Legal documents are vital in
establishing formal relationships between parties. These instruments outline
the precise terms and conditions that regulate organisational transactions,
partnerships, or other agreements, ensuring that all parties are completely
informed of their rights and responsibilities. In certain instances, signatures
from both parties may be required to validate these documents.
A typical situation
requiring signatures from both parties arises when the agreement’s terms
explicitly stipulate that both parties must endorse the document to be
considered legitimate. This requirement confirms that all parties are aware of
and consent to the stipulated terms. By necessitating signatures from both
sides, the document attains legal enforceability, holding each party
accountable for meeting their respective commitments.
It is crucial to recognise
that the individuals signing a legal agreement, whether a contract, framework
agreement, lease agreement, or covenant deed, affirm their comprehension of
their rights and responsibilities under the agreement. When signing on behalf
of an organisation, the organisation asserts that the signatory has the
authority to execute the document legally. This ensures that the deal is
binding and that all parties are aware of their commitments.
The Purpose of Two
Signatories on Legal Documents
Although there is no legal
compulsion to do so, except for specific types of Deeds, the parties to an
agreement may stipulate that two signatures are required from each party.
Obtaining two signatures from a party can safeguard against potential fraud or
misrepresentation. This dual-signature requirement diminishes the risk of one
party being able to forge or alter the contract, as both must participate in
the signing process. Such a measure enhances protection against future
complications that may arise from fraudulent actions, thereby reinforcing the
integrity of the agreement.
A scenario in which two
signatures from the same entity may be necessary arises when a third party
executes a document on behalf of an organisation. In such instances, it is
customary for both the third party and an officially designated representative
of the organisation to sign the document. This dual-signature requirement
confirms the organisation’s consent to the terms outlined in the agreement,
thereby ensuring that the organisation is legally bound by the contract rather
than solely the individual acting on its behalf.
The practice of requiring
signatures from each party, or multiple signatures from one or both parties, to
formalise a legal agreement, framework agreement, lease agreement, or deed of
covenant is a standard procedure that protects the interests of all involved.
Mandating participation from both parties in the signing process significantly
diminishes the likelihood of misunderstandings, fraudulent activities, or
misrepresentation. This approach promotes a more secure and transparent
contractual relationship for all parties concerned.
Governance and Authorised
Signatories
Within organisations, the
question of who may sign legal agreements is critical. Governance frameworks
provide clarity by defining authority levels, delegating powers, and
establishing oversight mechanisms to ensure transparency and accountability.
This ensures that only individuals with appropriate authority can bind the
organisation to contractual obligations. In corporate contexts, this authority
is typically vested in directors, company secretaries, or other designated
officers, subject to the provisions of the Companies Act 2006 and the
organisation’s constitutional documents, such as articles of association.
The allocation of authority
mitigates risks of unauthorised commitments. Without transparent governance,
organisations may be exposed to claims that contracts are unenforceable because
the signatory lacked authority. The principle of ultra vires acts, though
largely mitigated by reforms in the Companies Act, still serves as a cautionary
reminder. Organisations must ensure transparency in appointing authorised
signatories, as failure to comply with governance structures can result in
financial losses, reputational damage, and protracted legal disputes.
Case examples illustrate the
consequences of poor governance. In Freeman & Lockyer v Buckhurst Park
Properties (Mangal) Ltd [1963], the court held that a company could be bound by
the acts of an agent who appeared to have authority. This highlights the
concept of ostensible authority, where third parties may rely on
representations of authority even if formal governance requirements were not
satisfied. The case emphasises the importance of ensuring that internal
procedures align with external representations to prevent costly
misunderstandings.
Modern organisations must
also consider evolving practices, such as the use of electronic signatures and
remote execution of documents. Governance frameworks increasingly need to
incorporate technology-related risks, ensuring compliance with statutory instruments
such as the Electronic Communications Act 2000. Boards of directors play a
central role in balancing flexibility with control, ensuring that delegated
powers are sufficient for efficient operation while safeguarding against abuse.
In doing so, they maintain accountability, legality, and confidence in
organisational contracting practices.
The Signing of Legal
Agreements
The act of signing a legal
agreement formalises the relationship between parties and evidences their
consent to be bound by the terms. In the UK, signature requirements vary
depending on the nature of the contract. Simple contracts generally require
only a signature, whereas deeds must be executed with specific formalities,
including the presence of witnesses. Signature remains the clearest expression
of assent, ensuring enforceability in the event of disputes. It is therefore
one of the most fundamental aspects of contractual practice.
The rise of electronic
communication has transformed signature practices. Electronic signatures are
recognised under both domestic law and retained EU law, provided they meet the
requirements of authenticity and reliability. The eIDAS Regulation remains applicable
in the UK, facilitating the use of advanced electronic signatures for both
commercial and governmental transactions.
This modernisation reflects
the need for efficiency in a digital economy, although certain transactions,
such as land transfers, still require traditional wet-ink signatures to comply
with statutory provisions. One area of ongoing debate is the witnessing of
electronic deeds, particularly in land transactions. While electronic
signatures are generally valid, the law is less specific on whether remote or
digital witnessing satisfies statutory requirements, leaving some transactions
reliant on traditional execution methods.
Following Brexit, the UK
retained the substance of the EU eIDAS Regulation within its domestic law,
while also adopting the Electronic Identification and Trust Services for
Electronic Transactions Regulations 2016. Together, these frameworks ensure
that electronic signatures remain valid and enforceable in the UK, provided
reliability and authenticity can be demonstrated. Businesses should therefore
consider both the technical security of signature platforms and the evolving
regulatory environment to ensure the contractual validity of transactions using
digital execution methods in commercial or governmental contexts.
Witnessing and notarisation
add further layers of formality, particularly for deeds or international
agreements. A witness serves to verify the authenticity of a signature,
reducing the risk of forgery or misrepresentation. In cross-border contracts,
notarisation or apostille certification may be necessary to ensure recognition
in foreign jurisdictions. These formalities safeguard the validity of contracts
across legal systems, supporting the growth of international commerce and
ensuring that agreements are respected in multiple regulatory environments.
The importance of signing
extends beyond legal enforceability. It signals commitment, mutual trust, and
seriousness of intention. By affixing a signature, parties demonstrate that
they have read, understood, and accepted the terms. Courts take this presumption
seriously, often holding signatories accountable even when they claim not to
have read the agreement in detail. This underlines the necessity of diligence
before signing, as the act itself creates binding obligations that may be
rigorously enforced in both domestic and international courts.
The Number of Agreement
Signatories
The number of signatories
required to validate a legal agreement depends on the nature of the contract
and the parties involved. In many cases, a single authorised representative may
suffice, provided they have the requisite authority. However, certain agreements,
particularly those involving corporate entities, may require multiple
signatures to ensure compliance with governance requirements. Dual signatories
are common in financial institutions, where safeguards against fraud and
misrepresentation are paramount, reflecting a commitment to accountability and
transparency.
Under UK law, a deed
requires stricter execution than an agreement, reflecting its greater legal
weight, as it can bind parties without requiring consideration. Organisations
commonly require two authorised signatories, typically a director and secretary,
to meet statutory provisions under the Companies Act 2006, section 44 and
demonstrate due governance. In contrast, an agreement may be valid with a
single authorised signatory, though many organisations’ internal governance
policies mandate two signatures. This practice safeguards against fraud,
ensures accountability, and provides more substantial evidence of properly
authorised contractual commitments.
The requirement for multiple
signatures serves both practical and symbolic functions. Practically, it
reduces the risk of unauthorised commitments, as two individuals must act
jointly. Symbolically, it demonstrates organisational consensus, strengthening
the legitimacy of the agreement. The Companies Act 2006, section 44, requires
documents executed as deeds by a company to be signed either by two authorised
signatories or by a director in the presence of a witness. These statutory
provisions underline the importance of multiple signatures in corporate
governance.
Case law and practice reveal
the protective function of requiring more than one signatory. In financial
contracts, for instance, banks often insist on dual authorisation to prevent
unilateral action by rogue officers. Joint ventures and partnerships similarly
rely on multiple signatures to reflect collective decision-making. This
safeguard promotes confidence among stakeholders, ensuring that agreements are
not the product of individual error, opportunism, or misconduct, but instead
represent the considered consent of the relevant organisation or consortium.
In practice, the requirement
for multiple signatories has proven especially valuable in detecting and
preventing fraud. The collapse of companies due to unauthorised commitments by
executives underscores the risks of insufficient oversight. By mandating dual
authorisation, organisations distribute responsibility and enhance scrutiny.
This reduces the likelihood of impropriety and supports internal controls.
Accordingly, the number of required signatories is not merely a formality, but
a substantive mechanism for ensuring that legal agreements remain valid,
reliable, and protective of all parties.
The Implications of
Electronic Signatures for Deeds
An electronic signature can
effectively execute a deed, provided that the individual affixing the signature
intends to validate the document and adheres to the necessary execution
formalities. The legal stipulation requiring a deed to be signed “in the presence
of a witness” mandates that the witness must be physically present.
This requirement holds even
when both the signatory and the witness utilise electronic signatures. The
parties signing and witnessing the deeds must be in the exact location at the
time the electronic signatures are applied to the deed. A deed that fails to
meet the appropriate execution formalities may still be recognised as a simple
contract, provided it is backed by adequate consideration.
However, there are instances where certain deeds do not involve sufficient consideration, rendering this alternative argument inapplicable. Therefore, the absence of proper execution could jeopardise the deed’s validity. It is essential for all legal documents, including deeds, to incorporate the correct execution provisions and to ensure full compliance with these requirements. Failure to do so may result in the document or deed being deemed invalid, rendering it non-binding on all parties involved.
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