Currently, electronic acts and subsequently electronic signatures in documents are not enforceable in Australia, with the exception of certain documents in New South Wales. In New South Wales, the Transfers of Property Act 1919 (NSW) allows certain documents to be signed electronically by individuals (not companies). However, it was still unclear how the electronic signature was complied with and the transfer law did not provide any clarification. Traditionally, legal documents such as contracts and deeds were signed in ink and on paper. This method is called “wet ink signature”. If you would like to integrate digital signature software into your workplace or business policies and would like further guidance on the impact on your situation, please contact our Information Technology and Intellectual Property team. From a legal point of view, users should pay attention to the fact that the validity of a digital signature must be proven in case of dispute. The key to this is to ensure that you and the parties you deal with register digital signatures with a certificate authority and have access to an effective auditing system. Ideally, these features should be easy to purchase in conjunction with using your digital signature software. Most commercially available products have built-in audit systems that are easily accessible to track the progress of each digital signature. Ultimately, you need to make sure that you are satisfied with both your audit practices and those of the other party.
In the ordinary course of business, the conclusion and performance of a valid contract by electronic means fulfills these elements under international and Australian law and is treated as a paper contract. [1] In most cases, Australian courts have applied contracts and electronic signatures, provided that the elements of a contract are met. Many different software tools enable Australian businesses to comply with the latest regulations and requirements for digital signatures. With e-signature technology, businesses of all sizes are able to offer a positive digital experience to customers participating in online activities. For example, Loan Market, a major player in the Australian real estate and mortgage financing ecosystem, has fully digitized its offer by integrating electronic signatures into its MyCRM platform. Based in Sydney, New South Wales, Loan Market clients now have a completely paperless journey, saving both the client and broker time. Before the electronic signature, it was difficult to get documents signed with a wet ink signature, especially for people who lived far from their broker. The parties (signatories) to a contract, deed or other agreement can decide whether electronic signatures are appropriate. The electronic signature must: Under section 127, a corporation may sign a document, including deeds and agreements, if it is signed by 2 directors (or 1 director and the general secretary or sole director who is also the secretary of an owning corporation). It is not specified whether a section 127 document must be a paper copy with a wet ink signature.
Therefore, the parties would have to check whether a document has been validly signed, which would lead to uncertainties and additional costs. Ultimately, it is unclear whether an electronically signed document will be enforced by the courts under section 127. Over the past 20 years, electronic signatures have become more prominent in Australia. From a legal perspective, Australia was an early adopter of electronic signatures. In 1999, the Australian Parliament passed the Electronic Transactions Act. The Electronic Transactions Act 1999 gives electronic signatures the same legal status as handwritten or wet ink signatures. Although the United Nations Convention on Electronic Communications states that there are no differences in legality between electronic signatures and handwritten signatures, there are still unique cases and impacts in different countries. To succeed and react quickly to changes, one needs to know the laws of the respective country where electronic or digital signatures are applied. If your documents are connected to Australia, you should be aware of all Australian e-signature laws. The data confirms this, as it is estimated that more than 100 million e-signature transactions will be made annually in Australia by 2020.
There are practical problems when using digital signature products for smaller contracts. For example, it will probably be more difficult to verify the signer of an employment contract because the employee does not really need to create a CA. This verification function is then not available. This limits how the signature can be verified, although audit trails and other verification techniques inherent in the digital signature software itself continue to store this information, and these features can still be trustworthy. If these small types of contracts are a significant part of the documents you sign with digital signature software, the tool may not be worth the risk. The most important consideration will be whether, given the particular circumstances of your business, the ability to not rely on that particular layer of security defeats the purpose of using the software as a whole. There are specific Australian laws governing electronic signatures. These include the Electronic Transactions Act 2000 (Cth) (ETA), which applies to transactions governed by Commonwealth laws. There is also the Electronic Transactions Regulations 2000, which set out which transactions and Commonwealth laws are fully or partially exempt from ETA. These types of electronic signatures are specifically linked to an identity and can be easily verified.
Simple electronic signatures do not necessarily have these characteristics and are therefore more difficult to verify. A guarantee by the signatory that it is duly authorized to sign the contract electronically; and when it comes to making electronic signatures legally binding in Australia, there are notable outliers.
