eSignature Legality Guide

Electronic Signature: Section 5 of the ECA describes an electronic signature as any letter, character, number, sound, symbol, or combination of these, created electronically and adopted by a person as a signature.

Section 9 of the ECA requires that an electronic signature must:

• Be attached to or logically linked with the electronic message;
• Clearly identify the signer and show their approval of the information to which the signature relates; and
• Be as reliable as appropriate for the purpose and circumstances in which the signature is required.

An electronic signature is considered “as reliable as is appropriate” if:

• The method of creating the electronic signature is uniquely linked to and under the sole control of the signer;
• Any changes made to the electronic signature after signing can be detected (tamper-evident); and
• Any changes made to the signed document after signing can be detected (tamper-evident).

Digital Signature: Under Section 2 of the DSA, a digital signature is defined as a transformation of a message using an asymmetric cryptosystem, allowing a person with the original message and the signer’s public key to verify:

• That the transformation was created using the private key corresponding to the signer’s public key; and
• That the message has not been altered since the transformation was made.

Section 62(1) of the DSA provides that if a law requires a person’s signature on a document, this requirement is met by a digital signature if:

• The digital signature is verified by reference to the public key in a valid digital certificate issued by a licensed certification authority;
• The signer affixed the digital signature with the intention of signing the message; and
• The recipient is not aware that the signer has breached any duty as a subscriber or does not rightfully possess the private key used to create the digital signature.

Section 2(1) of the ECA states that electronic signatures can be used for any commercial transaction carried out electronically, including those involving federal and state governments.

Section 2 and the Schedule of the ECA specifically prohibit the use of electronic signatures for the following types of documents:

• Power of Attorney
• Wills and Codicils
• Trusts
• Negotiable Instruments.

In addition to the above, the following documents generally require notarization or attestation by a commissioner for oaths or notary public, and may not be signed electronically:

• Instruments Dealing with Real Property
• Instruments of Transfers.

Section 6 of the ECA provides that an electronic message will not be denied legal effect, validity, or enforceability as long as the information is accessible to the person against whom it may be used, and it meets the definition of an electronic signature as described above.

Additionally, if the requirements for a digital signature are satisfied, the digital signature is considered as legally binding as a handwritten signature, thumbprint, or any other mark, and is treated as a valid signature.

The following two cases illustrate how Malaysian courts have addressed electronic signatures:

• Yam Kong Seng & Anor v. Yee Weng Kai [2014] 4 MLJ 478; and
• SS Precast Sdn Bhd v. Serba Dinamik Group Bhd & Ors [2020] MLJU 400.