor is it conclusive in itself. In other words a ‘wet ink’ signature is not absolute proof that someone intended to be bound by a document. That person’s signature might have been forged, they might not have had sufficient mental capacity to understand the document they were signing, or they might have been placed under duress. All these circumstances can significantly undermine a so-called original signature.

By the same token the absence of a signature is not evidence of an intent not to be bound. An exchange of emails, faxes, or letters in which someone acknowledges that they have read an agreement and intend to be bound by it is as good as any signature. So too would be a verbal acknowledgement made before reliable witnesses. In fact, people who are physically disabled enter into contracts in this manner all the time.

Therefore, when considering whether to accept a signature that has been sent by facsimile or scanned and emailed or when considering setting a firm policy the issue to be considered is not what is ‘legal’ but rather what level of risk is acceptable. If a lease is of a relatively low value then a facsimile signature is probably acceptable. If it is for a lot of money then it would be wise to ask that all signatures are witnessed. The different forms can be combined so that, for example, a firm could set a policy that a lease being signed remotely must have signature’s witnessed while one where an original signature is to be provided or where the lease is being signed in the office is not treated so stringently.

As with all office policies it is important that the system adopted is clear, transparent and has a degree of reasonable flexibility built into it.

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