Business Law: Paul Whittingham underlines the binding nature of electronic signatures
- Credit: Archant
Gordon Ramsay will be amongst those who are able to confirm that the law now recognises “signatures” on contracts as having moved on from the days when nothing but a hand written one would suffice.
The courts have for some years recognised that, in the digital age, attaching a signature electronically is increasingly common and it will be considered to be valid and binding if it is clear there was the necessary intention for the virtual signature to be considered as binding as a hand written one.
Simply typing your name at the bottom of an email in which you agree a deal has been held to be binding.
Gordon Ramsay’s exposure to this issue was reported in a case last year. He had for many years entrusted many of his business affairs, including the signing of documents, to his business partner, a Mr Hutcheson. His office acquired a machine able to print pre-programmed signatures on to papers, and it was routinely used with versions of Gordon Ramsay’s signature to sign cheques and legal documents, and for autographing books.
It was used to sign a lease of premises which a Ramsay company was going to occupy. The landlord had also required a guarantee for the rent and other obligations from Gordon Ramsay personally. The signature machine was used to apply Mr Ramsay’s signature both as a signatory of the tenant company and also in his personal capacity for the guarantee. The judge accepted that Mr Ramsay was probably not aware of the personal guarantee being signed in this way.
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Mr Ramsay argued in the court case that Mr Hutcheson should not have used the machine to apply the signature to the personal guarantee without his express authority. In doing so, Mr Hutcheson had strayed from his authority to sign documents relating to the business and into committing Mr Ramsay to personal obligations beyond his remit, it was argued.
The court decided, however, that although the guarantee was a personal commitment, it was relating to business matters and Mr Ramsay had given such guarantees on previous occasions. For this and other reasons it was held that Mr Hutcheson had acted within his authority when he applied Mr Ramsay’s signature to the guarantee.
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This case shows why lawyers still prefer a hand written signature if possible. Facsimile signatures may be valid but I suspect Mr Ramsay thinks they suck!
:: Paul Whittingham is a partner at Ashton KCJ Solicitors.