.svg){kind=logo}
© 2024, Juro. All rights reserved.
Solutions
Customer Support
Resources
© 2024, Juro. All Rights Reserved
Businesses in Australia are always looking to drive greater efficiencies, and eSignatures offer the perfect opportunity to do just that.
But what does the law say about eSigning in Australian states, and should you embrace the technologies changing the way we agree contracts?
Electronic signatures are recognized as legally valid in Australia under the Electronic Transactions Act 1999 (ETA) and corresponding state and territory laws.
Under the ETA, electronic signatures hold equal weight to handwritten signatures for most transactions, provided certain conditions are met. Let’s explore these conditions, and exemptions, now.
The Electronic Transactions Act 1999 (ETA) is a law in Australia that establishes the legal validity of electronic signatures and transactions broadly.
The ETA allows electronic tools to be used for many paper-related processes, such as signing, sending, or recording documents, as long as certain steps are taken to ensure validity and authenticity
Simplified, the ETA is built on three central principles:
The ETA allows electronic signatures to be legally valid for transactions under Commonwealth law. Section 10 states that electronic signatures can be used as a substitute for handwritten signatures, but three specific conditions must be met for them to be recognized:
The method used must identify the person signing and indicate their intention regarding the information contained in the document. This means the electronic signature must be capable of uniquely identifying the person (e.g., by their name, digital ID, or secure access) and demonstrate their intent to be bound by the document.
The method used to sign electronically must be reliable as appropriate for the purposes of the communication. Reliability depends on the nature of the transaction and the level of security required.
For example, a simple checkbox might be sufficient for agreeing to a service agreement or salary increase letter, while a digital signature with encryption might be needed for a more sensitive transaction. It depends!
Finally, the recipient of the signed document must agree to the use of an electronic signature in the first place. This means the parties involved in the transaction must consent, either expressly or implicitly, to the use of eSignatures instead of physical ones.
With everything we just discussed in mind, how can you create an electronic signature that’s secure, identifiable, and clearly demonstrates an intention to sign? Well, there are a few ways.
You can use an electronic signature tool like Docusign or Adobe Sign. You can even scan a signature, or sign a Google Doc. These all get the job done, sure. But they rarely drive efficiencies before and after a contract gets signed.
That’s why lots of modern businesses in Australia are choosing to sign within Juro’s all-in-one contract management system instead.
Australian health tech company, Eucalyptus, are a perfect example. Since adopting Juro, they’re saving an estimated 96 days each year that would otherwise be spent on contract admin.
“We’ve sent hundreds of contracts to investors and shareholders, almost all through Juro. Counterparties really appreciate the fact that you can view and sign a contract easily and securely from your phone” - Ryan Zahrai, Head of Legal, Eucalyptus
Not only have Eucalyptus made signing more efficient for internal teams and counterparties, but they’ve also streamlined the rest of the contract process, too. Their legal team has automated tasks on routine contracts to free up time for high-value work.
Want to replicate their results and win your time back? Hit the button below to find out how Juro could work for your business.
Book a demo to find out how Juro is helping 6000+ companies to agree and manage contracts up to 10x faster than traditional tools.
While the ETA allows for broad use of electronic signatures, there are certain types of documents and transactions that are explicitly excluded from the scope of the Act. Put simply, this means you should default to wet ink signing for these documents to ensure their validity and admissibility.
Under Section 7 of the ETA, the following document types are excluded:
These exceptions are based on the formal and significant nature of the documents, where additional legal safeguards are required. You’ll find a similar set of exemptions in most jurisdictions’ eSignature laws.
Each state and territory in Australia has its own electronic transactions legislation, which generally aligns with the Commonwealth ETA.
However, some states may have specific rules or exceptions depending on local laws. This means that businesses operating across multiple jurisdictions need to be aware of both federal and state-specific rules regarding electronic transactions.
Perhaps the biggest differentiation between states is the fact that some jurisdictions, such as New South Wales and Victoria, have embraced electronic conveyancing systems (like PEXA).
This means they’re more open to allowing electronic signatures for property transactions, while other states may still require paper-based processes for certain aspects of land transactions. More states are likely to get up to speed over the coming years, though.
You can find the full state-specific eSignature laws below:
Australian case law has broadly supported the use of electronic signatures, but several key rulings highlight how courts interpret the requirements for eSignatures under the Electronic Transactions Act (ETA).
The decisions generally focus on the key principles of identification, reliability, and consent, but uphold eSignatures as valid and legally binding still.
In this case, the court examined whether electronic signatures used by company officers to sign documents were valid under the ETA. The court upheld the validity of the electronic signatures but emphasized the need for sufficient evidence to authenticate the identity of the individuals signing.
This case reinforces that eSignatures are valid but must clearly demonstrate the intention to be bound by the agreement, and that the person applying the eSignature is properly authorized and identified.
In this case, the court considered whether an unauthorized use of an electronic signature was binding on the company director. The court ruled that an electronic signature applied without the signatory’s knowledge or authorization was not enforceable.
While court in this case did invalidate this particular eSignature, it did so because the intention to sign the contract wasn’t apparent. If it were, the outcome would have likely been different.
This case saw the validity of an electronic signature for an electoral enrolment application challenged. However, upon reviewing the facts of the case, the court ruled that an electronic signature met the requirements of the ETA and subsequently satisfied the legal criteria for an electoral enrolment application.
This case established a precedent for the use of electronic signatures in government processes, further expanding the legal acceptance of eSignatures under Australian law.
Although the fundamental legal framework governing electronic signatures has remained stable, several noteworthy developments have emerged in recent years. These include:
Most recently, Australia’s federal government announced that statutory declarations will no longer be exempt from the rules on eSigning. Federal Attorney General, Mark Dreyfus said that individuals would be able to digitally sign a statutory declaration using the government’s digital identity system.
“This bill will respond to how Australians want and expect to engage and communicate digitally with government” - Mark Dreyfus, Federal Attorney General
It’s estimated that Australians spend around nine million hours each year executing more than 3.8 million statutory declarations. Electronic signing can reduce these losses and save an estimated $165m per year.
Each of these measures have positively impacted the adoption of electronic signatures in Australia by making it easier, and more convenient for individuals and businesses to sign agreements digitally.
Juro is not a law firm and this article should not be relied on as legal advice.
Modern businesses use Juro to automate contracts from drafting to signature and beyond, in an AI-enabled platform that every team can use. Want to see how?
Book a demo