eSignature Legality Guide

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According to PIPEDA, an electronic signature is defined as “a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to, or associated with an electronic document.” (PIPEDA, Part 2, Section 31(1)). In certain cases, PIPEDA also requires the use of a “secure electronic signature,” which is an electronic signature created using a technology or process specified by regulation, involving a series of prescribed steps for validity.

Under PIPEDA, a requirement for a signature under federal law can be met with an electronic signature if:

• The requirement is included in the relevant schedules to PIPEDA (currently, these schedules only reference certain provisions from the Federal Real Property and Federal Immovables Act, Canada Labour Code, Canada Land Surveys Act, and the Federal Real Property Regulations); and
• All regulations related to section 43 are followed. At present, only one regulation applies, and it concerns electronic signatures by the Minister or an authorized officer under the Federal Real Property and Federal Immovables Act.

In Alberta, BC, Ontario, and Quebec, the following types of transactions are generally permitted to use electronic signatures:

• Human resources documents, such as standard employment contracts, NDAs, employee invention agreements, privacy notices, benefits forms, and other onboarding paperwork;
• Business contracts between companies, including NDAs, purchase orders, order confirmations, invoices, procurement documents, software and tool license agreements, supply agreements, sales and distribution agreements, and service contracts;
• Corporate records, such as transfer instruments, directors’ and shareholders’ resolutions, government filings for corporate changes (e.g., address or directors), share subscriptions, and shareholders’ agreements (with some exceptions, like share certificates in BC that require manual signatures);
• Consumer contracts, including new account opening forms, sales and service terms, software licenses, purchase orders, order confirmations, invoices, shipping documents, user manuals, and policies;
• Certificates, licenses, notices, disclosures, reports, and similar documents from government bodies, unless specifically excluded by law; and
• Certain intellectual property agreements, such as trademark licenses and assignments.

PIPEDA mandates secure electronic signatures in specific situations, such as when a seal is required, for original documents, for witnessed signatures, for declarations of truth, and for statements made under oath. The Act also outlines the procedures to be followed for each document type.

In Ontario and Alberta, a legal requirement for a signature provided to a public body can be met with an electronic signature if:

• The electronic signature complies with any information technology standards set by the public body; and
• The electronic signature meets any requirements established by the public body regarding the method and reliability of the signature.

Quebec law allows the connection between a person and a technology-based document to be established by any process or combination of processes, as long as it enables:

• Confirmation of the person’s identity and, if relevant, their location, as well as their association with the document; and
• Identification of the document and, if necessary, determination of its origin and destination at any time.

Under PIPEDA, as well as the Alberta, BC, and Ontario Acts, if electronic signatures are allowed for a document, the definition is broad and permits various methods to fulfill signature requirements. To maximize enforceability, best practices include:

(a) authenticating the signer, including verifying authority for corporate signers; (b) obtaining clear consent from the signer—either in a separate agreement or within the document itself—that they intend to use the electronic signature; (c) ensuring the document is tamper-evident after signing; and (d) maintaining an audit trail of all signing actions.

The required level of authentication and consent may differ depending on the contract type, the parties’ relationship, and other circumstances.

In Quebec, the definition of a signature is not limited to a specific medium (paper or electronic). Therefore, as long as an electronic signature is a personal mark commonly used by an individual to indicate consent, it is valid unless a law specifically prohibits electronic signatures for that document.

Canadian courts, both federally and provincially, have upheld the validity of electronic signatures as long as there is clear intent to sign and some form of signature is present. Many cases focus on whether emails can serve as evidence of consent and signature. Notable cases on electronic signatures in Canada include:

• Leoppky v. Meston, 2008 Carswell, Alta 60 (Alta. Q.B)
• Roussel v. Desjardins Sécurité financière, compagnie d'assurance-vie, 2012 QCCQ 3835
• Vancouver Canucks Limited Partnership v. Canon Canada Inc., 2015 Carswell BC 854 (B.C. C.A.)
• Gryckiewicz v Ironside, 2015 ABQB 284
• I.D.H. Diamonds NV v. Embee Diamond Technologies Inc., 2017 Carswell Sask 154 (Sask. Q.B.), affirmed 2017 Carswell, Sask 484 (Sask. C.A.)
• Johal v. Nordio, 2017 BCSC 1129
• Tabet v. Equityfeed Corporation, 2017 QCCS 3303
• Lesko v. Solhjell, 2019 BCCRT 941
• Regent v Registrar of Titles, 2022 SKQB 102