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Law and Digital Technology: Electronic Signatures and DocuSign

Friday, March 01, 2019

Law and Digital Technology: Electronic Signatures and DocuSign

 

 

In June 2018, the REIQ released the 15th edition of the Residential House & Land Contract with notable changes. These changes included: the amendment of signature panels to enable parties to execute contracts by electronic signature; the addition of a definition for “Electronic Signature”; and the addition of Clause 12 which provides that the parties consent to executing the contract in electronic form with an electronic signature.

 

What do these changes mean?

 

In effect, Residential House and Land Contracts executed in electronic form with an electronic signature will be valid and enforceable.

 

This may appear to be a sudden adaptation of Australian law to digital technology. However, the digitalisation of contracts has been years in the making. In 2001, the Queensland Electronic Transactions (Queensland) Act was developed. This legislation provides under section 14 that an electronic signature will valid if the following requirements are satisfied:

  1. Identification & Intention - The electronic communication method must identify the person signing, and show that the person intends to be bound by the information communicated.
  2. Reliability - The method must be either:
    1. reliable as appropriate for the purpose of the contract;
    2. or, proven in fact to have fulfilled the requirement to identify the person and indicate the person’s intention to be bound by the contract.
  3. Consent - The person who signs the Contract must give consent to the electronic signing method.  

 

Does DocuSign comply with legislative requirements?

 

DocuSign is an electronic signature tool that facilitates compliance with legislative requirements as shown below.

  1. Identification & Intention - The parties to the contract attach their DocuSign signature in the specified place for signing.
  2. Reliability - Once executed a Certificate of Completion is produced and attached to the contract. This document contains; the name of each signing party, the form of authentication used, each party’s email address, the timestamp for sending, accessing and signing the contract, and the IP address used by each party.
  3. Consent - The REIQ 15th edition’s inclusion of Clause 12 complies with the legislative requirement of consent.

 

Can electronic signatures be used in other property related contracts?

 

A transaction is not invalid under State law if it takes place wholly or partly by electronic communication. It is important to note that any document, even a string of emails, can be considered a valid contract if there is identification and an intention to be bound.

 

Deeds

A deed cannot be validly executed by using an electronic signature, as under the Queensland Property Law Act it must be signed on paper.

 

Signing by a corporation

Currently there is no legislation barring a company from electronically signing the Contract. However, the common law definition of ‘signed’ limits the scope of the definition, and it is likely that this scope does not extend to ‘electronic signatures’.

 

Other REIQ Contracts

Other REIQ contracts include; Contract for Residential Lots in a Community Titles Scheme (11th edition), Contract for commercial Land and Buildings (7th edition) and Contract for Commercial Lots in a Community Titles Scheme (6th edition). It is important to ensure that the electronic signature complies with section 14’s requirements, particularly consent. To ensure that the contract is compliant, a Special Condition similar to Clause 12 should be inserted.

The development of legislation facilitating the use of digital technology for more efficient practice represents a step forward in Australian law. The ability to sign contracts digitally will be highly beneficial to agents, and it is exciting to see how the law will adapt to digital technology in the future.

 

 

Resources:

Christensen, Sharon “Standard land contract in Queensland goes digitial” Australian Property law Bulletin,

Electronic Transactions (Queensland) Act 2001 (Qld)

Reiq 

QLS


Blackhurst Law
 

QLS News

 

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