Electronic Signatures - when can I use them?

With the rapid advancement of digital technology the use of electronic signatures has become more popular. This often raises the question as to when electronic signatures are able to be used, and when they can be substituted for traditional, hand-written, signatures in wet ink.

The general rules regarding electronic signatures are contained in Part 4 of the Contract and Commercial Law Act 2017. There is a general presumption to allow the use of electronic signatures wherever normal written/wet ink signatures are required.

Common examples of this include:

• Agreements for Sale and Purchase of Real Estate;
• Commercial agreements;
• Leasing documentation; and
• Director, Shareholder, or Trustee resolutions.

For an electronic signature to be valid, it must:

• Be able to clearly identify the signatory and their intention to sign;
• Be used only when the person receiving the signed information has consented to the use of electronic signatures; and
• It is considered “as reliable as is appropriate” (more on this below).

To establish whether the electronic signature is “as reliable as is appropriate”, it must meet the following requirements:

• The electronic signature must be linked to the signatory;
• The electronic signature was signed under the signer’s full control, without duress or persuasion from any other parties;
• Any alteration to the electronic signature made after the time of signing is detectable; and
• The legal purpose of the signature is to provide assurance as to the integrity of the relevant information and documentation.

Documents or instances where electronic signatures cannot be used include:

• Wills, codicils or other testamentary documents;
• Affidavits;
• Enduring Powers of Attorney; and
• Statutory Declarations.

Alongside this list, there may be some organisations, such as banks and other lending organisations, which may stipulate the use of hand-written/wet ink signatures only.

The use of electronic signatures is become very common, and in most circumstances, is just as suitable as traditional hand-written signatures.

If you are ever unsure, it is always best practice to seek guidance from the organisation who is asking you to sign the documents in question, as to whether an electronic signature will be acceptable.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.