Electronic signatures not yet a substitute for the ‘wet’ signature in corporate transactions

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By Cole Stacey

Signing a document is a simple method of confirming the agreement of contracting parties. It provides comfort and certainty as to the personal involvement of that person and means that signatures can be checked, for example, against bank mandates.

Finding an electronic equivalent is necessary to the continued growth and development of e-commerce. However, it is difficult to find a nationally accepted fraud-proof process. Therefore, we are some way off the widespread adoption of electronic signatures as the basis for closing corporate transactions.

The position is clear: electronic signatures can, in principle, satisfy the requirements for signing a document under hand (as demonstrated in Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2012] 1 W.L.R. 3674) and systems have been developed — especially in relation to consumer contracts — that are being used effectively. However, the widespread adoption of electronic signatures in corporate transactions depends on whether the process used to ‘sign’ gives sufficient certainty that the individual or company has agreed to be bound by the contract in question…

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