Classification of Law
eSignature Legality Summary
Under Malaysian law, a written signature is not necessarily required for a valid contract - contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or in a physical paper document (The Contracts Act 1950 and applicable common law). The Electronic Commerce Act 2006 ("ECA") specifically confirms that contracts cannot be denied enforceability merely because they are concluded electronically. To prove a valid contract, parties sometimes have to present evidence in court. Leading digital transaction management solutions can provide electronic records which may be admissible in evidence under the Evidence Act 1950, to support the existence, authenticity and valid acceptance of a contract.
Use Cases for Electronic Signature
Use cases where an electronic signature is typically appropriate include:
- HR documents such as employment contracts, benefits paperwork and other new employee onboarding processes
- commercial agreements between corporate entities including NDAs, procurement documents, sales agreements
- consumer agreements, including new retail account opening documents
- real estate documents including Lease agreements, purchase and sales contracts, and other related documentation for residential and commercial real estate
Use Cases That Are Not Typically Appropriate for Electronic Signatures or Digital Transaction Management
Use cases that are specifically barred from digital or electronic processes or that include explicit requirements, such as handwritten (e.g. wet ink) signatures or formal notarial process that are not usually compatible with electronic signatures or digital transaction management.
- Handwritten - power of Attorney (section 2(2) ECA)
- Handwritten - wills and codicils and trusts (section 2(2) ECA)
- Handwritten - negotiable instruments such as bills of exchange, promissory notes etc. (section 2(2) ECA)
- Formal notarization - instrument effecting any dealing with real property under the Malaysian National Land Code
- Formal notarization - statutory declarations (Statutory declarations Act 1960)
- Formal notarization - bills of sale (Bills of Sale Act 1950)
- Formal notarization - moneylending agreement (Moneylenders Act 1951)
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing electronic signature may change quickly, so DocuSign cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.
Last updated: November 01, 2019