The Legal Writings (Counterparts and Delivery) (Scotland) Act 2015 came into force on 1 July 2015.

It does two things:

•  It makes provision to the effect that documents signed in counterpart are legally effective under Scots law
•  It permits delivery of ‘traditional’ or paper documents by electronic means.

Execution in counterpart
Execution in counterpart refers to the practice (frequently used in England) whereby each of the parties to a document executes a separate physical copy of the document before the documents are exchanged so that each party holds a copy of the documents signed by the other parties.

It can be done where the parties are in different places and signing at different times. As such, it avoids problems of time and cost that can arise if all of the parties have to get together for a signing meeting or wait for a single document to be circulated around each of the parties one-at-a-time for execution.

There was a great deal of confusion as to whether executing documents in counterpart was competent in Scots law prior to the 2015 Act and the situation was so uncertain that it was common practice for parties to contracts in Scotland to agree to contract under English law in order to allow the use of counterpart signing. The 2015 Act removes that uncertainty and confirms the validity of the practice.

Delivery of traditional documents by electronic means
Under Scots law, contractual documents which have not been signed by all of the parties to the contract require delivery (i.e. to be given to the other parties to the contract) to be effective. The theory is that, until the document has been delivered to the other party, it is open to the party granting the obligations to change their mind and destroy or change the principal document but, once the document has been delivered to the other party, it is out of the control of the party granting the obligations and the contract becomes effective.

It is of course common for contracts to be negotiated by email or fax with the relevant documents attached. However, there is case law which suggests that sending a document as an attachment to an email or fax is not sufficient to amount to delivery. The reason for this is that faxed or e-mailed documents are merely copies of the principals meaning that, until the original document is delivered, a party could still change its mind and destroy the original.

The 2015 Act changes that and provides that traditional or paper documents can be delivered electronically meaning that the document will now become effective on the sending of the email (or fax) to which it is attached (unless the document provides otherwise).  It is worth noting that the original documents can still require to be sent to the other party, in addition to electronic delivery, where self-proving status is required or where the principal documents are required for another purpose (for example, registration).

The Legal Writings (Counterparts and Delivery) (Scotland) Act 2015 is available here.

The explanatory notes can be seen here.