An electronic signature is one that allows someone to sign documents digitally as an alternative to using the traditional handwritten method. This serves as a quicker and more convenient method of agreement and saves the trouble and mess with masses of physically printed out documents. In today’s day and age where going digital and online becomes more popular, there is a growing use of electronic signatures for various types of transactions, especially in Singapore. However, before one decides if an electronic signature is sufficient for its business transactions, they should know the laws that govern the use of the electronic signature.
The Electronics Transactions Act
When it comes to any transaction, Singapore’s contract law states that any contract is considered legally binding if the parties have clearly and willingly agreed, whether the agreement may be verbal, on paper or digital.
In Singapore, the use and security of electronic signatures is governed by the Electronics Transactions Act (ETA), which provides a legal foundation for the use of electronic signatures in contracts or transactions. This provides a certain set of standards and regulations that signatures must meet to be valid. This would ensure that the transacting parties have a reliable and appropriate set of rules to follow such that they can have concrete proof of the signed documents. The conditions that must be met are as such:
- There must be specific identification of the signed document. This refers to the ability for one to personally identify with the signature, such as a name, date or company address. This gives a unique value to the signature and not leave room for ambiguity.
- There must be a clear intention of the signer reading and agreeing to the transaction documents. It must be clear that the content and the signature are linked, such as it being in the same document and not separated.
- The electronic signature must be reliable and appropriate for which the electronic record was generated and communicated.
Once knowing the requirements to an electronic signature, it is also important to know that electronic signatures do not necessarily have to look like a copy of your handwritten signature on the screen. There are several forms that an electronic signature can take which still make them legally binding according to the ETA.
- The sender’s name used in an email – When typing out emails and signing off with your name, it can be considered as an electronic signature especially when using a corporate account that you are held accountable for. This signature proves that you have personally read and replied to the transaction through email. However it is ideal that it should be clearly expressed in such emails that the information communicated are legally binding so that one can be clear that the email itself is a transaction.
- Digitally scanned copy of a handwritten signature – This method serves to be a basic translation of what you would sign normally on paper but instead scanned and attached to an online document as an image. This would be accepted as it is in fact your normal signature just as an image.
- Using a mouse or touchscreen to draw your signature – A common method of creating an electronic signature is to use a touchscreen to physically draw out your signature straight onto and electronic document. This is commonly used in courier services where digitally drawn signatures are used to prove that you have personally received your items as it is convenient and can be directly accounted for.
- Clicking a button online – Clicking acceptance buttons or confirmation buttons that usually have “terms and conditions” attached to them can serve as a method of signifying an electronic signature, as you are able to confirm your transaction by personally clicking the button. This is commonly used in online retail platforms.
Cases where electronic signatures are commonly used in Singapore
With respect to Singapore, business and individuals can use electronic signatures to create legally binding documents. Here are some commonly used transactions and agreements:
- Commercial agreements between organisations
- Consumer agreements such as sales terms and conditions, purchase orders etc.
- Employment contracts and other HR related documents
- Software licensing agreements
- Copyrights and patent licenses
- Trademark licenses
- Service agreements
Cases where electronic signatures cannot be used
The ETA states that there are certain documents that have to be signed traditionally and not electronically. These documents will not be able to have a legally binding electronic signature and examples are as such:
- Negotiable instruments, documents of title, bills of exchange etc., that entitles a beneficiary or bearer to claim the delivery of goods or a payment of a sum of money
- The declaration or enforcement of powers of an attorney
- Legal actions or contracts of sale or disposition of real estate