Business management

Execution of documents by virtual means

This practice note was reviewed in May 2020, in the context of coronavirus (COVID-19) restrictions.

This practice note should be considered in conjunction with the:

This document remains in the form issued on 16 February 2010.

R (on the application of Mercury Tax Group and another) v HMRC [2008] EWHC 2721 (Mercury) has led to discussion about the effectiveness in English law of using:

  • pre-signed signature pages, and
  • virtual signings and closings where signature pages are exchanged by e-mail

This practice note gives suggestions on good practice in light of the Mercury case and suggests different options for virtual signings/closings. The options suggested are not exhaustive as it is not implied that virtual signings and closings cannot or should not be conducted in other ways.

It is considered that:

  • the Court of Appeal decision in Koenigsblatt v Sweet [1923] 2 Ch 314 (Koenigsblatt) remains the leading authority on the applicability of the principles of authority and ratification to the creation of legally binding written agreements
  • the first instance decision in Mercury should be viewed as limited to its particular facts
  • the decision in Koenigsblatt should prevail where there is inconsistency between the two

This practice note is intended to assist parties who nevertheless wish to take a cautious approach, in the light of Mercury, where it is more convenient to have a virtual signing or closing and wet ink documents are not required for registration.This is an evolving area of law and you should keep abreast of any relevant developments.

This practice note is the Law Society’s view of good practice in this area, and is not legal advice. For more information see the legal status.