The practice of signing documentation is a simple, yet vital, element of the legal profession, serving as a form of identification, as well as evidence of a party’s agreement to a document’s terms.
Being such an integral part of law and business, it comes as no surprise that following the Government’s ‘Level 4’ announcement on 23 March 2020, some of the first legislative modification orders (i.e. temporary changes to the law) were in relation to the ability of people to sign documents at a distance or online through a digital platform.
It is important to note that, before Covid-19, the use of electronic signatures (or eSignatures) was already fairly common throughout New Zealand. Now, with the advent of lockdowns and a shift towards more people working from home, the convenience of eSignatures has seen their use and acceptance increase further.
In terms of legislation, the rules regarding electronic signing are covered under the Contract and Commercial Law Act 2017 (the Act) which provides that eSignatures will be valid so long as they can be considered “as reliable as is appropriate”. The Act then provides that such a standard can be achieved by meeting certain requirements, such as:
- that the means of creating the electronic signature is linked to the signatory and to no other person;
- that the means of creating the electronic signature is under the exclusive control of the signatory;
- that any alteration to the electronic signature made after the time of signing is detectable; and
- where the purpose of the legal requirement for a signature is to validate the terms of the document to which the signature relates, any alteration made to that document after the time of signing is detectable.
What documents can be signed electronically?
Some documents which can be signed with an eSignature are:
- Sale and Purchase agreements;
- Commercial agreements;
- Leasing documentation;
- Director resolutions;
- Shareholder resolutions; and
- Trustee resolutions.
Not all documents are able to be signed electronically, with the Act excluding the following (among others):
- affidavits, statutory declarations, or other documents given on oath or affirmation;
- powers of attorney or enduring powers of attorney; and
- wills, codicils, or other testamentary instruments.
Just because a document is unable to be signed electronically does not stop it from being signed in isolation, thanks to the modification orders previously mentioned. This means that although there may be separate signed copies of the same document, the documents together will constitute one original.
One such modification order is the Epidemic Preparedness (Oaths and Declarations Act 1957) Immediate Modification Order 2020 (the Order) which waives the section under the Oaths and Declarations Act that requires parties to be in the same room. The Order instead enables a declarant (the individual making the declaration) to use audio-visual technology to complete a declaration (or other such oath) in front of an official (such as a solicitor) before sending a scan or photo of the signed document to the official for witnessing and certification.
In addition, the Order also allows for declarations to be taken via audio links, such as phones, in cases where visual-audio services are unavailable. While this offers even greater flexibility within the current business climate, it is recommended that further steps be taken (such as having the declarant read out a copy of the document prior to signing) to ensure the usual requirements are satisfied.
Lastly, in cases where a printer may not be readily accessible, declarations written by hand will also be considered sufficient.
With the societal and economic impacts of Covid-19 looking to be long-term, it may yet be some time before things are able to return to the way they once were, which means that eSignatures and the use of audio-visual equipment will be part of our future ways of working.
For any questions or queries relating to the above, or for any advice in relation to the remote signing of enduring powers of attorney, wills, or any other documents, please talk to your lawyer or get in touch.
Disclaimer: The information contained here is of a general nature and should be used as a guide only. Any reference to law is to New Zealand law and legislation. We recommend before acting on it, you consult your accountant or tax adviser.