eSignature Legality in Australia

E-Signature Legality Summary

The ETA sets out requirements for valid electronic signatures, consent, and document retention under Australian Commonwealth law and primarily applies when interacting with Commonwealth government bodies or when transacting under certain Commonwealth legislation. Due to Australia’s federal structure, each State and Territory also has its own electronic signature laws (“Local ETA”), which largely follow the ETA, but may include different exemptions and limitations. The relevant Local ETA governs any documents submitted to the State or Territory government and their agencies.

Separately, the CA sets out requirements for valid electronic signing of documents (including deeds) by Australian companies, reflecting many of the elements outlined above for the ETA. The CA also provides for electronic exchange, delivery of documents and recording of resolutions electronically.

Types of Permitted Electronic Signature

The ETA does not define an electronic signature per se, but does state that an electronic signature is legal and enforceable if it meets the following three requirements, which also apply under each Local ETA:

1. A method is used to identify the signer and to indicate the signer’s intent to sign the document;

2. The method used is as reliable as appropriate for the purposes of the communication or is proven to identify the person and indicate their intention; and

3. The signer consents to the method used, either expressly or as inferred from the circumstances.

An electronic signature that meets ETA (or Local ETA) requirements may be required in certain cases involving the government or where required by law. Under common law, electronic signatures that do not meet ETA or Local ETA requirements may still be enforceable. Courts will likely reference ETA requirements as a baseline for validity, focusing on clear evidence of the agreed upon terms and mutual intent to be contractually bound, plus an absence of fraud.

The CA also does not define an electronic signature per se and applies similar requirements to those mentioned above for the ETA.

A key requirement for electronic signing in Australia is evidence of “personal authentication” from the signatory, that is, evidence from the signatory that their electronic signature was applied by them personally or by someone else under the signatory’s direction and with their authority and knowledge.

Also note that the ETA, and local ETA and CA prescribe specific record keeping requirements.

Documents That May be Signed Electronically

The following transaction types generally are eligible for the use of electronic signatures:

• HR;

• Procurement;

• NDAs;

• Software licensing;

• Healthcare;

• Insurance;

• Education;

• Life Sciences;

• Technology Sector;

• Corporate Resolutions;

• Banking;

• Lending;

• Chattel Paper;

• Consumer Transactions;

• Real Estate; and

• Documents to be recorded or registered, though it depends on where they are to be recorded or registered.
  

Further Guidance

The linked ebook Electronic Contracts and Electronic Signatures Under Australian Law provides additional information on:

(a) electronic execution by companies under s127 of the Corporations Act 2001 (Cth) (“Corporations Act”); and

(b) State-based legislation for individuals signing deeds and other special documents.

While the use of electronic signatures is not prohibited for the following transaction types, caution should be exercised before using electronic signatures for the following transactions:

• Government Filings; and

• Documents to be notarized.

Some practical considerations to improve the enforceability of a document signed electronically may include:

• Requiring delivery of an audit log or other record of key events and information regarding the signing process upon exchange of signed documents as evidence of personal authentication (or requiring the signatory to send a separate email confirming the electronic signature was applied by them personally or by someone else under their direction and with their authority and knowledge);

• Where documents are not required to be in the form of a deed, converting them to agreements (by reviewing the wording of the document and requiring some form of consideration);

• Requiring the parties to provide or collect consent (and maintaining records of that consent) to:

  • The use of electronic communication for compliance with statutory requirements to give information, and

  • The use of electronic signatures to execute a contract;

• If any party is a corporation, require signing by two directors or a director and company secretary (or sole director and secretary, if there is one) and by inserting into the document:

  • A warranty by the signer that they are duly authorized to sign the contract electronically. and

  • If requested, a condition that evidence of authority to execute the contract be provided within a certain period.

Seminal Case Law

Since Australian courts generally accept that electronic signatures are valid, there is no seminal case articulating the courts’ approach to electronic signatures. Instead, courts assess the evidentiary weight of electronic signatures much the same way as they would consider a “wet ink” signature’s authenticity, especially if it had been alleged to have been forged or signed without proper authority. Below is an example of a case illustrating issues and risks with electronic signatures and the witnessing of guarantees using an electronic document signing platform, though it does not comment on the validity of electronic signatures and attestations in the context of a deed.

• Williams Group Australia Pty Ltd v. Crocker [2016] NSWCA 265

Additional examples of Australian case law can be found in the ebook Electronic Contracts and Electronic Signatures Under Australian Law. These cases reveal that an electronic signature is enforceable.