As the impact of the Novel Corona Virus (Covid-19) continues to rare its head in T&T, the Government has implemented ‘Shelter in Place’ or ‘Stay at Home’ restrictions. By the Public Health [2019 Novel Corona Virus] Regulations 2020, persons cannot without reasonable justification be at any workplace unless the workplace is an ‘essential service’ as prescribed by the Regulations. As a result of these Regulations, persons have been forced to quickly adapt to changes to their usual mode of operation. Many organisations have closed their offices and, in some cases, both non-essential and essential staff are working from home to reduce the spread of Covid-19. At a personal level, individuals have been confronted with new ways to electronically carrying out everyday business transactions. For many, this somewhat abrupt change in the way we do business has heightened the importance of relying on electronic signatures. This is in sharp contrast to the signing of document by the traditional physical attendance at a place of business to affix a signature by hand, commonly referred to as a ‘wet ink’ signature.
This article briefly discusses the applicable law and offers some practical guidance for the use of electronic signatures, which may prove to be critical during these unprecedented times.
The Law in T&T
The Electronic Transactions Act, Chap 22:05 (the “ETA”) addresses the use of electronic signatures in T&T. The ETA was partially proclaimed in 2012 and is intended to give legal effect in T&T to electronic documents, electronic records, electronic signatures and electronic transactions. Due to its partial proclamation, only some of the provisions of the ETA are in force as law. The provisions of the ETA that are in force effectively allow for the use of electronic documents and electronic signatures for certain electronic transactions, as well as for the storage of information in electronic form.
The ETA provides that information in electronic form will not be denied legal effect, admissibility or enforceability solely because it is made in electronic form. In addition, any legal requirement that information, record, document or correspondence be in writing is satisfied where it is presented in electronic form, provided it is accessible and capable of retention for subsequent reference.
Inapplicability of Electronic Signatures
The ETA has various carve outs that should be carefully noted. The ETA does not allow for use of electronic signatures for the following transactions:
- the making, execution or revocation of a will or testamentary instrument;
- the conveyance of real or personal property or the transfer of any interest in real or personal property;
- the creation, performance or enforcement of an indenture, declaration of trust or power of attorney;
- the production of documents relating to immigration, citizenship or passport matters; or
- the recognition or endorsement of negotiable instruments.
Formation of a Contract
Generally, a contract can be made orally, in writing or by deed. Contracts made orally or in writing are often referred to as ‘simple contracts’. Typically, a simple contract in writing is executed by way of signing by each party and dating the contract. However, the ETA provides that any negotiation or other matter that is material to the operation or formation of a contract between parties can be validly done by electronic means. Where parties to a simple contract agree to enter into the contract by electronic means, the contract will have legal effect provided the matters that is material to the operation or formation of the contract are sufficiently expressed in electronic form.
As it relates to the execution of a simple contract in writing, the ETA allows for use of electronic signatures by parties to a contract. The ETA provides that electronic signatures are acceptable if it meets the minimum standards of reliability and integrity as set out in the ETA or the standard agreed between the parties in the contract. Accordingly, parties to a written contract may agree to use a form of electronic signatures to execute a contract or alternatively, the form of electronic signature used should meet the minimum standard of reliability and integrity as set out in the ETA.
An electronic signature can take a variety of forms, including but not limited to:
- a person typing their name into a contract or email with contractual terms;
- a person pasting a pdf scanned copy of their signature into the execution block of an electronic copy of the contract;
- a person touching or clicking an “I accept” box or an appropriately designated icon on the computer;
- a person using an electronic signature platform to click to insert a typed or handwriting font into the execution block; or
- a person using an e-pen or finger to digitally draw their signature.
The criteria set out in the ETA to determine the reliability and integrity of an electronic signature include whether—
- the authentication technology uniquely links the user to the signature;
- the signature is capable of identifying the user;
- the signature is created using a means that can be maintained under the sole control of the user;
- the signature will be linked to the information to which it relates in such a manner that any subsequent change in the information is detectable; and
- such other criteria as may be prescribed by Regulations.
The use of electronic signatures may prove to be quite useful in these uncertain times. Electronic signatures may even find its way into everyday use long after Covid-19 leaves our shores. When using electronic signatures, the following practical matters should be considered to safeguard against challenges to the effectiveness of the use of electronic signatures.
- Ensure that the electronically executed contract can be accessed and retained by each party to the contract for future reference;
- Ensure that the contract to be entered into does not preclude execution by way of electronic signatures;
- In the case of corporate entities, ensure that the constitutional documents of the entity do not preclude execution by way of electronic signatures;
- Ensure that the contract to be entered into includes language to the effect that the parties to the contract agree that:
- the contract may be executed electronically using a specified method of electronic execution;
- the specified method of electronic execution meets the standard agreed by the parties to the contract;
- the electronically executed contract will be binding on the parties to the contract and will take the place of a printed contract executed under hand;
- By electronically signing the contract, each party agrees that he/she/it has read and understands the entire contract and agrees to be bound by the contract and that, particularly in the case of a customer, the customer has had an opportunity to have any questions in relation to the contract addressed before signing same;
- Ensure that the email address to which the electronic contract is forwarded is an email address provided and confirmed by the intended recipient by some means other than said email address. For example, on the call with the intended recipient, verified using security questions.
The convenience of using electronic signature may change the way we do business post Covid-19. That said, the use of electronic signatures must be balanced against the inherent risks of potential fraud associated with the use of technology. Parties should therefore ensure that the appropriate guidance is obtained, and the relevant procedures and systems are sufficiently tested before adopting the use of electronic signatures.