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.
E-signatures are legally binding
Canada’s
Personal Information Protection and
Electronic Documents Act (“PIPEDA”)
defines an E-signature as “one or more letters, characters, numbers or other
symbols in digital form incorporated in, attached to or associated with an
electronic document”. Based on this definition, electronic signatures do not
have to look like handwritten signatures, but they can. As an example, a
digitized or PDF representation of the handwritten signature would be
classified as an e-signature, and typing one’s name on the signature line would
suffice as well.
In
August 2017, the federal government adopted new regulations establishing
specific requirements for secure electronic signatures when dealing with
federal public bodies. These include
mandatory encryption of the message to which the electronic document is attached,
and the production of a valid digital signature certificate, on the basis of a
pre-screening done by the Treasury Board of Canada, regarding the entity’s
capacity to issue such certificates.
In
the same spirit, Canadian provincial jurisdictions have enacted E-commerce laws,
such as the Ontario E-commerce Act (“the Act”), which recognize that the
legal requirement for a document to be signed can be satisfied by an electronic
signature when the following requirements with respect to authenticity and
integrity are met:
- The electronic signature or authentication method is “unique to the person” and consequently can identify both the signatory and his/her intention with respect to the signed document;
- The association of the e-signature with the relevant electronic document is reliable; and
- An unaltered, complete electronic document signed by all parties must be sent and be accessible (including in printed format) to all parties for subsequent reference.
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.