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Electronic Signatures: Are they legal? Are they safe?

Written by Nixon Wenger Lawyer, Dan Poulin.

 

Not all contracts need to be written down or signed, an oral or spoken contract can generally be enforced by our court system, as long as there is enough evidence to convince the court that a contract actually existed. However, there are certain types of contracts which require that the parties sign the contract in order for it to be enforceable by our court system, such as Real Estate contracts. You may wonder whether a signature requirement means a person needs to put pen to paper, or if some kind of electronic signature would have the same effect. Further, you may wonder whether an electronic signature would be any more or less persuasive in court as proof that there actually was a contract.

First, electronic signatures have the same legal effect as handwritten signatures. Most provinces in Canada have passed legislation which clarifies that electronic signatures may be used, including the Electronic Transactions Act in British Columbia. This Act defines an electronic signature as “information in electronic form that a person has created or adopted in order to sign a record and that is in, attached to or associated with the record”. Therefore, an electronic signature does not need to look like a traditional signature, although sometimes images that have the appearance of a traditional signature are used.

The next question is whether an electronically signed document would be better or worse than a traditional signature if you needed to prove in court that a contract was signed. The answer is that neither electronic or traditional signatures are inherently better than the other, it depends on the circumstances in which the signature was made. For example, you may receive a contract document that appears to be signed by a person you expected to enter a contract with from a public fax service number. Alternatively, you may have the other party come to sign the contract document personally and also bring some other people to witness his signature. In the second scenario you would have much stronger proof that the other party entered the contract, as you would have the original document and people that could confirm the document was signed by the right person.

 

Similarly, some electronic signatures would be much better proof in court than others, as they can range from simply typing your name at the end of an email (which may not be very strong evidence, particularly if other people have access to your email) to verifiable digital signatures that can only be attached to electronic documents after the signor signs up for the digital signature service and passes verification procedures such as entering a password before signing. In fact, with the use of digital signature services like AuthentiSign or DocuSign some real estate agents and lawyers may not require a witness signature, as the digital signature service itself acts as a type of witness.

There is no need to be afraid of electronic signatures with respect to legality. However, just like regular signatures, you should ensure that if there would be significant consequences to a signature being challenged, there are safeguards in place that will provide you the evidence you need to enforce the legal document.

 

Categories: Business, Real Estate

 

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