Part 14: Signing in to the digital age

What are the laws pertaining to e-sign in Cayman Islands?

A white-listed “tax haven”, Cayman Islands boasts no income taxes and a very stable political and robust economy. Cayman Islands is extremely attractive for businesses with its fast and flexible incorporation process.

Whenever conducting business outside of your own jurisdiction, you need to get yourself up to speed with the legislature to make sure you protect your interests for the future. If you’re going to be signing documents, it’s easiest to use E-sign. But first, let’s have a look at the particular laws for Cayman Islands.

And, watch out for more in this series on Southeast Asia, Hong Kong, China, New Zealand, Australia, UK, Cayman Islands, and BVI.

The Rules

The Electronic Transactions Law was enacted in 2000. There were also revisions to the act in 2003. In essence, the revised act states that –subject to certain requirements– contracts will not be excluded from having full legal effect by virtue of their execution with an electronic signature.

The specifics of the ETL for E-sign laws in Cayman Islands are as follows:

19. (1) Where the signature of a person is required by a statutory provision, rule of law, contract, or deed, that requirement shall be met in relation to an electronic record if an electronic signature is used that is as reliable as was appropriate for the purpose for which the electronic record was generated or communicated, in all the circumstances, including any relevant agreements.

(2) Subsection (1) applies whether the requirement for a signature is in the form of an obligation or the statutory provision, rule of law, contract or deed provides consequences for the absence of a signature.

(3) An electronic signature shall be reliable for the purpose of satisfying the requirement referred to in paragraph (1) if –

the means of creating the electronic signature is, within the context in which it is used, linked to the signatory and to no other person;
the means of creating the electronic signature was, at the time of signing, under the control of the signatory and of no other person;
any alteration to the electronic signature, made after the time of signing, is detectable; and
where a purpose of the legal requirement for a signature is to provide assurance as to the integrity of the information to which it relates, any alteration made to that information after the time of signing is detectable.

Applicability of E-Sign in Cayman Islands

A person relying on an electronic signature shall bear the legal consequences of his failure to:

–take reasonable steps to verify the reliability of an electronic signature; or
where an electronic signature is supported by a certificate, take reasonable steps to –

(i) verify the validity, suspension or revocation of the certificate; or

(ii) observe any limitation with respect to the certificate.

In determining whether, or the extent to which, a certificate or an electronic signature is legally effective, no regard shall be had to the place where the certificate or the electronic signature was issued, nor to the jurisdiction in which the issuer had its place of business.

The Cayman Islands has attractive policies and a stable political outlook. The forward-thinking view of the country and its adoption of technological advances makes it an even more appealing place to do business.

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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