Electronic Signatures and Commercial Transactions
Electronic signatures, already an important topic, became all the more important as the COVID-19 pandemic made it more difficult for parties to meet in person in order to execute documents. The past year has seen a remarkable trend towards adoption of technology in the legal profession – and there is no reason to believe that the leaps made will be undone when the pandemic is finally over. As such, it only makes sense to try to understand the state of the law as it relates to electronic signatures as the pandemic appears to near its end. Please note that this is a brief overview and is not intended to be a comprehensive review of the law or its application to each circumstances, nor does it constitute legal advice.
Electronic Signatures at the Federal Level
At the federal level, the Personal Information Protection and Electronic Documents Act (PIPEDA) provides for the use of electronic alternatives where federal laws contemplate the use of paper to record or communicate information or transactions. PIPEDA also broadly defines the terms “electronic document” and “electronic signature,” and distinguishes the concept of “secure electronic signatures” – which are to be used when a federal law requires a document to be in its original form, when there is a requirement for a signature to be witnessed, where the document involves a statement that is required to be made under oath or solemn affirmation, or where a statement must be made declaring or certifying that any information given by the person making the statement is true, accurate, or complete.
Electronic Signatures at the Provincial Level (Ontario)
Most provinces across Canada have adopted largely uniform statutes concerning the use of electronic signatures. In Ontario, the relevant statute is the Electronic Commerce Act, 2000 (ECA).
Some key points from the ECA are set out below:
No one is compelled to use, provide, or accept documents in electronic form – consent to do so is required, although consent can be inferred from the person’s conduct in certain circumstances.
A legal requirement to provide information or a document to another person is satisfied if the information or document is provided in an electronic form that is accessible by the other person and useable for subsequent reference and is capable of being retained by the recipient.
A legal requirement that a document be signed is satisfied by an electronic signature – however, additional requirements may apply with respect to certain types of documents.
The ECA does not act so as to allow the use of electronic documents and signatures where another statute or law expressly authorizes, prohibits, or regulates their use.
Furthermore, the ECA does not apply to the following documents:
Wills and codicils
Trusts created by wills or codicils
Powers of attorney, to the extent that they are in respect of an individual’s financial affairs or personal care
Negotiable instruments
Prescribed documents (i.e., any exceptions set out in regulations – as of now, there are no regulations under the ECA)
Documents of title (with the exception of contracts for carriage of goods)
Electronic signing makes it easier and more efficient for individuals and businesses to conduct their affairs in an increasingly fast-paced world. It is important to understand when, where, and how electronic signatures can be used to execute documents – but it is also crucial to note that the legal framework is not stagnant and up-to-date advice on the specifics of your transactions should be sought where appropriate.
