The legality of Electronic Signing and ensuring compliance

The electronic signing (e-signing) and exchange of contracts in the property space has largely taken over the old-fashioned paper exchange of contracts following a concerted effort across the industry over the past 5 years. This was led by the introduction of multiple technologies which assist practitioners in processing, sending, signing, and exchanging a contract entirely electronically and the benefits of the awe inspiring cloud based computing and smart phones we (and more so our clients) have become accustomed to.

E-signing has now become commonplace across the industry allowing for practitioners to deal with issues faster and easier. This has given practitioners greater marketing reach than they otherwise may have experienced. They can now communicate almost entirely using technology with their client base, rather than having a fixed office where clients are required to meet them in person at some point during the transaction. With the prevalence of multiple platforms, programmes and marketing people touting their own digital signing platforms it is no wonder though there is so much confusion within the professional sector about what systems are or are not valid to ensure a properly binding contract.

This confusion can lead to significant problems for practitioners when disputes arise and as we continue to experience troubled financial times, with a particular focus on the property sector, the importance around the validity of contracts will no doubt become of greater concern to all parties in the times ahead. Many practitioners that deal in the dispute resolution space have already seen a significant jump in cases and expect to see many considered cases around the multiple issues of e-signing and contracts in the times ahead.

The world of e-signing; however, is not and does not need to be complex as many might have you believe. In fact, the laws allowing for these platforms have been in place since 1999. To put this in context Google was founded in 1998 and eBay in 1995. The Electronic Transactions Act 1999 (Cth) (ETA) was introduced, and States quickly followed by introducing essentially identical legislation n between 1999 and 2001. It was said to herald in a new age of complete electronic signing, contract, and data exchange between businesses with the hope of eliminating paper entirely.

Many think that the benefits have only recently started to show themselves without realising we have all likely conducted multiple business transactions on behalf of clients which relied on the ETA or its state counterpart, without even realising it. For example, every time we exchanged a contract over email using scanned copies. Because of the prevalence of more advanced software platforms commonly used in today’s conveyancing practice that have done away with paper contracts entirely, most practitioners have started to turn their minds to the legislation requirements.