11/06/2025·2 min read

Pitfalls if documents are not properly signed

The recent decision of Jinghua Investment Ltd v Marakanti [2025] NZHC 1430 highlights the importance of verifying signatures on an agreement prior to counter signing, with Jinghua Investments Limited (JIL) unable to enforce a personal guarantee of obligations under a lease due to inconsistencies with the guarantor’s signature. 

Key takeaways

  • Don’t assume the other parties have signed an agreement properly and that the agreement would be enforceable against them. A full and careful check of an agreement should be undertaken, including checking the identity and authority of signatories prior to counter signing; 
  • Counterparts to an agreement are expected to look identical and it may raise doubts about the validity of the agreement if inconsistent counterparts are produced;
  • When signing or sharing documents electronically, parties should be aware of the possibility of “signatures” being affixed to a document via ‘copy and paste’ without that signatory’s consent and should take steps to mitigate this risk. 

 

Background

JIL sought to enforce the personal guarantees provided by the shareholders of JIL’s tenant, Kahlon Banee Holdings Limited (KBHL). However, one of KBHL’s shareholders, Ms Marakanti claimed she never agreed to be a guarantor and did not sign the deed of assignment (Deed) in which the terms of the personal guarantee were contained. 

The Deed contained the “signature” of Ms Marakanti. It was alleged that the “signature” was inserted by someone via “copy and paste” and Ms Marakanti did not sign the Deed herself.

JIL commenced proceedings against Ms Marakanti in the District Court to enforce the personal guarantee, but failed to provide satisfactory evidence to discharge its burden of proving Ms Marakanti had signed the guarantee. JIL therefore could not enforce the personal guarantee against Ms Marakanti.  

JIL unsuccessfully appealed this decision to the High Court, with the High Court upholding the decisions of the District Court.  

What could invalidate a signature?

The Courts identified several aspects of the Deed containing the personal guarantee which created doubt about its validity: 

  • The Deed was signed in counterparts and shared by email, so JIL was unable to produce an original signed Deed with original handwritten signatures.
  • The signature blocks on each of the counterparts differed, with Ms Marakanti’s signature only appearing on some of the counterparts. 
  • Ms Marakanti’s signature appeared to have been electronically manipulated.
  • The counterparts had different document version numbers. 

Recommended safeguards

Precautions to ensure that an agreement is binding include: 

  • If ‘wet ink’ signing is preferred, retain original documents with original handwritten signatures, rather than relying on copies sent and received by email;
  • Ensure witnessing and any other document specific requirements are satisfied;
  • If electronic signing is used, consider using platforms that reduce the risk of fraud or forgery, instead of allowing any type of electronic signing.
  • Seek appropriate confirmations where electronic signing processes are used, including with reference to Section 228 Contract and Commercial Law Act 2017 (which sets out presumptions about reliability of electronic signatures).

Get in touch

If you have any questions about how to ensure an agreement will bind signatories, or are concerned about your business’ signing processes, please reach out to one of our experts who will be happy to assist.

Special thanks to Natalie Wilson and Libby Muir for their assistance in writing this article.

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