Electronic execution post-COVID

Background

During COVID-19, many Australian states and territories introduced temporary legislation to enable electronic execution of documents.

Queensland, New South Wales and Victoria have permanently amended legislation to allow for electronic execution and witnessing of certain documents in an effort to modernise outdated legislation. However, the changes vary between states, creating a non-uniform landscape for electronic execution requirements across Australia.

Electronic execution and the difference across other states and territories

Although electronic execution of agreements by individuals is permitted across all states and territories, the same cannot be said for deeds or other specific legal documents.

Queensland and Victoria lead the way in adopting electronic execution practices, including allowing documents signed by individuals to be executed without a witness, while most other states and territories lag behind. For instance:

Queensland, New South Wales and Victoria:

• These states allow electronic execution of deeds, with Queensland and Victoria removing the need for witnesses. New South Wales still requires a witness but permits witnessing via audio-visual link.
• Most other documents, contracts and agreements may be signed electronically in each of these states except for New South Wales, where affidavits, statutory declarations and oaths are still required to be signed in wet ink.

Other states and territories:

• Tasmania, South Australia, Western Australia, the Northern Territory and the Australian Capital Territory require wet ink signatures and witnessing for deeds, wills, powers of attorney and statutory declarations.
• These states and territories allow the execution of contracts, agreements and some other documents electronically but still require a witness for individuals signing.
• Western Australia, the Australian Capital Territory and Tasmania permit witnessing via audio-visual link, whereas South Australia and the Northern Territory still require in-person witnessing.

You can access our Execution Fact Sheet which sets out the current electronic execution requirements for a range of documents in Queensland, New South Wales and Victoria.

Requirements for electronic execution

Each state and territory has requirements that electronic signing must conform to. Broadly, these include:

1. Consent of the parties – all parties to a transaction must consent to the use of electronic communication. Consent can be implied or expressed, depending on the context and nature of the transaction.
2. Reliability of method – the method used to electronically execute a document must be reliable and appropriate for the purpose for which the document is generated or communicated.
3. Identity and intention – it must be possible to identify the person signing the document and to confirm their intention to sign the document electronically.
4. Retention – the electronic version of the document must be retained in a manner that is reliable and accessible for future reference.

In Queensland, these requirements are known as the ‘Accepted Method’.

These requirements ensure that electronic documents and signatures are legally enforceable. Parties should also ensure that the law governing the document permits electronic execution prior to signing.

Electronic execution by companies

Amendments to the Corporations Act 2001 (Cth) also permit companies to execute documents electronically, including deeds in accordance with sections 126 and 127. The methods used by a company to effect such electronic execution are not limited, provided the person signing can be identified, their intention indicated, the method reliable for the purpose, and that the governing document of the company does not prohibit electronic execution.

Legal ramifications of electronic execution

While electronic execution offers benefits such as convenience, efficiency and accessibility, it also introduces practical complexities in certain instances, including:

• Cross jurisdictional issues – when a document is governed by the laws of one state but involves parties residing in other jurisdictions, complexities may arise. For instance, if a deed is governed by Queensland law but some parties reside in other states, they may execute the document electronically, provided Queensland’s requirements are met. However, complications can occur if the deed’s validity is later contested in a jurisdiction that does not recognise electronic execution.
• Unauthorised execution – an unauthorised person may execute the document or sign on behalf of the required signatory without proper authority. This may occur where someone has access to the signatory’s email or pastes their signature into a document. 
• Compliance with governing laws – different states and territories have varying requirements for electronic execution, particularly for documents like deeds, affidavits or statutory declarations. Ensuring compliance with the governing law adds complexity, especially in multi-state transactions.
• Identity verification – unlike wet ink signatures witnessed in person, electronic execution relies heavily on technology to confirm the identity of the signatory. Without robust verification methods, such as phone authentication, there is a risk of forgery or fraud.

To mitigate these risks, parties should:

1. Ensure compliance with the laws of the governing state. For important documents or high-value transactions involving parties in different states, consider using wet ink signatures for added security.
2. Verify signatory identities through reliable methods, such as phone authentication offered by platforms like DocuSign.

Improper execution of documents can render them unenforceable. It is essential for parties to take necessary precautions when executing documents electronically.

conclusion

Although electronic execution laws have advanced, variations across states present significant challenges. Parties must navigate these differences carefully, especially for deeds, to ensure both compliance and enforceability.