Part 13: Signing in to the digital age

E-signatures are used around the globe and Australia is no different. With a resilient economy and fast urbanisation of infrastructure, Australia is an attractive country to conduct business in. It has also been ranked 18th in the 2018 World Economic Forum’s Global Competitiveness Report, proving the competency of Australia’s economic landscape.

Australia’s uninterrupted strong Gross Domestic Product growth in the past two decades indicates the potential for increasing growth, enticing international businesses to enter the Australian market.

E-signatures Australia

With international business activities, there is a demand for convenience which entails electronic signatures as part and parcel of business transactions. Therefore, it is important to keep yourself updated with Australia’s regulations with regards to e-signatures.

The Electronic Transactions Act was introduced in 1999 and adopts an open legal framework.

Read on to learn more about the legal compliance for electronic signatures in Australia specifically and watch out for more in this series on Southeast Asia, Hong Kong, China, New Zealand, Australia, UK, Cayman Islands, and BVI.

The Rules on e-signatures in Australia

Requirement for signature

(1) If, under a law of the Commonwealth, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication if:

(a) in all cases—a method is used to identify the person and to indicate the person’s intention in respect of the information communicated; and

(b) in all cases—the method used was either:

(i) as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or

(ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence;

Applicability of an Electronic Signature

(i) as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or

(ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence; and

(c) if the signature is required to be given to a Commonwealth entity, or to a person acting on behalf of a Commonwealth entity, and the entity requires that the method used as mentioned in paragraph (a) be in accordance with particular information technology requirements—the entity’s requirement has been met; and

(d) if the signature is required to be given to a person who is neither a Commonwealth entity nor a person acting on behalf of a Commonwealth entity—the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a).

With the international landscape, it is of more importance to understand the legal implications that come along with convenience. Here are some examples of when e-signatures are applicable in Australia:

Use Cases for E-sign

Instances where electronic signatures are generally considered appropriate:

HR documents, such as new employee onboarding processes including employment contracts, non-disclosure agreements, employee invention agreements, privacy notices, and benefits paperwork
licenses for intellectual property
commercial agreements between corporate entities, including non-disclosure agreements, invoices, purchase orders, sales agreements and service agreements
consumer agreements
residential and commercial lease agreements

Use Cases Requiring Physical Signature

There are some cases where a handwritten signature will be necessary. These include:

official Commonwealth documents such as passports
statutory declarations requiring a witness (excluded from ETA)
powers of attorney in certain States/Territories (Powers of Attorney Act 2014 (Vic) s 33)
wills, codicils and other testamentary instruments (excluded from ETA and notarization required by Succession Act 2006 (NSW))
bills of exchange
the signature, lodgement, service and filing of documents in connection with legal proceedings in certain States/Territories
certain documents under legislation relating to health insurance, life insurance and general insurance
certain documents, notices, and consents used in connection with the provision of credit related services under the National Consumer Credit Protection Act 2009 (Cth)
transfers of intangible property, such as intellectual property

This article does not constitute legal advice.

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

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