Technology is advancing at a rapid pace and the way we do business is faster than the way things were done twenty years ago. In both Australia and many other overseas jurisdictions, electronic signatures are now a valid way of executing contracts and agreements. Although initially there was some concern over whether an electronic signature was legally binding, authentication techniques are continually evolving to allow safer electronic execution.
In 2001, Queensland introduced the Electronic Transaction Act following the Commonwealth legislation (of the same name) in 1999. Under this legislation, an electronic signature is recognised under law as having the same effect as handwritten signatures, subject to certain qualifications which include consent by the recipient to receive electronic information, method of signing and the verification of identity.
A “digital signature” is a type of electronic signature which utilises technology to create a unique electronic “identity”. This is done through a randomly generated set of digits (known as a public and private key) which is used for identity verification as the key is only used and known to the person associated with it. The private key is retained by the “owner” of the signature, while the public key is sent to the party receiving the document which verifies the name linked to the digital signature and confirms that the contents of the documents have not been altered since the insertion of the digital signature.
For the avoidance of any confusion, a “digital signature” is not a signature that has been made by ink on a piece of paper and then scanned into a computer system.
While there remains some concerns that the identity of the person using the private key is not accurate, this is likened to a person fraudulently signing a contract with a handwritten signature.
If you are considering using electronic communication to conduct business, please ensure you are using a system which incorporates a range of security measures into the signing process, and which can be archived and retrieved as required. This becomes important in the case of a dispute as to when an agreement was validly signed.
Whether you are a business owner, employer or employee, if you need advice or would like further clarification, please contact one of our experienced solicitors.
This post is general information only. It is not a substitute for legal advice from a lawyer. If you have a legal issue, you should always contact your lawyer to obtain advice that is relevant to your circumstances.
