Contracts no longer require a signature to be accepted and binding, as agencies are very aware

In a ContractorUK article on the realities of IT contracting in 2024, the author, a director of an IT recruitment agency, opined that “signatures ain’t everything,” and he is right.

Parties to a contract can quite easily agree terms without signing their names to a piece of paper, and indeed without having to sign anything at all, writes Association of Recruitment Consultancies chair Adrian Marlowe, the managing director of Lawspeed.

What's the legal position?

In UK law, all that is required is an agreement that the parties intend to rely upon.

Let’s take an everyday example unrelated to IT contracting. When you go into a sweet shop, pick a chocolate bar, hand it over and/or pay at the till, there is a binding agreement between you and the shop to buy those sweets the moment your payment is accepted. No one needs to sign anything or even say anything. Just imagine what shopping would be like without this rule!

Evidence is essential

Drilling into this further but now through a lens for IT contractors, the key principle that jumps out regardless of the kind of deal is the evidence.

What evidence exists to show that the parties reached agreement? In the context of an assignment to provide services, things can be a bit more complicated, but all the same, they can usually still be easily identified.

Three legal principles for contract acceptance

Basic legal principles establish that for an agreement to exist:

(a) one party must offer something to the other which the other accepts;

(b) there is what we in legal terms call ‘consideration’, that is, each party provides something tangible to the other, and;

(c) both parties intend to be legally bound.

There must be some evidence that these elements exist, and traditionally for documents the evidence is that both parties have signed the contract and are therefore bound by it.  

Electronic signatures: contract acceptance in the digital age

With the advent of electronic signatures, (due to regulation) these are now regarded as acceptable and valid despite the fact that an e-signature may resemble your granny’s washing line blowing in the wind!

Regardless of such a squiggle being aesthetically pleasing or not, the days of comparing signatures as visual evidence have long gone.

Right now, you can go online and accept or reject the cookies bar on a website just by the click of a button. This at least creates a contract between the website and user of the browser (whoever that may be), that allows the website owner to place digital data on your computer. It’s the norm, albeit I’m not sure it’s ever been challenged for obvious reasons.

So these days, digital data can therefore be shown to provide evidence of acceptance of an agreement without any signature at all.

Can emails be used to accept a contract?

An email sent by the person receiving a contract could say, for example, ‘Thank for your terms which I accept.’ This statement would normally be sufficient evidence of establishing agreement, and emails are not manually signed. 

As is now quite normal, a suitably set up button ‘click link’ can also capture the digital data. These are commonplace when you are asked to accept online terms of business, or complete an order. We even use this click-link system for our own contracts!

Part Performance

It’s also long been a principle that while one party may sign an agreement and the other not, if that other party does some action to show that the agreement was accepted, then that party would be bound by it.

In UK contract law, this is known as ‘part performance’. So if a contractor receives an assignment to sign, does not sign it but then turns up at the client-site to provide the work, it would be pretty hard to argue that the contractor had not accepted the agreement that was offered.

Furthermore, if work is done for the client and payment made to the contractor, any question about whether there is a binding contract would be ruled out entirely, without doubt. However, to avoid  risk of argument, our contracts spell out the binding nature of contracts in these circumstances even though there is no legal requirement for it, and ,of course, it would not be fair on the agency.

Walking out without signing?

So while some contractors hitting a snag at work may feel tempted to walk away because there is no signature, they may well end up ‘up the swanny without the proverbial paddle.’ More highly technical legal terms for you to digest!