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Look for the e-signs when electronically executing a document

07 February 2022

#Corporate & Commercial Law

Published by:

Janelle Moussa

Look for the e-signs when electronically executing a document

COVID-19 has prompted many legislative changes, including some very important (and overdue) reforms in relation to the electronic execution of documents by companies. You may be aware of these changes, but from a practical perspective, what should you consider when getting a document e-signed and when should you question the validity of an e-signature? 

We set out below some practical considerations to help you determine whether a document has been validly executed by electronic means.

Refresh my memory

Essentially, company directors and secretaries can now electronically sign a document (or a copy or counterpart of the document) on behalf of the company.

A document is taken to be signed by a person if:

  1. they use a method that identifies them and indicates their intention in respect of the contents of the copy or counterpart;
  2. the copy or counterpart includes the entire contents of the document; and
  3. the method used is ‘as reliable as appropriate’ for the purpose for which the document is generated or communicated.

Okay, but how is this practically done?

There is no mandated or preferred method for e-signing. However, we are seeing a number of ways this has been done in practice, including:

  • through digital or cloud-based signing platforms (such as DocuSign and AdobeSign) to apply a ‘digital signature’ to a document;
  • by signing an electronic copy of the document with a stylus tool, finger or mouse; or
  • by copying and pasting an image of the signatory’s signature into an electronic copy of the document.

Relying on an electronic signature – practical tips

Depending on who is executing the document, the type of document and where and how it is to be executed, the commonly-accepted platforms, such as DocuSign, may not be available. So how can you be certain of the validity of the e-signature? Here are some ideas:

  • it may be good practice to have the person e-signing a document attach it to a covering email that contains a statement of their intent (e.g. “please find my signed copy attached”)
  • to minimise the risk that a signature was applied without the signatory’s consent (e.g. if someone in their office applied it and there is no attesting witness), consider asking the signatory to confirm that they personally applied their signature or that it was applied by someone else with their authority
  • maintain records of the steps taken and factors considered in connection with electronic execution of a document to help prove validity
  • stay familiar with current legislation and legislative instruments that permit electronic signing (given this space is evolving!).

Ultimately, what is appropriate for a particular document will depend on the relevant circumstances.  

E-signing reforms have provided greater flexibility, and it is likely that e-signing will continue to grow in popularity. We hope the tips above have got you thinking about your risk appetite and how to get comfortable with electronic execution.

If you have any questions or want to chat about e-signing, please contact us or send us your questions here.

Author: Janelle Moussa

  • Janelle is a lawyer in our national Corporate & Commercial Law group. She has authored this article for the February edition of Holding Redlich’s Junior In-House Monthly.

Disclaimer
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 article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Janelle Moussa

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