Electronic signatures (or e-signatures) are common in Australia and regularly used for business transactions. Australian laws regarding electronic transactions start from the basis that all types of electronic signatures are just as enforceable and admissible as traditional “wet” signatures, providing that they meet three conditions. They must:
Australian laws around electronic transactions are complicated by the federal nature of the country’s government. At the Commonwealth (i.e. national) level, the key legislation is the Electronic Transactions (ET) Act 1999, which applies to transactions governed by Commonwealth laws. The Electronic Transactions Regulations 2000 then set out which transactions and Commonwealth laws are exempt from the Act, and so require a traditional signature. Additionally, each State and Territory in Australia also has its own electronic transactions legislation, which broadly mirror the Commonwealth ET Act but include some specific exceptions that apply when a transaction is governed by the laws of the relevant State or Territory.
Various court cases in Australia have upheld the validity of documents signed electronically. However, the threshold for the “reliability” requirement is reasonably low. For example, the courts have upheld the use of a stylus or finger on a computer trackpad to produce a signature similar in appearance to one sent by fax. Thus, when doing business with other jurisdictions where e-signature validity may be assessed differently or for specific compliance requirements, use of certificate-based digital signatures, such as cloud signatures, should be considered as part of the workflow risk management strategy.
Australian law does not require electronic signature data to be stored only within Australia. However, if electronic signature data contains any personal information, it will fall under the requirements of Australia’s Privacy Act for disclosing personal data overseas.
In Australia, there are several use cases that generally require traditional signature. Additionally, there are several instances that require additional consideration for e-signatures legal compliance such as when transacting with public sector entities as well as laws that apply to a specific state or territory.
Transacting with Public Sector Entities
Under the Commonwealth ET Act, if you provide an electronic signature to a Commonwealth government department or agency, the method of providing that signature must meet the department’s specific information security requirements.
The Commonwealth Corporations Act
The Corporations Act 2001 is exempt in its entirety from the provisions of the Commonwealth ET Act. This means that any provisions of the Corporations Act requiring a signature can only be satisfied using a traditional wet signature.
Aa a consequence, a person cannot rely on the statutory presumption in section 129(5) of the Corporations Act where a document has been electronically signed. This section provides that a person may assume a company has duly executed a document if the document appears to have been signed by either two directors of the company, a director and a company secretary of the company, or the director of a proprietary company who is the sole director and sole company secretary. This presumption will only arise where the document has been signed using a wet signature.
Australian State and Territorial Law
The relevant legislation in each Australian State and Territory is:
As with the Commonwealth ET Act, in some States and Territories regulations set out which transactions and laws are exempt from that State or Territory’s electronic transactions legislation. The particular types of exemption are different in each State or Territory.
The main regulations are:
Use Cases that Generally Require a Traditional Signature
The particular exemptions differ in each jurisdiction. However, in general there are five categories of transactions that are exempt:
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