Electronic contracts are becoming more frequent in both business and personal use.
There are a number of ways an electronic contract can be executed:
• Clicking a checkbox to acknowledge agreement.
• Typing yes or I agree in a form online.
• Signing a document with a stylus or your finger.
• Using a facility such as DocuSign to electronically sign a document.
These contracts are considered legally binding, provided they meet the usual requirements under a contract relating to:
• Acceptance, and
The Electronic Transactions Act 2000 (NSW) stipulates that an agreement can be in writing if it is given by electronic communication. In other words, it does not have to be on paper.
There are provisions within the act to stipulate that if a person consents to a method of electronic signature and intends that signature to be their consent to the contract then it will be as binding as a written signature on paper.
A number of organisations have adopted electronic contracts. Banks have adopted electronic contracts for loan agreements.
Contracts for the sale of land can be electronic too.
Electronic contracts for conveyancing can increase the speed and efficiency of a transaction.
In some instances, one of the parties may be unable to attend the solicitor’s office to sign the contract. The vendor or purchaser can access the electronic contract through a secure client portal. This document can then be signed electronically and available to the solicitor immediately.
In recent months there have been instances of fraud involving email interception.
Due to the lack of security with email, it is not recommended that sensitive documents are emailed. Even PDF documents attached to an email can be easily intercepted.
Sharing documents via a secure client portal, or using a service such as DocuSign is recommended. These portals enable electronic signing of the documents on a secure platform.
Are you buying or selling?
Many of our clients plan overseas trips or work remotely, making electronic contracts a necessity. Contact our team to discuss your requirements today.
If you’re wanting to update to electronic contracts for your business, contact our team for advice.