eSignature Legality Guide

None.

While the ETA does not provide a specific definition of an electronic signature, it states that an electronic signature is valid and enforceable if it satisfies the following three criteria, which also apply under each Local ETA:

• A method is used (such as a particular type of electronic signature) to identify the signer and show their intention to sign the document;
• The method is as reliable as appropriate for the purpose of the communication, or it is proven to identify the person and indicate their intention; and
• The signer consents to the method used, with consent being either explicit or implied from the circumstances.

Electronic signatures that meet the ETA (or Local ETA) requirements may be necessary in certain government-related situations or where required by law. Under general common law, electronic signatures that do not fulfill ETA or Local ETA criteria may still be enforceable. In such cases, courts are likely to use the ETA requirements as a reference point for what constitutes a valid signature, focusing on clear evidence of agreed terms, mutual intent to be bound, and the absence of fraud.

The following types of transactions are generally suitable for electronic signatures:

• HR
• Procurement
• NDAs (as long as they are agreements, not deeds)
• Software licensing
• Healthcare
• Insurance
• Education
• Life Sciences
• Technology Sector
• Documents to be recorded, depending on the jurisdiction

It is also important to note that the ETA and Local ETA set out specific requirements for record keeping.

Although electronic signatures are not expressly prohibited for the following types of transactions, extra care should be taken before using them in these contexts:

• Corporate Resolutions
• Banking
• Lending
• Chattel Paper
• Consumer Transactions
• Government Filings
• Real Estate; and
• Documents to be Notarized

To enhance the enforceability of electronically signed documents, consider the following practical steps:

• Where a document does not need to be a deed, convert it to an agreement by reviewing its language and ensuring some form of consideration is present;
• Require parties to give consent (and keep records of such consent) for:
  1. The use of electronic communications to meet statutory information requirements;
  2. The use of electronic signatures to execute contracts; and
• If a party is a corporation, include in the agreement:
  1. A warranty from the signer confirming they are authorized to sign electronically; and
  2. If needed, a condition that proof of signing authority be provided within a specified timeframe.

Australia is currently considering joining the United Nations Convention on the Use of Electronic Communications in International Contracts.

Australian courts generally recognize the validity of electronic signatures, so there is no landmark case specifically outlining the judicial approach to them. Instead, courts assess the evidentiary value of signatures in a manner similar to how they would evaluate a handwritten (“wet ink”) signature, especially if forgery or lack of authority is alleged. The following case highlights potential issues and risks associated with electronic signatures and the witnessing of guarantees via electronic signing platforms, though it does not address the validity of electronic signatures or attestations for deeds.

• Williams Group Australia Pty Ltd v. Crocker [2016] NSWCA 265