Virtual completion meetings - effective execution of documents - is it really enforceable?
Altmore Business Law frequently acts for clients at a considerable distance: often they ask "do we have to come to the completion meeting?"
The answer is almost always "no" unless the parties want a physical meeting. Physical meetings can be difficult logistically, time consuming and costly. Altmore recommends the virtual rather than the physical completion meeting wherever feasible.
Virtual meetings lead naturally to electronic documents and virtual signatures. The documents are often far too bulky for repeated or quick printing off without industrial reprographics machines to hand. Postal services are so slow compared with today's pace of working.
It's so much quicker and easier to read the document on screen then print off only the signature page, sign that, and fax or e-mail it.
But what about the enforceability of the documents when executed/ entered into in post print-age ways?
First of all lets not forget of course that considerable volumes of business (by value) are - and for centuries have been - agreed on a hand shake or by word of mouth and are enforceable with little or no written record.
But what of deals where written contracts are the norm?
There are broadly four types of document: ? simple contracts ? guarantees ? deeds and ? conveyances/ other dealings with real estate.
Corporate transactions we undertake for clients will often involve completion documents of each kind. What's more, a document might pass through several drafts requiring for its purpose to be only a simple contract but at some point as a result of additional negotiated terms require conversion to a deed.
At completion some care is required because each kind of document carries different execution/ enforceability considerations. These have developed in the paper world and though a balance of research, consensus, custom (still in its infancy) and convenience have been transposed for the virtual world.
Execution formalities in the virtual meeting
So what in the virtual completion meeting is required to create an enforceable document?
Judicial opinion in a recent tax case has stimulated recent discussions in the legal profession.
Law sector bodies and, doubtless, law firms have obtained opinions from leading counsel.
A joint working party of The Law Society Company Law Committee and The City of London Law Society Company Law has prepared guidance material.
The following will assist you but, as always, please seek legal advice. This is a particularly technical and arcane area of the law.
In addition, there are many aspects affecting the enforceability of a contract even if correctly executed.
- Agree the procedures for the virtual signing/closing and do so well in advance with all parties.
- E-mail agreed final execution versions of the documents to all parties and/or their lawyers with signature pages.
- Each signatory then prints and signs the signature page only. No need to print off the full document.
- Each signatory returns a single email to its lawyers to which is attached (a) the final version of the document and (b) a pdf copy of the signed signature page. (In the case of deeds, the arrangements will also need to make clear when delivery is to take place or, alternatively, to make clear that a deed has not been delivered merely because it has been signed and the steps set out above followed.)
- At or shortly after signing/closing, to evidence the execution of the final document, a final version of the document, together with copies of the executed signature pages, may be circulated.