Law

Electronic signatures in the era of COVID-19

By 17 April, 2020 No Comments

The COVID-19 pandemic has seen a rapid and dramatic change in how the world does business. The rise in people working from home has led to a surge in online conferences and meetings and an increase in documents being exchanged electronically rather than in hard copy.  While e-signing has been around for years, the legal sector has been hesitant to adopt it in common practice and there remains some uncertainty surrounding the validity of electronic signatures.  This article addresses the use of e-signatures in Western Australia, to ensure the valid execution of documents executed electronically.

What is an electronic signature?

An electronic signature (or “e-signature”) is a computer-generated signature that identifies an individual either by the use of name or other mark as having assented to a communication or document.  An e-signature may be given when a person:

  • types their names in an email, word document, or online form;
  • inputs a digital image of their physical signature;
  • uses e-signing software such as DocuSign;
  • clicks ‘agree’ on a website; or
  • signs a document on a touchscreen with a stylus or finger.

When can an electronic signature be used?

Two main considerations arise when determining whether an e-signature can be used:

  1. Can the document can be signed using an e-signature?
  2. Are the requirements for a valid e-signature met?

Can the document be e-signed?

We set out below some examples of common documents requiring execution, and whether or not they are capable of being signed electronically.

Are the requirements for a valid e-signature met?

In summary, the three requirements for a valid e-signature are:

  • The identification of the other signing party;
  • Reliability of the method used to identify the other party; and
  • Consent of the other party to use electronic communication or e-signatures to meet the signature requirements.

If each of the above requirements is met and the document is capable of being e-signed, an e-signature can generally constitute legally binding execution by a person or company.

General tips when considering the use of e-signatures

  • If a deed is not strictly required but e-signing is imperative, you may consider whether it is preferable to use an agreement to protect against issues of validity arising in the context of deeds.
  • Where an e-signature is to be used, document the parties’ intent and consent in relation to the application of the use of e-signatures.
  • Ensure methods are in place to identify with certainty the person providing the e-signature and its authenticity.

Should you wish to obtain our advice in relation to the use of e-signatures, please contact us at pragma@pragma.law.

(Image source: Docusign.com.au)

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