There are two forms of agreement written under English law: simple contracts (written “on hand”) and deeds. To avoid these difficulties, it is possible to sign a “virtual” contract. In other words, the signature pages are prepared and executed in advance and the signatures are “shared” after mutual agreement, often by email. However, an act requires an additional execution formality that goes beyond a simple signature. Acts must be written and, as a rule, performed in the presence of a witness, whereas, in the case of a company, an act can be performed effectively by two directors or by a director and by the secretary of the company. Specific formulations should also be included above the signature blocks. Contracts and simple acts are often executed in the opposite stages. This means that each contracting party signs separate but identical copies of the same document. The signed copies together form a single binding agreement. Documents are most often executed in the form of simple contracts. A contract becomes mandatory on the date on which both parties intend to implement it, which is generally demonstrated by both parties who sign the agreement. There is no need to testify to the signature. Acts can also be beneficial if they are not strictly imposed by law.
For example, if a single contracting party derives a real benefit from an agreement, it would be advisable, under English law, to execute the contract as an act so that it is not declared null and void for lack of consideration. Another potential advantage of the acts is that they have a longer legal limitation period than contracts: twelve years. In short, the safest way for simple contracts and deeds is for parties to exchange by email pdf copies of signature pages executed with – in the same email – a word or pdf version of the entire agreement that was executed. Acts are prescribed by law in certain circumstances. For example, transfers of real estate and proxies must be made through an act. Simple contracts and documents generally contain a clause expressly authorizing the execution of the document in return. However, some controversial English courts indicated that, in certain circumstances, contracts and acts performed could be virtually unenforceable. To clarify the legal situation, guidelines have been published by the Law Society Committee of the Law Society Company and the City of London Law Society Law and Financial Law Committee.
These guidelines should be taken into account when preparing closures or signatures, particularly when some parties wish to sign documents in practice because they cannot personally attend the meeting. Simple contracts have a legal “prescription period” of six years. This means that a contracting party must assert a right to a violation of this contract within six years of the breach.