The Relevance Of Signed Documents In Contractual Agreements

The Relevance Of Signed Documents In Contractual Agreements.

By F. C. Robinson.

ABSTRACT.

When persons go into contracts agreements, more often than not they frank and execute such agreements without knowing the relevance and legal implications of affixing their signatures on the contractual documents, this essay solved the above issue by giving a detailed overview of the relevance of signed documents in contractual agreements.

This essay gave an in depth and detailed analysis of the Relevance of signed documents in contractual agreements by discussing extensively the above subject matter.

This essay  also gave answers to other related relevant questions like; what is a contractual agreement, what makes up a contractual agreement, what can pass as a signature on a document, what are the effects of leaving a contractual agreement unsigned, what is the fate of a party who affixes his signature on a document he didn’t intend to, and the exceptions to the rule on signed and unsigned documents.

This essay ultimately concluded by admonishing parties to every contractual agreement to take all reasonable steps in ensuring that contract documents are signed and executed.

INTRODUCTION.

 The execution of legal documents is very imperative and cardinal to every contractual document that the seeks to be enforceable in a court of law, as the court considers  an unsigned document inadmissible in court and also a worthless piece of paper as was expressed by the court in G.S.&D. IND. LTD V N.A.F.D.A.C, it’s also a truism that no one goes into a contract or a legal agreement without the underlying purpose of making such contract or legal agreement enforceable or wants  their contractual agreement or document treated and or addressed by the court as a worthless piece of a paper, hence the importance of signing and executing contractual agreements cannot be overemphasized and overstated.

Contractual Agreements

A contractual agreement herein also referred to as a contract was aptly and concisely defined by the court In OMOYINMI V.OGUNSIJI & ANOR. The court adopted the definition of a contract in the Black law dictionary. It stated thus, “I will adopt the apt definition of contract by the learned author of Black’s Law Dictionary 8th Edition at page 341 and quote: “An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.

Elements of Contractual Agreements.

The court has in a plethora of cases like ORIENT BANK OF NIGERIA PLC V. BILANTE INTERNATIONAL LIMITED and many others recognized five vital elements of a contractual agreement. These  five elements must coexist at the same time in one agreement to be a valid contract. They include;

Offer: This means to request for another party to enter a contract.

Acceptance: This means to assent to the request to enter into a contract.

Consideration: This can be described as the price or value given or detriment suffered by the party to a contract in exchange for the benefits of the contractual agreement. Consideration has been defined in the case CURRIE V. MISA

Intention to create legal relations: This connotes the desire by the parties to be legally bound. In essence, it portrays the desire of the parties for the court to have jurisdiction over any dispute arising from the contract.

Capacity to contract: This involves the capability of the party in question to enter into a contract. In law, infants, drunks, and persons of unsound mind cannot generally enter into a valid contract. They need to fulfill special requirements to be able to enter into a valid contract.

Signed Document.

A signed document is a document upon which a signature is affixed portraying authenticity. Where the document is contractual, it can be called an executed document.

Relevance of Signing a Contractual Document.

These are the importance of appending a  signature on a contractual document;

1. It portrays consent: It indicates that the party who signs has read, understood, and consents to the content of the contractual document. Thus it is advised that one must read the contractual agreement thoroughly before appending a signature. If an illiterate or blind person is to sign a document, an illiterate or blind Jurat is to be inserted. For Lagos State, it will be attested to by a Magistrate, Notary Public, or a Commissioner for Oath
2. It binds the parties: It makes the parties who sign to be bound by the agreement whether or not they have read it. This was held in the case of MOBIL PRODUCING (NIG) UNLIMITED V. UMENWEKE.
3. It conveys identity: The signature affixed is used to identify the parties who enter into the contractual agreement. SECTION 83(4) OF THE EVIDENCE ACT 2011 provides that the statement in a document shall not be deemed to have been made by him unless it was signed, written, or initialed by him.
4. Privity: Only a person who signed a document can enforce the benefits created in it. A legal document cannot be enforced against the person who did not sign the document as such person is deemed not to be a party to it.—TWEDDLE v.ATKINSON, LEWIS v. UBA

What Amounts to a Signature?

A signature is arguably the most important part of a contract. It used to only mean a stylistic representation of one’s name or initials. Merriam-Webster’s dictionary defines a signature as “the act of signing one’s name to something” and “the name of a person written with his or her own hand. SECTION 93(1) OF THE EVIDENCE ACT 2011 provides that a document is deemed to be signed by the person’s handwriting, signature, or initials, even a thumbprint would suffice.

This means of signing a contractual agreement had sufficed for years and has proven its relevance. However, in times like this where individuals enter a cross-continental agreement and it is impracticable for parities to physically meet to sign contractual agreements, especially after the outbreak of the coronavirus pandemic that led to the total lockdown of countries worldwide. There was a total restriction of movement within a country also, technology has once again come to the rescue. The use of digital and electronic signatures gained popularity.

An electronic signature simply means a signature generated through an electric means. It can be a symbol or a security procedure evidencing a signatory identity such as a scanned image of a handwritten signature, a biometric hand signature, a typed name at the end of an email/CV, a click to indicate consent online, as long as it creates an intention to enter legal relations and be bound by it. It has been recognized by our domestic laws;

• The NIGERIAN EVIDENCE ACT 2011 recognizes the use of electronic signatures. SECTION 93(2) AND (3) thereof recognizes e-signatures and provides that where a rule of evidence requires a signature or provides for certain consequences if a document is not signed, then an electronic signature is permissible. However, the party relying on the e-signature must authenticate or prove that a procedure exists to verify that the electronic record is that of the person.
• SECTION 101 OF COMPANIES AND ALLIED MATTERS ACT (CAMA) 2020 has now introduced e-signature in corporate transactions and filings. It provides that documents requiring authentication by a company can now be signed electronically by a director, secretary, or other authorized officers of the company and need not be signed as a deed. Also, partly due to the physically distant COVID-19 situation, the Corporate Affairs Commission (CAC) now accepts e-signature in the registration and incorporation of business entities, as handwritten signatures are now uploaded through the Company Registration Portal (CRP) during registration.

This is in contrast with the previous Companies and Allied Matters Act (CAMA) 1990 which did not provide for the use of e-signature, hence, during registration, the necessary registration forms were printed for proprietors/shareholders to affix their handwritten signature, and then the form is scanned and uploaded to the CRP. 

• SECTION 17 OF CYBERCRIMES (PROHIBITION AND PREVENTION) ACT, 2015 also recognizes the use of electronic signatures in Nigeria, they are court-admissible & safe for general business use such as the purchase of goods & any other business transaction, including, employment contracts, NDA, Privacy Notices, commercial agreements, consumer agreements, shall be binding. However, the Act provides exceptions to certain transactions that e-signatures are not allowed, such as wills, codicils, and other testamentary documents; death and birth certificates, and matters of family law such as divorce, adoption; Issuance of Court orders; legal requirements in affixing a signature, etc.

Plea of Non Est Factum.

Non-est factum means “not my deed”. The principle was developed to mitigate the harshness of the common law principle that a party is bound by his signature to the content of a document whether he understood it or not. This common law principle is portrayed in L’ESTRANGE V. GRAUCOBS where the plaintiff was held bound by his signature even though the item he contracted to buy was faulty. The court held that the plaintiff could not have the contract canceled since he had already appended his signature to the document.

Where a plea of non-est factum succeeds, even though it is glaring that the party’s signature is on the contractual document(s), he may be free from all duty and obligation that should have been a consequence of appending his signature. The party must therefore prove that his signature got appended on the document as a result of fraud, misrepresentation, duress, or undue influence. 

Before a plea of non-est factum can be entertained the party must prove that he misunderstood the character, class, or content of the document and must also prove that he was not negligent in signing the document. In THOUROUGHOOD’S CASE, Thouroughoood wanted to relieve his tenant who owed him arrears rent of his debt, and a document was created for that purpose, so he thought. Unknowing to him his tenant had prepared a document for the transfer of property. Thouroughood who was an illiterate had asked that the content of the document be explained to him before he signed was misrepresented. Subsequently, the tenant sold the property. The court held that the principle of non-est factum applied as Mr. Thouroughoood took all the necessary steps and was not negligent. Also, the character of the signed document and that which Mr. Thouroughoood intended to sign were fundamentally different.

Unsigned Document

As the name suggests, an unsigned document is a document that has no signature appended to it. 

Effect of an Unsigned Document

The implication of leaving a document unsigned are as follows;

1. No intention to be legally bound:  The absence of signature(s) on a contractual document implies that the parties do not intend to be legally bound by the contract. Consequently, the parties cannot approach the court based on any dispute that arises as a result of the agreement since it lacks this very vital element of the contract.
2. No evidential value: An unsigned document cannot be admitted in court as evidence as it lacks evidential value. It has been described as a worthless piece of paper by the court.
3. It renders the authenticity of the document doubtful: When a document is left unsigned, it makes it problematic for the court to identify who wrote it. In NWANCHO V. ELEM, the court held that any document that is meant to be signed and is not signed renders the authorship and authentication doubtful.

The Relevance of a Signed Document in a Contractual Agreement.

The relevance a signed document in a contractual agreement include;

1. A signed document can be used as evidence of contract: In a contractual dispute, the onus lies on the plaintiff to prove that there was a contract between the parties before the court begins to determine the case. A signed document of the contractual agreement containing the terms of the contract can be used to prove that there was a contract between the parties. SECTION 86(2) OF THE EVIDENCE ACT 2011 provides that where a document has been executed in several parts, each part shall be primary evidence of the document. The court also held in MOBIL PRODUCING (NIG) UNLIMITED V. UMENWEKE that “It is a general principle of law that where a contractual agreement is signed by all the parties to it, the agreement is proved by their signature in absence of fraud, misrepresentation or any plea of non-est factum.
2. A signed document connotes the intention of the parties to legally bond by the terms of the contract: The parties to a contract owe a duty to each to fulfill their quota in a contractual agreement. Signing the contract document indicates that the parties intend to be bound legally. As a result, in case of any breach of contract or dispute arising from the contract, the parties can approach the court and the court can assume jurisdiction and adjudicate to resolve the dispute. In ANABULU V. STATE, the court quoted Umar J.C.A. in BABATUNDE V. BANK OF NORTH LIMITED LTD. where he stated that since “the signature of the Complainant and Appellant is appended on the document, they are therefore bound by the document. The court is also bound to give effect to the intention of the parties as stated in the contract.”
3. A signed document makes for the certainty of contractual terms: The law is settled that when a transaction is reduced to writing, oral testimony cannot vary the content of the document. This is provided for in SECTION 128 OF THE EVIDENCE ACT 2011. As a result, mere word of mouth cannot change the terms of the contract and the parties to the contract can be certain of what the terms of the contract is. 

Exceptions

It is trite in law that for every general rule, there is an exception. Here are the exceptions to the general rule of signed and unsigned documents.

Where a signed document would lack evidential value:

1. As much as a signed document in a contractual agreement serves as proof of contract and an indication of the intention to be legally bound by the contract if the executor (the party who signs the contract) passes a plea of non-est factum and  is granted, the signature would be no such effect.
2. Where the any vitiating element (fraud, misrepresentation, duress or undue influence) is established in the contractual agreement.

Where an unsigned document would be admissible in law: 

1. Where the parties admit that there was a contractual agreement between them. This was the position of the court in AWOLAJA $ ORS V. SEATRADE G. B. V.
2. Where it is the intention of the parties to be bound by the contract. This can be deduced through the parties’ conduct.

These exceptions would however not apply where;

• Statue provides that the kind of agreement entered between the parties must be signed
• The parties to the contractual agreement provide signing of the document as a condition president for the execution of the contract.

Conclusion

Given the foregoing, it can be submitted that franking and execution of contract documents and papers are so pivotal and sacrosanct to every contractual Agreement. Parties to a contract are admonished to take reasonable steps to ensure that the other party ratifies the contract paper, in other to make overt the intention of the party to be bound by the contractual terms and the contract itself because the Intention of man isn’t capable of positive proof it can only be inferred from overt Acts.” Thus the franking of the contract papers makes it very obvious and glaring as submitted supra that the parties want to be bound by the contract and its terms and also in case of disputes parties can always present the ratified agreement as evidence in court as opposed to an unsigned and an unexecuted contract document, that is considered as a useless piece of paper and thus inadmissible in a competent court as evidence. Consequent to the above-stated premise, every contract and agreement for the best interest of parties should be signed and executed.