Electronic Execution of Legal Documents
The restrictions imposed by COVID-19, including self-isolation and working remotely, has made it difficult for clients and legal practitioners to physically execute documents. The restrictions have increased the need for the use of alternative methods of execution such as electronic or via audio-visual link. However, it should be noted that not all documents can be executed electronically.
Documents that can be executed electronically are agreements between individuals and agreements or Deed with a company. Regarding a company, the assumption contained in section 129 Corporations Act 2001 (Cth): ‘a person can assume that a document has been duly executed if the document appears to be signed in accordance with section 127(1)’ cannot be relied upon for valid execution if the document is electronically executed by the directors of the company. An informative article on how to minimise risks if a document is electronically executed by directors can be found in the article here: https://bit.ly/2KtGVE5
Documents that are unable to be executed electronically:
Deed – A deed executed by an individual requires the execution of the document to be witnessed for it to be an enforceable agreement.
Power of Attorney – This should be avoided unless you have been legally advised to execute the document electronically. The power of attorney granted by a company/and or individual is usually incorporated into a Deed and would be subject to the guideline provided above.
Original Document - Any document that requires the original to be executed by all necessary parties, for instance, an Affidavit.
Documents that are unable to be executed electronically and require written signatures, may be executed, witnessed and attested by audio visual link.
Recent Amendments effecting Witnessing and Attestation of Documents
The Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) commenced on 23 April 2020 (ETA Regulation). The ETA Regulation specifies the documents that may be witnessed and attested via audio visual link. They include:
A deed of agreement; and
An affidavit including annexures or exhibit.
Section 2(2)(a) of the ETA Regulation requires the person witnessing the signing of the document by audio-visual link to observe the person signing the document in real time. The witness is permitted to execute the counterpart as soon as practicable after witnessing the signing of the document or once they have received a copy of the signed document electronically.
The ETA Regulations can be viewed at https://www.legislation.nsw.gov.au/regulations/2020-169.pdf
If you are considering executing or receiving documents that are electronically executed, it is essential to discuss with legal practitioners as to the validity of the execution.
Contact our office today on 02 9922 4111 or email@example.com to discuss.