Legal Advice – Electronic Signing of Documents

We refer to your request for advice regarding the use of digital signing services and the enforceability of documents signed in this manner.

Section 9 of the Electronic Transactions (Victoria) Act 2000 (“ET Act”) governs the legality of electronic signatures in Victoria for most documents. Section 9 of the ET Act provides as follows:

(1) If, by or under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication if—

1. (a)  a method is used to identify the person and to indicate the person’s intention in respect of the information communicated; and
2. (b)  the method used was either—
   1. (i)  as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or
   2. (ii)  proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence; and
3. (c)  the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a).-Liability limited by a scheme under Professional Standards Legislation-23 Milton Parade, Malvern VIC 3144 T: (03) 9042 2070 Fax: 03 9832 0610 Web: www.clplawyers.com.au

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2. (2)  This section does not affect the operation of any other law of this jurisdiction that makes provision for or in relation to requiring—
   1. (a)  an electronic communication to contain an electronic signature (however described); or
   2. (b)  an electronic communication to contain a unique identification in an electronic form; or
   3. (c)  a particular method to be used in relation to an electronic communication to identify the originator of the communication and to indicate the originator’s intention in respect of the information communicated.
3. (3)  The reference in subsection (1) to a law that requires a signature includes a reference to a law that provides consequences for the absence of a signature.

By way of summary, under the ET Act contracts and agreements may be signed electronically if:

1. a reliable method is used to:
   1. identify the signatory; and
   2. the signatory indicates his/her intentions to be bound by the document being signed electronically.
2. the other party to the agreement consents to the signing method being used.

From a practical perspective, there is no requirement for a formal verification of identity to be carried out. However, the name of the person signing the document electronically should be made clear and inserted under the signature. A statement should also be inserted under the signature that the person signing electronically consents to entering into the contract/agreement using the method chosen and agree to be bound by the document being signed in that manner.

Consent to the electronic signing is highly likely made out if the other party also signs digitally/electronically. However, if the other party is physically signing the document with wet ink, then it would be best to either:

1. insert a condition in the document that states, “the parties consent to this document being electronically signed by any party and any party signing electronically acknowledges that they will be bound by their electronic signature”; or
2. obtain the written consent (by email) of the other side to the electronic signing of the document.

We also note that the ET Act does not define an ‘electronic signature’. Therefore, an electronic signature may be produced in one of the following forms unless the document/correspondence expressly excludes otherwise:

• an image of the person’s handwritten signature (i.e. by using ‘fill & sign’ in PDF etc.);
• a signature electronically written (i.e. by using a stylus or finger);
• the person’s typed name (i.e. on the area to be signed or if appliable in the circumstances, at the bottom of an email); or
• a digital signature (i.e. DocuSign, AdobeSign, DigiCert etc.).
  Given the added security of using a digital signature, it is preferable to use this method throughprograms such as DocuSign and DigiCert where possible.ExceptionsNotwithstanding the advice given above, there are certain documents that cannot ordinarily be signed electronically. They include, wills, statutory declarations, affidavits, powers of attorney. There is also a question mark as to whether deeds can be executed in this manner.However, new laws have been brought in to enable electronic execution of these documents as a result of Covid-19. This is set out in COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 (“Regulations”).The Regulations provide that for affidavits, deeds and mortgages, statutory declarations, powers of attorney documents, wills, codicils and other testamentary instruments, if an electronic signature is used, the person signing the document electronically must write or stamp under their signature a statement that the document was signed electronically in accordance with the Regulations.Put simply, the following needs to be written under the signature, “This document was electronically signed in accordance with the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020.”The electronic signing of the document must be witnessed using an audio-visual link (eg. Zoom) and the witness will still need to be satisfied of the identity of the signatory. The witness must also ensure that the following statement is written on the document, “This document was witnessed by audio-visual link in accordance with the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020.”

Summary

In summary, signing contracts and agreements electronically or by using digital signing services such as DocuSign is largely acceptable in Victoria, provided that conditions set out in this advice are met.

Other documents, such as wills, affidavits and statutory declarations may, for the time-being, be signed electronically pursuant to the Regulations. However, this may well change once Covid-19 has passed.

Should you have any further queries, please do not hesitate to contact us. Yours faithfully

Mark Lipshutz

CLP Lawyers