You, like everyone else, are working from home, you don't have a printer, scanner or you just can't find a pen and then you realise you need someone to witness your signature but you are self-isolating – what do you do?
While the legal status of electronic signatures is still up for debate, it looks like we could get some further guidance to assist during these tough times. Last week the government passed the COVID-19 Legislations Amendment (Emergency Measures) Bill 2020, which includes regulation making powers in the Electronic Transactions Act 2000 to assist with signature, witnessing or attestation of documents for the next 6 months.
Our view is that most documents can be executed electronically. However, until the regulations are released, we recommend agreeing upfront with the party who is requiring the signature before executing anything electronically.
Here is a cheat sheet on where we are currently at.
- Agreements generally
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Do it! Agreements, unlike deeds, don't have the same formal signing requirements to be binding. It is widely accepted for parties to enter into agreements electronically.
- Deeds generally
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In all jurisdictions except New South Wales, for an instrument to take effect as a deed, it must be in writing and on paper, signed, sealed, delivered and in case of an individual signing, witnessed.
While many of the elements can be satisfied electronically, debate often arises around whether an electronically signed deed can satisfy the paper requirement.
Our view is that it can, by the parties agreeing upfront that once the deed is signed electronically, the first time it is printed will become the "original" paper form deed.
However, we suggest you agree upfront as this is not a universally accepted position.
New South Wales is the first Australian jurisdiction to expressly reform the law to abolish the common law requirement of "paper, parchment or vellum" and to give statutory validity to deeds in electronic form, which means a deed governed by New South Wales can exist wholly in electronic form (yay!).
- Witnessing
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Unfortunately, you can't witness electronically yet. The requirement is that the witness be in the physical presence of the person signing. We're hoping the new regs might relax this position such that video conferencing can satisfy this requirement. So find someone who isn't short-sighted to witness from 4 metres away.
- Companies under s127 of the Corporations Act
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Signing under section 127(1) is the standard method by which companies can execute a document under Australian law, as it offers the counterparty the benefit of certain statutory assumptions as to the signing officers' authority and capacity.
The CA permits a company to execute a "document" by two directors, one director and one company secretary, or a sole director and company secretary. Debate arises around whether a soft copy will satisfy the requirement of a "document" for the purposes of s127. We struggle to see how a soft copy isn't a document but until we receive further guidance we suggest the parties agree upfront whether they will accept companies signing under s127 electronically.
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