In these uncertain times many companies are striving to keep the show on the road. With boards and personnel working remotely how can agreements be signed? Here, Damian Maloney looks at e-signatures and outlines some key tips for companies entering into agreements remotely.
The key messages are as follows:
- Companies should appoint one or more attorneys and/or authorised representatives – this can be done by e-signature
- Both parties to a contract should consent to the use of e-signatures (e.g. by exchange of email)
- We recommend the use of Advanced Electronic Signatures (AES), which have additional security features
- Most agreements can be signed by a director or someone authorised to do so on behalf of the company
E-contracts and e-signatures
In practical terms there are two types of e-signature used in Ireland:
- Electronic signature (the “Simple Electronic Signature” or SES): an SES can be a type written name or a scanned signature
- Advanced Electronic Signatures (AES) are provided by e-signature service providers and are uniquely linked to, and capable of identifying, the person signing. The AES is linked to the signed document in such a way that any later change in the document can be detected
Typically, the SES can be used for signing letters, resolutions, or issuing notices. Whilst the SES can also be used for signing agreements and contracts, we would recommend the use of an AES, which has the additional security features to ensure that all parties sign the same contract.
Check before signing
- Note that some documents must be executed by wet-ink signatures, including documents transferring property (including leases), wills, statutory declarations and affidavits
- To be enforceable, all parties to a contract must consent to the use of e-signatures (e.g. by exchange of email). Consent can also be implied (e.g. if all parties sign digitally)
- Check the agreement doesn’t have a definition of "in writing" which precludes the use of e-signature
Is the company seal required?
All Irish companies have a corporate seal which usually must be counter signed by two directors or one director and the company secretary. The company seal is physically impressed on a document and therefore cannot be used electronically. The company seal is used to execute deeds. Most agreements, however, are not deeds and do not require the company seal. Most agreements can be signed by someone authorised to do so on behalf of the company.
Who can sign on behalf of a company?
Directors can sign on behalf of a company. The board of directors can authorise anyone to sign a particular agreement or can appoint authorised representatives, who are generally authorised to sign on behalf of the company. In addition, a company can appoint an individual under a power of attorney. An attorney appointed by a company can also sign deeds on behalf of the company, without the requirement to use the company seal.
What should companies do now?
- Companies should appoint one or more attorneys now – this can be done by e-signature
- Consider the appointment of additional authorised representatives
- Consider subscribing to an e-signature platform, to allow for AES
The team at Beauchamps will continue to provide updates on tackling the legal issues associated with carrying on business in the COVID-19 climate.
For more information or to discuss any COVID-19 related issues impacting your business, please get in touch with Damian Maloney (Corporate and Commercial),Thomas O'Dwyer (Litigation), Sharon Delaney (Litigation), Barry Cahir (Litigation and Insolvency), Dorit McCann (EU, Competition & Procurement), Aidan Marsh (Commercial Property), Gerry Gallen (Commercial Property), Sandra Masterson Power (Employment), Paul Gough (Employment) or your usual Beauchamps contact.