Electronic Signatures on Contracts and are they acceptable?

Electronic Signatures on Contracts and are they acceptable?

Will eSigning stand up in Court? The answer is yes!

Electronic signatures

The events of the last 18 months and changes from physical to virtual and electronic have meant many emerging ways of doing business have become mainstream and backed by law. One of the largest changes has been around electronic signatures and their acceptance.

With the changes to the Corporations Act 2001 (Cth) recently to allow for signing of corporate documents our contributor Garth Brown sheds some more light on the legality of electronic signatures and practicalities.

“The Australian Electronic Transactions Act 1999, says electronic executions of Contracts are valid under common law if the signing party has the authority and been identified.”

Essentially three items are required under Commonwealth law:

  • Verification of Identity – Identity App remote or in-house technology.
  • Reliability – A method used to create an electronic signature will not be held to be a higher standard of reliability than similar non-electronic methods of signing remotely, such as scanned PDF signatures.
  • Consent – Unconditional consent can be given by written, express consent or inferred by Conduct. If not given, the signature is not effective. Cases where Electronic signatures were found to be legally valid, Land v The Leasing Centre P/L & Anor 2014 VCC 910 (Australia) Person v Google.INC (US). Reference: https://www.infotrack.com.au/

During Covid-19, Federal, State and Territory governments introduced changes to enable increased use of electronic documents and signatures.

How does this impact law firms?

So, what does this mean for legal firms to implement such technology? What two boxes need to be ticked off?

  1. Identify the Client through Passports and Drivers licenses – implement technology employing facial recognition and document verification services (App technology talking to a government database to verify ID documents) e.g., “Infotrack ID” formerly known as “WebVOI”.
  2. Electronically signed authority from client authorising your firm to sign on their behalf when using electronic signatures.

Interestingly in America, some firms have moved to “Video Signatures”, where the client initiates iPhone Video identifying who they are and what they agree to sign, on what date and upload the video file to a Contract.

Are electronic signatures safe? Yes, they can be tracked by global positioning systems, exact times and locations via longitudes and latitudes, from apps designed to facilitate electronic signatures’, e.g. DocuSign

Garth Brown

www.conveyancers.net.au