Are electronic signatures valid?

Source: Canva

Are electronic signatures valid?

When you sign on the dotted virtual line or click to agree, you are agreeing to the terms electronically (whether you have read them or not!)

Electronic signatures definitely are valid in Australia for most general types of agreements.

There are some special cases that require more formal signature processes - such as in person signing with witnesses for certain documents and transactions - but even these have changed after the need for distancing over the past few years.

What does the law say? ⚖️👩🏼‍⚖️

The Electronic Transactions Act 2000 (Cth) (a national law) outlines that an electronic signature is as effective as a physical signature.

What is an electronic signature? ⚡

Electronic signatures can come in different types....

🌐 Browse wrap... where you 'agree' to website terms and conditions by visiting a website

👆🏼 Click to agree... where you 'sign' and agree by clicking a button or other indicator

🖼️ Electronic signature by image... you might insert an image of your own handwritten signature

⌨️ Electronic signature by typing... you might type in your name in a particular location to agree or have your name at the bottom of an email that you send and this confirms your agreement

✍🏼 Electronic signature by digital writing... where you might 'sign' by using a touch screen or touch pad to write your signature or name digitally

🤖✍🏼 Digital signature involving an electronic signature by digital writing plus meta data around your IP address and geo tag location when signing the digital document

... and many more!

All of these different types of signatures can be valid and binding (depending on the circumstances!) however some will be easier to enforce than others.

You also need to keep in mind that you need to ensure your contracts with consumers and small businesses are fair and balanced.

If you are trying to get your clients to agree to unfair terms by hiding them in fine print online, it is unlikely you will be able to enforce those unfair terms.

Some key cases on electronic signatures in Australia include...

⚖️ In 1990, the High Court of Australia held that an electronic signature was just as valid as a physical signature for the purposes of a contract - NSW v Verwayen (1990) 170 CLR 394

⚖️ In 2015, the full Federal Court of Australia ruled that an email containing an electronic signature was binding, even though the sender had not intended to create a binding contract.

The case involved a company that sent an email with an electronic signature to a contractor, agreeing to pay a certain amount for the contractor's services. The contractor then sued the company for breach of contract when it failed to pay the full amount.

The court ruled that the email was binding... it contained all the elements of a valid contract, including an offer, acceptance, and consideration - Toll v. Alphapharm

⚖️ In 2016, the High Court of Australia ruled that an electronic signature is valid even if it is not accompanied by a physical signature. A bank customer signed up for a credit card using an electronic signature. The customer later disputed the charges on the credit card, and the bank sued him for breach of contract. The court ruled that the electronic signature was valid, even though it was not accompanied by a physical signature, because it met all the requirements for a valid contract. - Paciocco v. ANZ Banking Group

⚖️ In 2016, the Supreme Court of NSW ruled an electronic signature is binding even if the signer did not intend to create a contract. A woman had signed up for a dating website using an electronic signature and she later sued the website for breach of contract when it failed to provide the services she had paid for. The court ruled that the electronic signature was binding, because it contained all the elements of a valid contract.- Roberts v. John Doe

If you want to get to the bottom of your online contracts, digital documents, and electronic signatures, reach out for a friendly chat with a Checklist Legal lawyer.

Book a contract strategy session, and let's talk Fair Terms:

Cheers,

Verity