Electronic Signature Clause Example
An electronic signature clause example is a way of entering into a contract electronically.3 min read
An electronic signature clause example is a way of entering into a contract electronically. The legal framework for passing information and entering into contracts electronically can be found in Part 4 of the Contract and Commercial Law Act of 2017. This piece of legislation was previously the Electronic Transactions Act of 2002.
This document serves to make a way for legal requirements to be completed electronically rather than on paper in certain circumstances. It also provides clarity about the legal effects of transmitting information via electronic media. The wording of Part 4 has been specifically drafted to be technologically neutral. In other words, it does not refer to the use of any specific technology. In our world of fast-paced technological evolution, this legislation is easily adaptable.
The Principles of a Contract Remain the Same
Entering into a contract electronically is largely the same as doing so in the traditional paper-based manner. It requires an offer to be made by one party and accepted by another party. According to the Act, the contract becomes legally binding the moment it arrives in the recipient's inbox. The time at which the message is sent or read is irrelevant unless it is stipulated otherwise in the contract. It is important to note that contracts can be sent via email or text message.
A contract can be electronically accepted in numerous ways. It is common practice for businesses to send PDF copies of signed documents by email. This method, however, still requires documents to be printed and signed.
As part of the transformation to paperless offices, lots of businesses are looking for ways to sign documents and enter contracts without any documents needing to be printed. In order to make this happen, we need to see electronic signatures as having the same authority that handwritten signatures have always had. Digital signatures, which are a type of electronic signature, are a great way to meet this need.
An electronic signature is a digital way for somebody to establish their identity and prove that they accept the terms of a document. Electronic signatures can take a variety of forms, such as the following:
- Copying an image of a handwritten signature and pasting it into a document.
- Writing your name or signature using a stylus or keyboard.
- Clicking an “I accept” button.
Generally speaking, however, these methods do not have as much integrity as a traditional signature written by hand.
Digital signatures, on the other hand, are a type of electronic signature that complies with a set of requirements laid out in the Act. These criteria have been put in place to ensure that a digital signature is as trustable as a traditional signature written by hand. There are specific software applications that are required to meet the high standards laid out in the Act, and signatures on a PDF do not meet these criteria.
According to the Act, documents needing a signature may be signed electronically on the condition that certain criteria are met. These criteria are also applicable to witnesses' signatures. While witnesses are not necessary for the signing of every contract, this forms good practice for all digital signatures.
When it comes to general agreements which are not covered by the Act, the parties do not necessarily need to agree that the contract is allowed to be signed electronically. With that said, it is often helpful to include a clause which stipulates that the contract will be signed electronically.
Documents That May Not Be Signed Electronically
It is important to note that according to the Act, certain types of documents may not be signed electronically. These include the following:
- Powers of attorney.
- Statutory declarations.
- Bills of lading.
- Negotiable instruments.
A lot of the same rules apply to handwritten and digital signatures. Only the signatory can provide a digital signature, and he or she must provide his or her name and position, as well as the name of their organization. A digital signature also provides indication of approval of the contract, with all its terms and conditions, and indicates the intention to be legally bound by the contract. The signature must be deemed appropriate and reliable in the circumstances in which it is needed.
If digital signatures are required, they should be made using one of the applications which are in line with the statutory requirements. When using these applications, only the person signing the document is allowed access to his or her digital signature, and no changes can be made to the document after it has been digitally signed.
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