Have you ever said you would do something for someone in an email? What about clicking ‘I Agree’ so that you can enter a website or install a program on your PC? However have you ever stopped to consider the legal implications of clicking ‘I agree’ or sending that email?

We are increasingly reliant on electronic communication and whether it is email, SMS, Facebook or signing up for an online service. At the same time, it is becoming increasingly important for Australian businesses to embrace e-commerce and completing transactions electronically. However, when it comes to electronic transactions the issue of what will and will not be deemed to be a signature or acceptance is not always straightforward.

What is a ‘signature’?  

People often merely think of a signature as the way they write their name on formal binding (physical) documents. In fact, a binding signature can be any mark on a document and can be a simple ‘X’ or stamp so long as it is securely ‘linked’ to a particular person and that person expressly or impliedly acknowledged that the mark was intended to be binding.

Importantly, Australian courts have applied this this principle to electronic media such as emails. In one NSW case, the courts held that as the plaintiff’s name appeared in an email that outlined an agreement between the parties, the email was found to be a note of a concluded agreement and the plaintiff’s type-written name was accordingly deemed to be a binding signature.

What is the law?

Electronic transactions in Australia are governed by Commonwealth and State electronic transactions laws including the use of ‘electronic signatures’ (also often referred to as ‘e-signatures’) where a signature is required under a State or Commonwealth law. There are four required elements under the Acts that an ‘electronic signature’ must meet in order to be legally valid and binding:

  • the party to be bound is identified;
  • indication of approval of the information communicated;
  • be as reliable as appropriate for the purposes at the time it was used; and
  • the party to who the electronic signature is required to be given must consent to the use of the electronic method.

These requirements are deliberately vague so as to allow for the fast pace of changes in digital technologies and e-commerce and unfortunately there have been very few cases that have considered the electronic signature provisions of these Acts.

What are ‘e-signatures’ and ‘digital signatures’?

An electronic signature is any method which applies a “signature” to an electronic medium and this can be the typed name of a party or an image of a handwritten signature.

Digital signatures are a subset of electronic signatures that use encryption technology so that person who receives a digitally signed message can accurately determine that the message was ‘signed’ by the use of the sender’s private ‘key’. Digital signatures are generally considered to be more ‘secure’ than other types of electronic signature which can often be easily replicated by unauthorised parties from one document to another by copying the image digitally.

Case Study

In one of the cases that have been heard the issue in question was whether an objection to a development application was in writing and signed and therefore a ‘properly made submission’ under Queensland’s planning laws. Brisbane City Council had adopted a policy of facilitating electronic submissions through its website and required:

  • the user to include identification information; and
  • the user to click an ‘I accept’ button after being asked to confirm the details of the submission and agree that the electronic submission had the same status as a signed submission.

The judge hearing the case decided that this method was appropriately reliable for the purpose and was therefore a properly made submission.