Tap or Sign? Electronic Signatures and Contracts
In today’s society, most documents used in day-to-day business can now be filled out and signed electronically. The Electronic Transactions (Queensland) Act 2001 (ETA) is the legislation which governs the permitted use of electronic signatures.
Although the ETA does not include a comprehensive definition of what constitutes an ‘electronic signature’, this term usually encompasses images displaying the person’s signature, typed name or some other form of identification. The courts have previously held that a name, either printed or signed, which appears at the bottom of an email is a valid signature for the purposes of a binding contract.
Section 14 of the ETA sets out three basic requirements for valid signature, being identification, reliability and consent:
This kind of electronic signature specifically uses a cryptographic authentication technology which allows you to generally “track” when and who signed the document. However, although these digital signatures are more secure than handwritten, these can still be subject to fraud.
What to Look Out For
There are several documents which require more stringent consideration of the validity of the electronic signature compared to other documents. These include:-
- Signatures required to be witnessed
- Numerous documents demand a signature attesting a witness to the principal’s signature of the document. Most electronic witness signatures suggest the document is not signed in physical presence. Although the validity of electronic witnessing is yet to be tested by any court case, the appropriate method should still be to rely upon a physical handwritten signature.
- Although Deeds are subject to quite unique and old-fashioned legal requirements of form (being written on paper), the Queensland ETA does not suggest that Deeds should be electronically valid. Therefore, until amendments to this legislation are made, or case law approves Deeds to be in electronic form, the document should remain in the paper state.
- Registrable Documents:
- Although electronic signatures of these documents are not excluded by law, many third parties such as government organisations or banks will not accept an electronic version only. Therefore, to successfully register the document with said third parties, having paper signed documents is still the recommended choice.
With the increased uptake of digital devices in the modern world, we are set to see a big uptake in the use of digital devices to take electronic records such as signatures.