• New Scottish Bill - The Legal Writings (Counterparts and Delivery) (Scotland) Bill - will make life easier for parties trying to sign and deliver Scots law governed documents to each other in multiple locations without any need to meet together in one place. 
  • It will also provide that documents created and signed on paper can be delivered electronically (by e-mail, fax or memory stick, for example) and still have full legal effect. 
  • The Bill is expected to be in force by the start of 2015.

This follows on new laws already in force in Scotland giving electronic documents equivalent status and standards of validity and authenticity to paper documents.

Key points:

Counterpart signature

Where either an electronic or a traditional paper document needs to be signed by more than one party, it will no longer be necessary under the new law for the signatories to be all together to sign the same piece of paper. Instead, as is already the case under English law, each party can sign a separate identical copy of the agreed form document (a ‘counterpart’).  To make it effective, the party then needs to deliver the counterpart that they have signed to the other party or parties and vice versa.

Once everything is signed the ‘final’ document is to consist of either (i) all of the signed counterparts put together in their entirety or (ii) just one full copy of the agreement attached to the signing page only from every counterpart signed by the parties.

Delivery

The key point here is that the new law makes it clear that documents created and signed on paper can be delivered electronically (by e-mail, fax or memory stick, for example) and still have full legal effect.  This removes the concern under existing law that electronic delivery didn’t count.

Action required?

Parties wishing to take advantage of the opportunity to sign their document in counterpart will want to ensure that the document in question contains appropriate delivery and counterpart clauses and dating provisions, in similar terms to these seen in English law contracts.  Since documents executed in counterpart will become effective from the ‘last’ date of delivery (rather than signature (as at present)) dating provisions will be required so that it is clear from the face of the document when it became effective – the dates of signing are no longer the determining factor.

It may also be prudent – at least in multi-party contracts – for the parties and their legal advisers to agree a protocol for signing, delivery and completion in early course. This can also be used to avoid the risk of any future argument as to when the contract actually came into effect.

Timetable for implementation

This is the first Bill in a new parliamentary process designed for bills emanating from the Scottish Law Commission. The process is likely to be completed early next year.

Comment

The needs of business – and business practice - often outrun the law.  Fully electronic documents and contracting are becoming increasingly common. Therefore, the need for clarity on the legal effect of e-mail delivery of documents both electronic and on traditional paper, has become more pressing.

On electronic documents, The Land Registration etc. (Scotland) Act 2012 now permits electronic documents to have equivalent status and standards of validity and authenticity to paper documents. The Electronic Documents (Scotland) Regulations 2014 have also just come into force setting out the requirements for e-signatures.

The new Legal Writings (Counterparts and Delivery) (Scotland) Bill summarised in this note is a welcome additional step towards Scots law catching up with business needs with the enablement of execution in counterpart and the legitimisation of electronic delivery of all kinds of documents, whether in electronic or traditional paper form.

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