Use of electronic signatures in Singapore

At the outset, the Electronic Transactions Act, Chapter 88 of Singapore (the "ETA"), which came into force on 1 July 2010, provides for the legal recognition and use of electronic signatures. Under section 8 of the ETA, electronic signatures may be recognised as the functional equivalent of "wet-ink" signatures if the method used (a) can identify the signatory and indicates the signatory's intention in respect of the contents of the document; and (b) is appropriately reliable considering the purpose of the document or is proven to have fulfilled the requirements in paragraph (a).

While the ETA does not expressly define the term "electronic signature", it is generally understood as an acknowledgement provided by way of technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

This, however, is differentiated from a "digital signature" under the ETA, which is subject to further requirements under the ETA.

In determining whether something amounts to an electronic signature, the Singapore courts will generally look at whether the method of signature used satisfies the authenticating function of a signature, instead of whether the form of signature used is one which is frequently recognised.

Without a specific definition of "electronic signatures", they can possibly take different forms, subject to the legal requirements in the ETA being satisfied. Some examples of electronic signatures may include:

• a person typing his/her name into a contract or email containing the terms of the contract;
• a person electronically pasting his/her signature (e.g. in the form of an image) into an electronic version of the contract within his/her signature block;
• a person accessing a contract through a web- based signature platform such as DocuSign and Adobe, and clicking to have his/her name inserted into the contract in the appropriate place; and
• a person using a finger, light pen or touchscreen to sign his/her signature in the appropriate place in a contract

Excluded Matters

There are a number of matters that are excluded (the "Excluded Matters") from the application of the ETA. This includes, amongst others, the execution of a will, bills of exchange, bills of lading, the creation of a declaration of trust, power of attorney and any contract for the sale of immovable property.

These exclusions mean that, among other things, parties cannot rely on the ETA to satisfy the legal requirements of writing or signatures in relation to the Excluded Matters. It is therefore recommended that any document or transaction that falls within the scope of Excluded Matters should be signed using a "wet-ink" signature.

That being said, the Infocomm Media Development Authority Singapore ("IMDA") is in the process of reviewing the ETA, to ensure that the ETA continues to be progressive and to strengthen Singapore's position as a hub for electronic transactions.

One of the proposed amendments is to remove most business-related transactions while retaining personal or familial transactions in the list of Excluded Matters.

On 4 January 2021, the Electronic Transactions (Amendment) Bill (“Amendment Bill”) was introduced to Parliament. The Amendment Bill seeks to adopt (with modifications) the UNCITRAL Model Law on Electronic Transferable Records (2017), which enables the use of

electronic transferable records both domestically and across borders, such as bills of exchange, bills of lading, promissory notes and warehouse receipts etc. Consequently, the Amendment Bill seeks to, among other changes, remove such documents from the list of Excluded Matters.

It is noted that the Amendment Bill is part of a wider and ongoing initiative by the Singapore Government to review and support the electronisation of various types of instruments or transactions. We can expect further amendments to the ETA when the legislative and administrative frameworks supporting the electronisation of such instruments or transactions are ready to be enacted or implemented.

Practical issues arising from the use of electronic signatures

Examples of documents where electronic signatures are recognised pursuant to the ETA include the constitution, minutes of board/shareholders' meetings, written resolutions, proxy forms, service agreements, resignation letters and solvency statements. This list is not exhaustive. Companies may consult their lawyers or corporate secretarial agents for advice on whether a document may be signed using an electronic signature.

It should be noted that deeds and powers of attorney, which are commonly entered into by businesses, run the risk of unenforceability if executed by way of electronic signatures. We would thus strongly recommend that businesses avoid the use of electronic signatures in this context.

It is not necessary for companies to amend their constitution to expressly provide for the use of electronic signatures to execute documents, as the ETA may be relied upon for this purpose. Nevertheless, to address electronic risks, companies may consider

adopting internal guidelines relating to the use of electronic signatures, such as the method of electronic signatures approved for use by the company and security measures that may be implemented by the company. Companies may consult their lawyers or corporate secretarial agents for assistance in this regard.

To satisfy the requirements for an electronic signature under the ETA, the method of the electronic signature must be appropriately reliable, taking into account all relevant circumstances such as the purpose of the document. Appropriate safeguards should therefore be implemented to address the electronic risks that arise from the use of electronic signatures. We elaborate on this in the next section below.

Electronic risks

Technological advancement can be a double-edged sword. While electronic signatures and records can facilitate transactions for businesses, they are more susceptible to being tampered, modified or forged due to its very nature. For instance, an electronically scanned signature used legitimately in a transaction can be easily copied and used by a fraudster for a different document.

The pertinent challenges that businesses generally face include, without limitation:

• whether an electronic record/contract has been altered, modified or tampered with;
• whether there are adequate security measures put in place to protect the electronic signatures and electronic records;
• whether the identities of the parties involved can be ascertained;

• whether the parties involved in the transaction can trust each other due to the lack of a face-to- face meeting;
• if applicable, whether both parties have access to the third-party e-signature platforms, whether such platforms are secure, and whether such platforms are willing or able to provide evidence should a dispute arise; and
• if applicable, whether the corporate representatives of the parties involved have the relevant authorities to transact on behalf of their principals.

With these potential challenges looming, the use of electronic signatures should be evaluated with caution, especially with high-value transactions, transactions that require large payments to be advanced or transactions that are concluded entirely online without sufficient verification and authentication.

Ultimately, one should perform a cost-benefit analysis to determine whether the use of electronic signatures should be adopted in specific transactions.

There are practical measures, though not fool-proof, that may alleviate the risks of using electronic signatures, including:

• performing extensive "know-your-client" checks to assess the risk profiles of the counterparty;
• maintaining a list of authorised personnel who

A flourishing digital economy?

The use of electronic signatures in Singapore is no longer in its infancy and should be welcomed especially given Singapore's vision to become a Smart Nation powered by digital innovation. However, caution ought to be exercised and appropriate safeguards should be implemented to ensure that electronic signatures are securely used.

Due to the emergence of new technologies such as the Distributed Ledger Technology, Smart Contracts and biometrics, the nature of electronic transactions is also rapidly evolving. New legislative and regulatory developments will therefore arise from time to time, resulting in further implications for businesses, and businesses should keep abreast of these developments so that they can stay ahead.

This article was written by Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance). For more information, please do not hesitate to contact any of the team at Stephenson Harwood (Singapore) Alliance. We remain committed to assisting our clients during this challenging period.

using electronic signatures;

• performing call-back verification with the signatory;
• adopting technical security measures such as encrypted passwords and two-factor authentication, including the use of "digital signatures" as expounded under the ETA;
• adopting the use of "secure electronic records" and "secure electronic signatures" as expounded under the ETA; and
• engaging a Certification Authority who acts like trusted electronic notaries, certifying the electronic identities of users and organisations by verifying and vouching for the identity of the subscribers and providing certificate management services to support trusted and secure

External Resources

This article was written by Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance). For more information, please do not hesitate to contact any of the team at Stephenson Harwood (Singapore) Alliance.

Published, January 2021

Disclaimer:
The information in this website is provided for general informational purposes only. No information contained in this website should be construed as legal advice from SigniFlow or any individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this website should act or refrain from acting on the basis of any information included in, or accessible through, this website without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

Legality of Electronic Signatures in South Africa

LEGISLATION RELATING TO SIGNATURE VALIDITY

The Legality of Electronic Signatures is established in the Electronic Communications and Transactions Act of 2002, with amendments being made in 2011.

Section 1 - Definition of Electronic Signature & Advanced Electronic Signature

An electronic signature is defined as “data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature”. An advance electronic signature is defined as “an electronic signature which results from a process which has been accredited by the Authority as provided for in section 37”.

Section 11 - Legal recognition of data messages

This section provides that “information is not without legal force and effect merely on the grounds that it is wholly or partly in the form of a data message”, therefore providing authorisation to draft, store and access information in electronic format.

Section 12 – Writing

Section 12 addresses the requirement in most corporate agreements, which relates to a document and its amendments to be in writing. This section provides that the “requirement in law that a document or information must be in writing is met if the document or information is

(a)in the form of a data message; and

(b)accessible in a manner usable for subsequent reference.”

Section 13- Signatures

Section 13 is the most important section for the purpose of this document as it specifically deals with electronic signatures. The section provides that:

“(1) Where the signature of a person is required by law and such law does not specify the type of signature, that requirement in relation to a data message is met only if an advanced electronic signature is used”.

“(2) …an electronic signature is not without legal force and effect merely on the grounds that it is in electronic form”.

“(3) Where an electronic signature is required by the parties to an electronic transaction and the parties have not agreed on the type of electronic signature to be used, that requirement is met in relation to a data message if-

(a) a method is used to identify the person and to indicate the person’s approval of the information communicated; and

(b) having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated”.

“(4) Where an advanced electronic signature has been used, such signature is regarded as being a valid electronic signature and to have been applied properly, unless the contrary is proved”.

“(5) Where an electronic signature is not required by the parties to an electronic transaction, an expression of intent or other statement is not without legal force and effect merely on the grounds that -

(a) it is in the form of a data message; or

(b) it is not evidenced by an electronic signature but is evidenced by other means from which such person’s intent or other statement can be inferred” .

How SigniFlow conforms to the legislative requirements are set out in point 3.4 and 3.5 of this document.

TYPES OF ELECTRONIC SIGNATURES IN SOUTH AFRICA

Electronic Signatures

Provision is made for the legal recognition of electronic signatures and the ECT Act does not prescribe what type of technology must be used. Examples of electronic signatures include:

• your typed name at the end of your e-mail,
• a scanned image of your handwritten signature embedded into a Word document and
• a so-called digital signature.

The definition of an electronic signature ,as provided above in the ECT Act, is not very clear, however it can be simplified a bit and interpreted as the following - an electronic signature must be able to identify the signatory, the signature must be verifiable and it must be visible.

These characteristics all have to be in electronic format for it to qualify as an electronic signature. For an electronic signature to be recognised, the simple intention to sign is required, therefore if the intention for a name at the end of an email is to serve as an electronic signature, as discussed in the Spring Forest Trading v Wilberry judgment, it will be sufficient.

Digital Signatures

A digital signature (although not defined in the ECT Act), is a signature that originates with a digital certificate. A digital certificate is issued to a person, however that person first must be verified as the person who they are claiming to be. A digital signature requires not only a positive act of intending to sign the document but also has verifiable integrity as a result of the issued digital certificate.

A digital certificate is a positive identification of a device/server or entity that operates very similar to how an identity document identifies a specific person. A digital certificate is managed by a Public Key Infrastructure (PKI), which is a combination of hardware, software and procedures implemented in order to manage digital certificates

Advanced Electronic Signatures

An AES is defined in the ECT Act as “an electronic signature which results from a process which has been accredited by the Authority as provided for in section 37”. In short, an AES is a digital certificate-based signature, which utilises mechanisms to ensure security and integrity, as well as to confirm and verify the identity of the signatory. For clarity, AES consists of a positive act, the intent to sign, together with verifiable integrity (a person specific digital certificate based on confirmation of the identity of the applicant) with an added face-to-face verification mechanism, as well as 3-factor authentication (or similar).

As was seen in section 13(4) of the ECT Act, this signature is presumed to be valid, unless proven otherwise, therefore shifting the burden of proof away from the signatory and onto to the person who alleges.

LEGISLATION RELATING TO THE PRODUCTION AND RETENTION OF ELECTRONIC DOCUMENTS

How SigniFlow conforms to the legislation relating to the protection, production and retention of electronic documents is discussed in point 3.5 of this document. The following is only the legislative requirements set out in the ECT Act.

Section 14 -Original

(1) Where a law requires information to be presented or retained in its original form, that requirement is met by a data message if—

(a) the integrity of the information from the time when it was first generated in its final form as a data message or otherwise has passed assessment in terms of subsection (2); and
(b) that information is capable of being displayed or produced to the person to whom it is to be presented.

(2) For the purposes of subsection 1(a), the integrity must be assessed—

(a) by considering whether the information has remained complete and unaltered, except for the addition of any endorsement and any change which arises in the normal course of communication, storage and display;

(b) in the light of the purpose for which the information was generated; and

(c) having regard to all other relevant circumstances.

Section 15- Admissibility and evidential weight of data messages

(1) In any legal proceedings, the rules of evidence must not be applied so as to deny the admissibility of a data message, in evidence—

(a) on the mere grounds that it is constituted by a data message; or

(b) if it is the best evidence that the person adducing it could reasonably be expected to obtain, on the grounds that it is not in its original form.

(2) Information in the form of a data message must be given due evidential weight. (3) In assessing the evidential weight of a data message, regard must be had to—

(a) the reliability of the manner in which the data message was generated, stored or communicated;

(b) the reliability of the manner in which the integrity of the data message was maintained;

(c) the manner in which its originator was identified; and (d) any other relevant factor.

(4) A data message made by a person in the ordinary course of business, or a copy or printout of or an extract from such data message certified to be correct by an officer in the service of such person, is on its mere production in any civil, criminal, administrative or disciplinary proceedings under any law, the rules of a self-regulatory organisation or any other law or the common law, admissible in evidence against any person and rebuttable proof of the facts contained in such record, copy, printout or extract.

Section 16- Retention

(1) Where a law requires information to be retained, that requirement is met by retaining such information in the form of a data message, if—

(a) the information contained in the data message is accessible so as to be usable for subsequent reference;

(b) the data message is in the format in which it was generated, sent or received, or in a format which can be demonstrated to represent accurately the information generated, sent or received; and

(c) the origin and destination of that data message and the date and time it was sent or received can be determined.

(2) The obligation to retain information as contemplated in subsection (1) does not extend to any information the sole purpose of which is to enable the message to be sent or received.

Section 17 - Production of document or information

(1) Subject to section 28, where a law requires a person to produce a document or information, that requirement is met if the person produces, by means of a data message, an electronic form of that document or information, and if—

(a) considering all the relevant circumstances at the time that the data message was sent, the method of generating the electronic form of that document provided a reliable means of assuring the maintenance of the integrity of the information contained in that document; and

(b) at the time the data message was sent, it was reasonable to expect that the information contained therein would be readily accessible so as to be usable for subsequent reference.

(2) For the purposes of subsection (1), the integrity of the information contained in a document is maintained if the information has remained complete and unaltered, except for—

(a) the addition of any endorsement; or

(b) any immaterial change, which arises in the normal course of communication, storage, or display.

DOCUMENTS THAT CAN OR CANNOT BE SIGNED ELECTRONICALLY

Where the use of Electronic Signatures are concerned there are three types of documents, those that are not allowed to be signed using any electronic signature, those that can be signed electronically and the documents that require an Advanced Electronic Signature to be valid.

Documents that are, by law, not allowed to be signed electronically includes:

• Sales Agreements for land or buildings
• Wills
• Any document where another type of signature (i.e. non-electronic) has been agreed to
• Any document where the law requires another type of signature
• Long term lease agreements of 20 years and longer

Document that can be signed using an electronic signature:

• Service, sales, or lease agreements (except alienation of land)
• Non-exclusive licencing agreements
• Contracts of employment
• Credit agreements (subject to compliance with certain provisions of National Credit Act)
• Company Administration Documents (resolutions, share certificates etc.)
• FAIS mandates (mandates to intermediaries)
• VAT invoices
• Insurance Documentation
• Cessions
• Debit orders (depending on agreement with PASA)
• Declarations or waivers, except if subject to other Laws
• Emails and letters

Documents that require an Advanced Electronic Signature to be valid

• Documents containing suretyships
• Assignment or exclusive licensing agreement
• Documents used for pension fund administration
• Credit Agreements (without additional requirements for Electronic Signatures)
• Where there is a legal requirement for the document, signature, or statement to be notarised, acknowledged, verified, or made under oath
• Any document where a signature is required, by law, for the transaction to be valid
• Certification of documents as true copies of the original document
• Notarisation of documents required by law

Disclaimer:
The information in this website is provided for general informational purposes only. No information contained in this website should be construed as legal advice from SigniFlow or any individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this website should act or refrain from acting on the basis of any information included in, or accessible through, this website without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

Laws and regulations governing the use of electronic signatures and digital signatures in the UAE include:

• The E-Commerce Law (Law No. (1) of 2006 On Electronic Commerce and Transactions) which is the key piece of legislation governing the use of electronic signatures in the UAE.
• Ministerial Resolution (Minister of Economy Resolution No. 1 of 2008 issuing the list of the Electronic Certification Services Providers), which addresses regulation of Certification Service Providers (as defined under the E-Commerce Law) by the Telecommunications Regulatory Authority.
• Civil Evidence Law (Federal Law No. 10 of 1992 concerning Law of Evidence in Civil and Commercial Transactions (as amended by Federal Law No. 36 of 2006)) which clarifies that Electronic Signatures (as defined under the E-Commerce Law) carry the same evidential weight as handwritten signatures, provided they meet the standards prescribed in the E-Commerce Law.

The E-Commerce Law distinguishes between Electronic Signatures and Secure Electronic Signatures per the following descriptions:

• An Electronic Signature is defined as any letters, numbers, symbols, voice or processing system in electronic form applied to, incorporated in, or logically associated with an electronic message with the intention of authenticating or approving the same.
• A Secure Electronic Signature is one by which, through the application of a prescribed or commercially reasonable Secure Authentication Procedure agreed to by the parties, it can be verified that an Electronic Signature was, at the time of its execution:
  1. Limited to the person using it;
  2. Capable of verifying the identity of that person;
  3. Under that person's full control, whether in relation to its creation or the means of using it at the time of signing; and
  4. Linked to the electronic message to which it relates, in a manner which provides reliable assurance as to the integrity of the signature, so that if the electronic record is changed, then the Electronic Signature shall become unprotected.

In the UAE, an Electronic Authentication Certificate issued by an accredited Certification Service Provider may be used to fulfill the requirements of a Secure Electronic Signature if it verifies:

1. The identity of the certification services provider;
2. That the person whose identity is determined in the electronic authentication certificate had control at the time (of signing) of the Electronic Signature creation tool stated in such certificate;
3. That the signature creation tool was valid on or before the date of issue of the electronic authentication certificate;
4. Whether or not there are any limitations to the purpose or value for which the signature creation tool or the electronic authentication certificate may be used;
5. Whether or not there are any limitations to the scope or extent of liability accepted by the certification services provider to any third party.

In the UAE, a Certification Service Provider is defined as an accredited or authorized person or organization that provides services in connection or relation to Electronic Signatures. Authorized Certification Service Providers are listed at Telecommunications Regulatory Authority (TRA). To date, the only Certification Service Provider currently located and licensed in the UAE by the TRA is Dark Matter L.L.C. However, unregistered Certification Service Providers may be used if they have a level of reliability at least equal to that required by the E-Commerce Law (taking into consideration recognized international standards).

A key principle of the UAE E-Commerce Law is that Electronic Signatures and Electronic Authentication Certificates can be relied upon where reliance is acceptable (subject to any restrictions in other laws or regulations). In order to determine if it is acceptable to rely on an Electronic Signature or an Electronic Authentication Certificate, the following factors should be considered:

1. The nature of the underlying transaction;
2. The value or importance of the underlying transaction, if known;
3. Whether the relying party has taken appropriate steps to determine the reliability of the Electronic Signature or the Certificate;
4. Whether the relying party in respect of the Electronic Signature or certificate took reasonable steps to verify if the Electronic Signature was supported by an Electronic Authentication Certificate, or if it should be expected to be so supported;
5. Whether the relying party knew or ought to have known that the Electronic Signature or the Certificate had been compromised or revoked;
6. Any agreement or course of dealing between the originator and the relying party, or any trade usage which may be applicable;
7. Any other relevant factor.

While the above factors should be considered when determining if reliance on any Electronic Signature is acceptable, a Secure Electronic Signature carries a rebuttable presumption that reliance is acceptable (absent any proof to the contrary).

The E-Commerce Law confirms that if the law requires a document to be signed, an Electronic Signature will satisfy this requirement and have the same evidential weight, provided that the requirements of the E-Commerce Law are met. The E-Commerce Law also provides that in any legal proceedings, the rules of evidence cannot prevent the admission of a data message or Electronic Signature:

1. on the grounds that the message or signature is in electronic format; or
2. if the data message or Electronic Signature is the best evidence that could be obtained in lieu of the original.

Special Considerations

In the UAE, there are several items that require specific consideration, most notably that there are unique laws that govern the DIFC, an independent jurisdiction within the UAE. Additionally, special consideration should be noted regarding the laws that regulate the transfer and use of personal and transactional data in the UAE including:

1. The UAE Central Bank’s Regulatory Framework for Stored Values and Electronic Payment Systems, which regulates payment service providers;
2. The TRA UAE’s Internet of Things Regulatory Policy (IoT Policy)

Transacting with public sector entities

According to the E-Commerce Law Article 6(3), the government must expressly consent to conducting business electronically. Additionally, certain government entities may have specific requirements or procedures regarding the electronic execution of documents. Thus, when contracting electronically with the government, it is recommended to include specific wording stating that the government expressly acknowledges that the electronic execution of the document will be valid and binding.

Use cases that generally require a traditional signature

Under the E-Commerce law, Electronic Signatures cannot be used for the following documents:

1. Transactions and matters concerning civil status like marriage, divorce and wills;
2. Title deeds of real estate;
3. Bonds in circulation (i.e. negotiable instruments);
4. Transactions concerning the sale and purchase of real estate, its disposition and rental for periods in excess of ten years and the registration of any other rights related to it;
5. Any document required by law before Notary Public; and
6. Any other documents or transactions to be excluded by a special legal term.

Dubai International Financial Centre (DIFC)

As an independent jurisdiction within the UAE, the DIFC is governed by the Electronic Transactions Law No. 2 of 2017 (Electronic Transactions Law) which is the primary legislation governing electronic signatures. The Electronic Transactions Law was designed to:

1. facilitate electronic transactions in DIFC and eliminate barriers to electronic transactions resulting from uncertainties over writing and signature requirements;
2. promote the development of the legal and business infrastructure necessary to implement secure electronic transactions in DIFC; and
3. help establish uniformity of rules, regulations and standards in DIFC regarding the authentication and integrity of electronic records.

The Electronic Transactions Law defines an Electronic Signature as an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record. Additionally, the Electronic Transactions Law requires that an Electronic Signature be attributable to the person signing, which requires that it be shown that it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or Electronic Signature was attributable. The effect of an Electronic Signature attributed to a person is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law.

In the DIFC, an Electronic Signature is deemed to identify the relevant person and to indicate that person’s intention in respect of the Information contained in the Electronic Record provided that the Electronic Signature is:

1. as reliable as appropriate for the purpose for which the document or record was generated or communicated, in the light of all the circumstances, including any relevant agreement; or
2. proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence.

The Electronic Transactions Law confirms that if any law requires a document to be signed, an Electronic Signature will satisfy the requirement. The law also states that nothing shall prevent the admission of an Electronic Signature in evidence on the grounds that the signature is in electronic format. Although there is no express provision within the Electronic Transactions Law for the use of certificate-based digital certificates, an entity registered in the DIFC may choose to use a certificate-based digital signature to add an increased layer of protection to its Electronic Signatures and demonstrate that it had met the attribution requirements under the Electronic Transactions Law.

DIFC Special considerations

Under DIFC Data Protection Law No. 1 of 2007 (Data Protection Law), personal data can only be transferred out of the DIFC under the limited circumstances set out under the Data Protection Law. However, the obligations of the Data Protection Law only apply to Data Controllers.

DIFC Use cases that generally require a traditional signature

Article 8 of the Electronic Transactions Law states that the following types of transactions are excluded from being conducted electronically:

• Creation, performance or enforcement of a power of attorney
• Creation, performance or enforcement of a declaration of trust (with the exception of implied, constructive and resulting trusts) and any provision in the Trust Law 2005 requiring Information to be written or in writing
• Creation and execution of wills, codicils or testamentary trusts
• Creation, execution and use of affidavits or affirmations as evidence in court proceedings pursuant to rule 29 of the Rules of the Dubai International Financial Centre Courts 2014
• Sale, purchase, lease (for a term of more than 10 years) and other disposition of immovable property and the registration of other rights relating to immovable property

Source helpx.adobe.com
Published, December 9, 2020
Adobe Legal Notices: https://helpx.adobe.com/legal/legal-notices.html

SigniFlow recommends Adobe Acrobat Reader to validate digital signatures

Disclaimer:
The information in this website is provided for general informational purposes only. No information contained in this website should be construed as legal advice from SigniFlow or any individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this website should act or refrain from acting on the basis of any information included in, or accessible through, this website without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

Comment Concerning Use of Electronic Signatures and Third-Party Opinion Letters
By: TriBar Opinion Committee, American Bar Association

Parties to business transactions and their counsel seldom gather in the same location to exchange manually-signed agreements and other documents; virtual closings have been and are the norm.* The COVID-19 crisis has resulted in increased focus on the widespread practice of giving opinions on the execution of agreements signed electronically. This Comment explains the legal basis for the conclusion underlying those opinions that the electronic signatures on those agreements have the same legal effect as manual signatures.

The Uniform Electronic Transactions Act (UETA) is the law in all but a few United States jurisdictions, and the Electronic Signatures in Global and National Commerce Act, 15 USCA §§ 7001 et seq. (E-SIGN), is federal law. E-SIGN provides substantially the same rules as UETA.

The interplay of UETA and E-SIGN is as follows:

• E-SIGN is the law in states that have not adopted UETA or a statute providing alternative procedures for the use of electronic signatures consistent with E-SIGN.
• If a state has adopted UETA, E-SIGN does not pre-empt UETA in that state, except to the extent the state’s version of UETA is inconsistent with E-SIGN.
• If a state has adopted alternative procedures for the use of electronic signatures consistent with E-SIGN, E-SIGN does not pre-empt those procedures.

The net effect of these rules is that every jurisdiction in the United States has substantially the same rules for the use of electronic signatures. (New York has enacted the Electronic Signatures and Records Act, State Technology Law §§ 301-309 (ESRA). ESRA is different from UETA but that should not change the result that an electronic signature will ordinarily be effective because if ESRA is not consistent with E-SIGN, it is pre-empted by E-SIGN.)

Generally, UETA and E-SIGN provide that a signature may not be denied legal effect solely because it is in electronic form. UETA § 7; E-SIGN, 15 USCA § 7001(a). When the parties to a business contract subject to one of these statutes agree to use an electronic signature, the electronic signature ordinarily will have legal effect. The agreement of the parties can be implicit and can be based on all the circumstances broadly construed. UETA § 5(b). An opinion, therefore, that a business agreement has been duly executed can be based on the parties’ conduct. Under UETA, the exchange of electronically-signed documents manifests the requisite agreement of the parties to use electronic signatures.[1] Electronic signatures include signatures in emails, PDFs, and faxes and signatures provided by processes offered by commercial firms, [redacted] so long as they are affixed to or associated with the relevant agreement with an intent to sign by the persons providing them.

Except for agreements governed by Articles 2 (sales of goods) and 2A (leases of goods) of the Uniform Commercial Code (UCC), UETA and E-SIGN do not apply to agreements to the extent the agreements are governed by the UCC. The UCC governs only certain aspects of transactions within its scope, leaving the remaining issues to be governed by other law. The definition of “sign” in Article 1 and the definition of “authenticate” in Article 9 provide substantially the same rules as UETA and E-SIGN for the use of electronic signatures. Thus, for example, in cases where an agreement that bears an electronic signature does not qualify as a “negotiable instrument” for UCC purposes because it is not a “writing,” execution by electronic signature pursuant to UETA or E-SIGN (or other consistent state law) is still sufficient to create an enforceable agreement as a matter of contract law.

Agreements sometimes require that they and any amendments be signed manually. When giving a duly executed opinion, therefore, on an agreement or amendment that has been signed electronically, the opinion giver must confirm that the agreement does not prohibit electronic signatures.

As a matter of customary practice,[2] duly executed opinions can be based on an assumption, which may be unstated, that all signatures are genuine. That assumption applies to electronic as well as manual signatures.

The legal effect of the execution of a business agreement by a legal entity could also depend on the statute under which the entity was formed and the provisions in the entity’s constituent documents relating to its internal actions. For example, the entity statutes of some states provide rules for the electronic execution of documents needed to create the entity and written consents authorizing the signing of agreements on its behalf. See, e.g., Delaware Limited Liability Company Act § 18–113; Delaware General Corporation Law §§ 141(f) and 228(d)(1).

*The TriBar Opinion Committee currently includes designees of the following organizations functioning as a single Committee: (i) Special Committee on Legal Opinions in Commercial Transactions, New York County Lawyers’ Association; (ii) Corporation Law Committee, The Association of the Bar of the City of New York, and (iii) Special Committee on Legal Opinions of the Business Law Section, New York State Bar Association. The Committee also includes members of the state bars of California, Delaware, Georgia, Michigan, North Carolina, Pennsylvania, Texas, and Washington, of the Bar Association of the District of Columbia, and of the Boston Bar Association, and the Chicago Bar Association. The views expressed in this Comment reflect a consensus of the members of the TriBar Opinion Committee and on any particular point are not necessarily those of particular members of the Committee or the law firms and other organizations with which the members are associated.

[1] Although not applicable to the question whether an electronic signature on an agreement is valid, the Committee notes that the Governor of New York issued an Executive Order on March 19, 2020 in connection with the COVID-19 crisis providing for the use of audio-video technology for notarial acts.

[2] See TriBar Opinion Comm., Third-Party “Closing” Opinions, 53 Bus. Law. 591, § 2.3(a) at 615 (1998).

Source: American Bar Association
americanbar.org
Dated: April 07, 2020
ABA Terms of use: https://www.americanbar.org/about_the_aba/terms/

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