eSignature Legality in Australia

E-Signature Legality Summary

The ETA specifically sets out requirements for valid electronic signature, consent, and retention of documents for the purposes of Australian Commonwealth law. Generally, these signing, consent, and retention requirements apply when dealing with Commonwealth government bodies or when transacting under certain Commonwealth legislation. Because of the federal nature of Australia, the States and Territories also have their own electronic signature laws (“Local ETA”), which largely follow the ETA, but include different exemptions and limitations. The relevant Local ETA will govern any documents being submitted to the State/Territory government and their instrumentalities.

Types of Electronic Signature

The ETA does not define an electronic signature per se, but does state that an electronic signature is legal and enforceable if it meets the following three requirements, which also apply under each Local ETA,:

• A method (e.g., the type of electronic signature) is used to identify the signer and to indicate the signer’s intention to sign the document;
• The method used is as reliable as appropriate for the purposes of the communication or is proven to identify the person and indicate their intention; and
• The signer consents to the method used, with such consent allowed to be express or inferred from the circumstances.

An electronic signature meeting the requirements of ETA (or Local ETA) may be required in certain use cases involving the government or where required by law. Under general common law, electronic signatures that do not meet ETA or Local ETA requirements may still be enforceable. In common law cases, courts likely will still use the ETA requirements as a baseline for what constitutes a valid signature. Courts will focus on the existence of clear and sufficient evidence of the agreed upon terms and conditions and of an intention by both parties to be contractually bound (plus an absence of fraud).

Documents That May be Signed Electronically

The following transaction types generally are eligible for the use of electronic signatures:

• HR
• Procurement
• NDAs (provided it is an agreement not a deed)
• Software licensing
• Healthcare
• Insurance
• Education
• Life Sciences
• Technology sector; and
• Documents to be recorded, though it depends on where they are to be recorded. Also, note that the ETA and Local ETA prescribe specific record keeping requirements).

Further Guidance

While the use of electronic signatures is not prohibited for the following transaction types, caution should be exercised before using electronic signatures for the below listed transactions:

• Corporate Resolutions
• Banking
• Lending
• Chattel Paper
• Consumer Transactions
• Government Filings
• Real Estate; and
• Documents to be Notarized

Some practical considerations to improve the enforceability of a document signed electronically may include:

• Where documents are not required to be in the form of a deed, converting them to agreements (by reviewing the wording of the document and requiring some form of consideration);
• Requiring the parties to provide consent to (and maintaining records of that consent):
  • The use of electronic communication for compliance with statutory requirements to give information;
  • The use of electronic signatures to execute the contract; and
• If any party is a corporation, inserting into the agreement:
  • A warranty by the signer that they are duly authorized to sign the contract electronically; and
  • If requested, a condition that evidence of authority to execute the contract be provided within a certain period.

Case Law

Since Australian courts generally accept that electronic signatures are valid, there is no seminal case articulating the courts’ approach to electronic signatures. Instead, courts focus on the evidentiary weight of the validity of signatures much the same way as they would consider the validity of a document if a document were executed in “wet ink” and had been alleged to have been forged or signed without proper authority. Below is an example of a case that demonstrates the potential issues and risks with electronic signatures, and witnessing of guarantees using an electronic document signing platform, though it does not comment on the validity of electronic signatures and attestations in the context of a deed.

• Williams Group Australia Pty Ltd v. Crocker [2016] NSWCA 265.