In our
fast-moving digital world, electronic signatures (“e-signatures”) have become a convenient, expeditious
and cost-efficient tool that can provide a tremendous competitive advantage for
smart entrepreneurs!
The e-signature approach serves to accelerate the signing of key business documents
such as sales contracts, commercial transactions and funding agreements, to
name a few. It can also be used for real
estate transactions such as agreements of purchase and sale that create or
transfer an interest in land - provided that the technology used has been
proven as secure and effective.
Users’ consent and authorization are still required
Explicit
consent and authorization will facilitate the gathering of evidence, confirm
the intention of both parties to create a legal obligation and provide some
protection against potential fraud and misrepresentation.
The
Act does not require that a person automatically accepts the use of e-signatures; prior consent to use any method of e-signature or electronic authentication
should be obtained from the parties. While
consent may be inferred from the conduct of the parties, the lack of an
explicit authorization could become an added defense in legal disputes.
It
is worthy to note that even before the advent of e-signatures, Canadian courts
have been receptive to technological advances in regard to different means of
communication and the conduct of business. The Courts will likely focus more on
the intent behind the mark, symbol, or e-signature and determine if the electronic
records are admissible pursuant to authentication of electronic documents provisions
contained in the provincial and federal evidence acts.
It
has been recognized that certain digital transaction management and e-signature
technologies can ensure compliance with electronic commerce legislation. In
fact, e-signature software providers can provide key evidence and be called
upon as expert witnesses in courts of Common
Law jurisdictions to testify to the production of certificates that prove the
precise moment documents were created, signed, and delivered electronically, as
well provide a detailed audit trail.
At
MDK Business Law, we have proactively acquired state-of-the-art commercial e-signature
software that allows our clients to take full advantage of this convenient and cost-efficient
administrative tool while meeting security, easy access and retention
requirements. Please contact us if you wish to discuss if electronic exchange
and e-signatures would make sense for your specific business transaction.