As technology progresses, we have moved from wet ink signatures (signatures on a physical paper document) to electronic signatures. So what should we know about this type of signature?
Digital signature vs Electronic signature
- Both terms are used interchangeably but they are two different concepts
- Both are recognized under Digital Signature Act 1997 (“DSA”), followed by the Electronic Commerce Act 2006 (“ECA”)
A) Digital Signature
- It is a subset of electronic signature.
- S2 DSA: “digital signature” means a transformation of a message using an asymmetric cryptosystem such that a person having the initial message and the signer’s public key can accurately determine—
- whether the transformation was created using the private key that corresponds to the signer’s public key; and
- whether the message has been altered since the transformation was made.
- As per s62(1) DSA, a digital signature is recognised where:
- that digital signature is verified by reference to the public key listed in a valid certificate issued by a licensed certification authority;
- that digital signature was affixed by the signer with the intention of signing the message; and
- the recipient has no knowledge or notice that the signer has breached a duty as a subscriber; or does not rightfully hold the private key used to affix the digital signature.
Validity of Document Signed with Digital Signature
- Valid and legally binding as per s62(2) DSA.
B) Electronic Signature
- S5 ECA: “electronic signature” means any letter, character, number, sound or any other symbol or any combination thereof created in an electronic form adopted by a person as a signature.
- For an electronic signature to be recognized, s9(1) ECA states that it must:
- be attached to or is logically associated with the electronic message;
- adequately identifies the person and adequately indicates the person’s approval of the information to which the signature relates; and
- be as reliable as is appropriate given the purpose for which, and the circumstances in which, the signature is required.
- S9(2) ECA explains that a signature is “as reliable as is appropriate” if:
- the means of creating the electronic signature is linked to and under the control of that person only;
- any alteration made to the electronic signature after the time of signing is detectable; and
- any alteration made to that document after the time of signing is detectable.
- It should be noted that as per the case of Yam Kong Seng & Anor v Yee Weng Kai, an SMS can be considered a signature since it fulfills s9(1) ECA. This case essentially confirms that electronic signatures for purposes of the ECA can be in the form of any mark, created using any electronic technology.
Validity and Enforceability of Contracts Signed Electronically
- Contracts cannot be denied enforceability on the ground that they are concluded electronically as per s6 ECA.
- S7 ECA recognises the legal effect, validity and enforceability of information contained in electronic messages. As such, the communication of proposals and formation of legally binding contracts expressed and signed via any electronic format shall have legal effect and will be binding on the parties involved as long as the conditions laid down in Section 9 of ECA has been fulfilled.
Conclusion
Contracts signed with eSignature providers like Docusign are valid and enforceable as long as the signature meets the requirements as laid out in the DSA or ECA.
