Using E-signatures for Efficient Contract Execution

Alexander Catmur
Strong contract governance in a programme environment is critical for maintaining control and mitigating commercial risk.

Given the high volume of projects that can be delivered within a programme, it is essential to have robust contract procedures in place, however, these procedures mean little if, as a result of a time-consuming contract execution process, there is no contract to administer.

The hard copy problem

Programmes typically involve coordination of diverse teams of consultants, contractors and client staff who are often located around the country. An integral part of programme management requires that information is exchanged quickly, efficiently and securely. Internet technology has provided many ways of enabling this to occur outside of email, yet, in many cases, the execution of legal documents continues to be undertaken in hard copy.

An integral part of programme management requires that information is exchanged quickly, efficiently and securely.

Although many clients use framework agreements to simplify the appointment of consultants and contractors, given the volume of projects that can comprise a programme and the legal documentation that needs to be drafted, printed, mailed out for signing and sent back, this can still present clients with major issues in terms of timely execution of documents and tracking contract status. This can result in projects proceeding outside of the dictates of contract governance, thereby increasing project risk.

Employing a web-based solution that enables electronic signatures (e-signatures) to be used to execute contracts can provide an effective solution to this unwieldy problem.

What is an e-signature?

The Electronic Communications Act 2000 provided for the recognition of e-signatures within UK law and similar legislation exists with the EU, USA, Canada and Australia. E-signatures can take a variety of forms, however, the most applicable in these circumstances enable the association of an email address with a personal or corporate identity, providing a means by which documents can be signed securely and, importantly, with a clear audit trail.

What is an e-signature solution?

A typical web-based e-signature solution will provide the facility for documents to be uploaded to a web-server by the contract administrator. Using in-built workflow, a secure link to the documents is then issued, via email, to the relevant people who are able to access the document online and sign it. Once all the signatures have been obtained, a final, signed copy of the document is distributed to the relevant parties and stored on the system.

Such systems typically use secure connections and a high level of encryption to protect data and documents which, when combined with robust contract administration processes and guidelines around nominated email addresses, can ensure that any confidential data remains so.

Furthermore, additional functionality is often available, such as:

  • Status tracking for all documents;
  • Automatic and manual reminders for outstanding documents;
  • Reporting on the status of all documents and the time taken for each party to sign the document;
  • Archiving of documents, both on and off-system;
  • The ability to assign a delegated signatory (to cover annual leave and sickness);
  • Notification of when a document is forwarded to another signatory (or to someone outside of the workflow);
  • Integration with other common business systems such as SharePoint, SAP, CRM, Citrix, Oracle and Google Apps.

Implementing an e-signature solution

Implementation of an e-signature solution is best considered alongside the commencement of any framework agreements as the necessary consideration can be given to the drafting of the notice requirements within the contract, saving costly re-drafting at a later date. However, in our experience, with a careful and robust implementation plan, an e-signature solution can be adopted part way through the duration of a framework agreement and still deliver significant benefits to all parties to the programme.

E-signature systems are scalable and can be used for ad-hoc contracts or large, multi-national programmes of work.

You don’t have to have a huge, global programme either. E-signature systems are scalable and can be used for ad-hoc contracts or large, multi-national programmes of work.

The benefits of an e-signature solution

The primary benefit implementing an e-signature solution can bring is that it provides a fast, reliable means of executing contracts. In our experience we have seen the average time to sign go from over 40 days to less than 24 hours within a month of implementation.

In our experience we have seen the average time to sign go from over 40 days to less than 24 hours within a month of implementation.

There are, however, other important benefits that the use of these systems can bring, such as:

  • Improved contract governance;
  • Improved visibility over contract status via automated reports issued from the system;
  • Automated workflow to bring control and consistency to contract execution;
  • Embedded authority levels for signing within the workflows to ensure contracts were only signed by those with the authority to do so.

To summarise, e-signatures can provide an effective, secure and versatile solution to contract execution within a programme environment, delivering a wide range of benefits to clients, contractors and consultants alike. Used successfully, they can underpin robust contract governance, processes and procedures, thereby mitigating commercial risk and protecting your bottom line.