The pandemic has changed how the world does business. People can buy, sell, and contract without ever meeting face to face. This new digital age emerged from necessity and has grown because of technology like Zoom, TitanFile, and DocuSign. But with this new convenience also comes a new set of considerations.
Take DocuSign for example. This document-signing software allows you to sign legally enforceable documents online without ever needing paper, pens, or printing.1 But what does it mean to witness a document? Can you be sure the document was signed correctly – and by the right person – despite not having seen the signing occur?
Internal to DocuSign, there are several methods of verifying the identity of the signer which include:
- using email addresses;
- a phone call;
- using knowledge-based questions;
- uploading photo ID or using electronic or bank-based IDs.2
Additionally, DocuSign has an “eWitness” feature which creates a transaction record in the event of legal disputes.3 But what does the law say?
The Electronic Commerce Act
One of the main pieces of legislation in Ontario that governs electronic documents is the Electronic Commerce Act (the “ESA”). The ESA states that where a legal document must be signed, a digital signature can be used.4 The ESA also includes provisions which address the reliability of an electronic signature for certain types of documents. This means that the electronic signature must be “reliable for the purpose of identifying the person; and the association of the electronic signature with the relevant electronic document is reliable.”5
It is important to be aware that although digital ink can be used in place of wet ink, electronic signatures are not automatically permitted. Section 3 of the ESA outlines that a person does not have to provide or accept a signature in electronic form without the person’s consent.6 However, an electronic signature may be permitted where there is implied consent and it “may be inferred from a person’s conduct if there are reasonable grounds to believe that the consent is genuine and is relevant to the information or document.”7 Essentially, this means that a person’s actions can demonstrate they consent to electronic signing even where they do not explicitly say so.
Whether electronic signatures are permitted also varies depending on the type of document, the parties to the contract, and where the contract is signed.
- The type of document: the ESA does not cover all situations where legal documents are being signed. For example, the ESA does not apply to Wills, Powers of Attorney, and negotiable instruments such as promissory notes.8
- Parties to the contract: where a public body, such as a municipality or board, is signing the document, there must be explicit confirmation that it is permissible to use electronic signatures as no consent can be implied.9
- Where the contract is signed: “an electronic document is deemed to be sent from the sender’s place of business and received at the addressee’s place of business”;10 this may be an issue where the parties to the legal document reside in different provinces, or even different countries.
Electronic signing and witnessing of documents is becoming more commonplace. However, signing and witnessing legal documents may not be as simple as a few clicks. When seeking to rely on electronic signing and witnessing of documents,
- use official and licenced software that has the functionality to support your needs;
- make sure the document is capable of being witnessed and signed electronically and all parties understand and consent to the process; and
- consult with a lawyer to ensure the document is valid and enforceable and there are no unintended consequences.
Should you have any questions about electronic signing and witnessing of documents, or more specific contract-related issues, please reach out to Michael Weinberger or a member of the Siskinds’ Business Law Group.
Special thanks to Sarah Lawson, Articling Student, who helped research this article.
1 What does document signing software do? (docusign.com).
2 Are Electronic Signatures Safe? | E-Signature Security (docusign.com).
3 FAQ About E-Signatures in Canada (docusign.ca).
4 Electronic Commerce Act, 2000, S.O. 200, c. 17, s. 11(1).
5 Ibid at ss. 11(3)(4).
6 Ibid at ss. 3(1).
7 Ibid at ss. 3(2).
8 Ibid at ss. 31(1).
9 Ibid at s. 14.
10 Ibid at ss. 22(4).