Electronic Signatures. When can they be used and what restrictions apply.

With advancements in IT, the continuing evolution of digital tools and COVID19, signing documents electronically has now become the norm but have you ever noticed how some electronic signatures look nothing like your handwritten one? So, what can you now sign electronically?  Is an electronic signature valid?  What, if any protections should you put in place?

What documents can you sign electronically?

So, let’s start with the basic question, what documents can you sign electronically.

There are now a many legal documents that can be signed and witnessed electronically including:

  • Commercial contracts
  • Agreements
  • Contracts of Sale of Real Estate
  • Affidavits
  • Statutory Declarations
  • Wills
  • Powers of Attorney

To execute some of these documents, it can be as easy as affixing an electronic signature through a Word or PDF program however, for other documents there is a set of legislative processes and requirements which must be complied with to enable execution and witnessing remotely. These processes and requirements provide protection to those persons signing these documents.

Whilst electronic signing is becoming increasingly popular, there are still some documents that require the standard pen and paper signing (known as wet signatures) and execution in the physical presence of a required witness.  There documents include:

  • Advance care directives
  • Appointments of medical treatment decision maker
  • International wills
  • Some banking and finance documents.

And of course, anything that can be signed electronically can still be signed using a wet signature if you don’t feel comfortable using the electronic signature option.

How to sign and validity

There are several IT programs and platforms that facilitate electronic signing.

Some of these programs have the technology to capture the exact time, date and location a signature was affixed to a document, called a digital certificate and this data is stored and can be reproduced and provided at a later date if necessary. These programs also often have an initial multi-factor authentication step to ensure that the correct person is opening and signing the document.

The actual signing process itself can be as simple as affixing an electronic signature through a Word or PDF program, by typing your name or using a touch screen to sign (whether your signature or a pre-prepared version generated by the document itself).

But regardless of how a document can be electronically signed (or whether it looks anything like your normal handwritten one), an electronic signature will be valid and considered to be legally binding if it meets the legal requirements (dependent on the document) and if it fulfills the same parameters as a wet signature which includes that the signature must:

  1. Represent the person’s name (or mark)
  2. Represent the person’s agreement to the terms in the document; and
  3. Be in the appropriate place on the document

A person signing electronically must ensure that they are identifying themselves properly by their name or mark and understand that by signing electronically they are showing their intention to enter into the agreement and are agreeing to use an electronic signature.

Benefits & Protections to keep in mind

So why would you consider using an electronic signature instead of a wet signature? Some of the benefits of electronic signatures include:

  • Convenience, as you can sign anywhere in the world
  • Speed, as it can facilitate signing of multiple documents at once
  • Streamline the process between multiple parties: by eliminating wait time as there is no need to schedule separate appointments or courier documents between parties
  • Environmentally friendly: There is no need to print any documents to sign and exchange
  • Save space as you don’t need to store documents in a paper-based file.

That being said, it is crucial that you protect your electronic signature in the same way as you would do with your identity and personal details by:

  1. Not saving an electronic signature to your Word/PDF programs or any other program on any of your devices;
  2. Requesting that a document is electronically signed using a technology which includes the digital certificate data;
  3. Using different email addresses for each signer.

The digital and online world will continue to be ever-changing so the option and choice of signing via electronic signature is here to stay.  Having said that if you’re at all concerned about signing electronically or you simply don’t want to use this method you are within your rights to request that you sign via the more traditional method, using a wet signature.

If you have any questions about electronic signing or if you need any other legal assistance, please contact us today on +61 3 9822 8588 or email us HERE.


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