Did you know that you can sign certain legal documents using an electronic or digital signature? Before you start signing with your electronic or digital signature, here are a few things you should know.
Will my document still be valid?
You can validly execute documents using an electronic signature provided the following are met:
- the party using the electronic signature can be identified (and proven to be);
- the electronic signature identifies the person sending the information and indicates their approval of the document being signed;
- it is appropriate to use a digital signature as a method of signing; and
- the parties consent to receiving information electronically and the use of the electronic/digital signature.
Tips and traps
- It can be difficult to prove the identity of the party signing.
- Try using a “digital signatures” rather than electronic signatures as these more easily identify the party signing, making it more secure. Some digital-signature software providers offer certificates of completion that show a digital audit trail to help verify identity.
- The use of electronic/digital signatures does not apply to the Corporations Act. Therefore, unlike handwritten signatures, you cannot assume that the document has been duly signed by a company pursuant to the Corporations Act if the document is signed by any 2 directors, or a director and a company secretary or a sole director/company secretary. But don’t worry companies can still sign by electronic signature, you just can’t rely on this assumption.
- When dealing with parties overseas check that their laws allow parties to sign using an electronic signature. Also, understand the privacy laws that govern the use and collection of that electronic information. Let us know if you have any queries regarding either of these issues.
- Don’t worry not everyone is using electronic signatures yet but many of our clients are requesting “counterparts” clauses to be inserted into their contracts to confirm that they can sign the document and exchange it via email attaching a PDF copy of their signed document. This makes transactions easier when the two parties are interstate or overseas!
So, will you sign using any electronic/digital signature?
You can sign your next document using an electronic/digital signature subject to being able to prove the identity of the party signing. However, the potential for this issue has always existed, even with handwritten signatures (this is why individuals sign in front of a witness).
