The COVID-19 pandemic has disrupted multiple facets of society.
One hurdle businesses have had to deal with is executing documents when the signatories are working remotely or constricted by social distancing laws.
In the construction industry, this has included executing tender submissions, construction contracts and subcontracts, deeds of release and statutory declarations.
Below are the different ways documents can be executed remotely, including the temporary regulations that have been enacted in various states to facilitate the electronic signing of documents during COVID19.
Generally, simple contracts can be electronically executed without the COVID-19 regulations.
For a simple contract, which most standard construction contracts are, contracts can be signed electronically by parties, depending on whether the contract is being signed in an individual capacity or on behalf of a company.
Individuals: Where a contract is being signed by an individual, contracts can be signed with a personal electronic signature without the need for a ‘wet ink’ signature or witness.
Companies: At general law, a simple contract can be in electronic form and executed electronically.
However, the law regarding electronic signatures under s 127 of the Corporations Act remains unsettled. If the document is an agreement, electronic execution under s 127 may still be valid at common law, but the counterparty is not able to rely on the statutory assurance of the validity of its execution.
In all cases, parties will need to be able to demonstrate that there was a clear intention to be bound by the contract, and that the signatory had the requisite authority to sign the contract.
At common law, a deed must be:
The rules relating to the valid execution of deeds vary between Australian jurisdictions and depend on whether the party that is executing the deed is an individual or a company.
Recent legislative changes in NSW have expressly permitted deeds made by natural persons in electronic form with electronic signatures and attestation (Conveyancing Act 1919 (NSW) s 38A).
However, a witness must be physically present and must sign the same document at the same time as the signatory.
The common law requirement for paper, parchment or vellum remains in most other Australian jurisdictions.
In some states, this has been modified by the COVID-19 temporary regulations, as set out below.
COVID-19 temporary regulations
NSW: Under the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 witnessing can validly occur remotely (albeit temporarily) via an audio-visual link (such as Zoom or Skype), provided the witness:
However, this does not address the uncertainties of a company executing a deed electronically under s 127 of the Corporations Act.
Victoria: The new temporary regulations under the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 similarly permit deeds to be signed electronically and include remote witnessing provisions.
Queensland: The Justice Legislation (COVID-19 Emergency Response—Wills and Enduring Documents) Regulation 2020 (as amended) have introduced new rules in Queensland which allow the electronic signing of deeds, and certain other enduring documents, and the witnessing of certain documents by way of audio-visual link.
The rules around electronic signing of documents in Australia remains fragmented and uncertain in many jurisdictions. Whilst some temporary measures have been introduced to allow parties to more easily transact during COVID-19, uniform reform is now needed more than ever to facilitate the electronic execution of documents.
Authors: Scott Alden & Victoria Gordon
Construction partner Scott Alden and associate Victoria Gordon, together with associate Krishneel Kumar and lawyer Andrew Morello, will be covering everything you need to know about the electronic execution of deeds and documents by individuals and companies in a webinar on 21 July 2020. Click here for more information and to RSVP.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.