With many transactions now able to be completed fully electronically, the need for a clarity as to the validity of electronic signatures has arisen.
Is an electronic signature legally binding? Is it as effective as a written signature? When can you use an electronic signature and when can you not use one?
When is an electronic signature valid under New Zealand law?
An electronic signature is recognised as a legal signature in most circumstances. As set out in the Electronic Transactions Act 2002, an electronic signature can be as valid as a written signature where the signature:
- Adequately identifies the signatory and adequately indicates the signatory’s approval of the information to which the signature relates; and
- Is as reliable as is appropriate given the purpose for which, and the circumstances in which, the signature is required.
The Act imposes a presumption of reliability so that unless argued otherwise, an electronic signature will be presumed reliable where it meets the criteria set out above. However, there are certain situations where an electronic signature is not deemed valid under New Zealand law.
When is an electronic signature not valid under New Zealand law?
Where the electronic signature is in relation to information which is legally required to be given, the receiver must consent to receiving the electronic signature. If they do not consent, it won’t be legally binding.
There are also certain documents where an electronic signature in any form cannot be used – for example, there are strict requirements in relation to signing of Wills.
In conclusion, electronic signatures are generally as valid as a written signature, provided they meet the requirements set out above. There are certain circumstances where they are not, however, and it is good to be aware of that.
This is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Please feel free to contact us if you have any questions arising out of the above.