Overview of electronic signature law and its legality in Australia
Every day in the business world thousands of contracts and deals are signed and closed worldwide. Fortunately, there is no need to wait hours or days for your party to sign a proposal, quote or contract. Thanks to electronic signatures, businesses have the opportunity to collect signatures mere minutes and streamline their processes.
However, even though UN Electronic Communications Convention claims that there are no differences in the legality between electronic signatures and wet-ink ones, there are still unique cases and implications in different countries. To be prosperous and quickly react to changes, one should be aware of laws in the particular country where the electronic or digital signatures will be applied. If your documents are connected to Australia, you have to be familiar with any electronic signature Australian laws. Data supports this because, by 2020, it is estimated that over 100 million electronic signature transactions will be made annually in Australia.
The electronic signature law in Australia
Electronic signature laws were established in Australia in 1999 by the Electronic Transactions Act. According to the law, almost all documents can be signed using eSignatures. Simply put, there is a minimum set of requirements and very clear enforceability for eSignature in Australia. The law is similar to the laws and legal acts that are valid in the USA, and there is no difference between a document has a handwritten signature or an electronic signature.
What documents can be signed electronically?
The legal acts and laws do not create any roadblocks for using eSignatures on documents. If anything the laws significantly improve business processes in Australia. Here are some sample documents that can utilize eSignatures:
- Nondisclosure agreements
- Procurement documents
- Terms of sale
- Employment contracts or any other HR documents
- Sales contracts and quotes
- Real estate documents or lease agreements
- License agreements
However, the legal acts and laws do have some restrictions on certain documents where an electronic signature should not be used. If documents are connected with migration or citizenship issues, electronic signatures can’t be applied.
This also refers to other documents like bills of exchange, wills, powers of attorney, and real estate transactions. But in general, there are no strict rules in laws and legal acts for obtaining electronic signatures in Australia. Even the most straightforward ways of signing can be treated as valid eSignatures.
Is there a need to witness or register an electronic signature in Australia?
When it comes to witnessing an electronic signature, there is still no general legal acts or laws that specify such moment. At the same time, if there is a need to register a document with a third party, there can be a possibility to sign them electronically. However, no one guarantees that this document with an electronic signature will be accepted without a valid wet-ink signature. Luckily for businesses, such issues are limited to specific documents and a few states.
What should I take into consideration when affixing an electronic signature in Australia?
There are a few points to consider: Who signs a document? What kind of a document is it? Was there intention to sign? Let’s explore them below.
Who signs a document?
If an electronic signature can’t be verified, the same laws as a wet-ink signature apply. Therefore, any signatory must ensure maximum security to his/her credentials they use to sign documents electronically. If a signatory uses a basic eSignature tool, they should have a secure password so that no one can use their account on their behalf.
These cases require professional electronic signature solutions with high-security measures to eliminate risks.
What kind of a document is it?
A signatory should be aware that an electronic signature is affixed to the right document they are signing. Usually, this is not a problem as the eSignature solution offers signees the opportunity to check the document information one more time.
Moreover, it is of particular importance to ensure that no edits will be made to the document after it is signed. Robust electronic signature solutions can prevent any further contradictions with legal acts and laws in Australia. Once a contract is signed, it should be sent to both parties who can easily track any revisions.
Was there an intention to sign it?
Before applying an electronic signature to a document, there should be a clear call-to-action asking for the recipient’s signature. A signatory should have a solid understanding that they are one step away from signing a contract or closing a deal.
Of course, eSignature solutions should provide a final contract review. A signatory should have a chance to look through the document before applying an electronic signature to avoid mistakes and errors.
Any other issues I should be made aware of?
As we stated, when it comes to electronic signatures, Australian laws do not differ from those in the USA. Also, most electronic and digital signature software is developed in the United States with the focus on the Australian market. Therefore, the software they produce most likely adheres to Australian and international laws. But, should any changes occur in the US, it might affect electronic signature Australian laws.
Electronic signatures have become increasingly popular in the legal world in Australia as well as globally. The pros outweigh the cons for many businesses. This drives Australia to be open to new technologies and apply a minimalist approach to electronic signatures with only a few restrictions. By utilizing electronic signatures hundreds of proposals, quotes, and contracts are signed daily leading to prosperous business processes and environments.