Is the Electronic Signing of a Contract Valid?

While laws governing electronic signatures have been in force for the past two decades, the use of electronic signatures in conveyancing has only become commonplace in recent times. This insight considers the use of electronic signing in conveyancing, discussing the legal definition of electronic signatures, the validity of electronic signatures, the risks associated with signing electronically, and how you can safely sign your conveyancing documents electronically. In essence, electronic signing of conveyancing contracts is valid, so long as it complies with the provisions of the Electronic Transactions (Queensland) Act 2001 (Electronic Transactions Act). You must consent to the use of electronic signing, which is usually recognised in a conveyancing contract with a special condition. There are risks associated with electronic signing, such as the opportunity for fraud, but this can be alleviated through the use of the right software. Standard Law Co only uses the best software that ensures your identity and documents are secure. If you want your conveyancing contract signed electronically, Standard Law Co is here to ensure your signature is valid, binding and secure.

What is electronic signing?

In this day and age, the signing of paper contracts has become less common as electronic signing takes its place. Nowadays, almost everything is done online. Of course, you might assume that due to this common occurrence, the law would treat electronic signatures as functionally equivalent to a traditional, written signature. This is not entirely true.

When is it valid?

The key to a ‘valid’ electronic signature is consent. Under the Electronic Transactions Act, you must consent to giving your “signature” in the manner that you are giving it.⁵Electronic Transactions (Queensland) Act 2001 (Qld), s 14(1)(c).This requirement is usually satisfied by inserting a special condition in the contract that states that both parties acknowledge the use of electronic means of signing and consent to its use. The date of the Contract will be the time that both parties have signed it and the document becomes capable of being retrieved by the party that signed the document first.⁶Electronic Transactions (Queensland) Act 2001 (Qld), s 24. If this clause is not included in the contract, and there is a dispute over the validity of the signatures, it is difficult to determine consent. To comply with the Electronic Transactions Act, consent must be provided in advance. Consent can be reasonably inferred, so long as the act from which you infer consent from occurred before the document was signed.⁷ If you are concerned that your electronic signature may not be valid, please contact Standard Law Co immediately and we will assist you to resolve this issue.

What are the risks?

Undoubtedly, there are always risks when it comes to the use of technology. Contracts that are signed electronically do not require the signatures to be witnessed. Without the requirement for the witnessing of a signature, which should be carried out by a third person who is over the age of 18 and not a party to the contract, the risk of fraudulent transactions increases. Further, electronic signing can make it more difficult to determine the identity of the signatory. The signatory may not have full control of the email address that the document is sent to. Many people have their signature stored on their PDF software, such as Preview or Adobe Acrobat, which is stored without any password protection and can be easily accessed. Some of these issues have been resolved by new programs such as DocuSign and SignNow. Prudent lawyers will utilise these programs as they provide high-level security for files and use sophisticated technology to identify the signatories.

How can you use it in your conveyancing contract?

As is clear, there are benefits and drawbacks to electronic signing. It is faster and more convenient but does present opportunities for fraud. At Standard Law Co, we work with you to determine what is best for your circumstances. We only use the best software to ensure your documents are secure and the signing process is simple and efficient. We can assist you in the drafting of your conveyancing contract to ensure electronic signing is valid and complies with the Electronic Transactions Act 2001 (Qld). Throughout the conveyancing process, Standard Law Co continually minimises the risks that come with electronic conveyancing and provides you with the most secure, efficient and cost-effective service.