For a document to be legally binding, it needs to be validly signed. Certain laws have been amended during the COVID-19 pandemic to provide for electronic signing of documents, including via audio-visual means, however the rules are not consistent and some of these changes have expired.
The reality is that we are vulnerable to snap lockdowns, which means we can’t always sign documents in person. There are ways for companies and individuals to still legally sign documents electronically, however this doesn’t apply to all documents. Of course it doesn’t! Here’s a crash course summary for you.
s 127 of the Corporations Act sets out the requirements for a company to validly execute a document.
If a document is signed in accordance with s 127, this means that the other party to a contract can rely on a set of assumptions in s 129, specifically that:
- The company’s constitution and any relevant provisions of the Corporations Act have been complied with;
- Anyone who appears to be a director or a company secretary of a company on ASIC documentation or information provided by the company, is in fact a director or company secretary;
- Any person held out by the company to be an officer of that company has been appointed as an officer and has the authority to exercise the powers performed by that kind of officer; and
- That the officers and agents of a company properly perform their duties to the company.
During the height of the COVID -19 pandemic the Federal and Victorian governments introduced temporary measures to permit electronic execution of documents by companies. These measures expanded the categories of documents that could be signed electronically, allowing signatures to appear on separate copies of the same document and provided for the valid use of witnessing via ‘audio visual link’.
Although these measures led to greater flexibility in uncertain times, they have now expired. Currently, there is no certainty about whether electronic execution will bind a company moving forward, notwithstanding that snap lockdowns are still relevant, as Melbournians as well aware.
Companies can enter into some agreements electronically, however there are other documents that require a ‘wet ink’ signature. There are also rules about whether company directors can sign different counterparts of the same agreement or not.
By contrast to the uncertainty surrounding companies executing documents remotely, as of 26 April 2021 the Justice Legislation Amendment (System Enhancement and Other Matters) Act 2021 (Amendment Act) provides Victorians with the permanent ability to execute certain documents, including wills, remotely.
Whilst a will must still be signed by the person making the will in the presence of two witnesses, the new measures provide that:
- the parties can be in each other’s presence, either physically or by audio visual link;
- one of the witnesses must be a ’special witness’, such an Australian Legal Practitioner;
- the witnesses must clearly see the person making the will sign andthat person must be able to see each witness’ signature being made. If a party is ‘wet signing’ the document, then each signing should be in full view of the camera when signing; and
- all aspects of the remote execution process must be carried out on the same day and where the person making the will and the witnesses are all physically in Victoria.
The manner and order in which people sign documents is also important. It’s no simple feat to comply with all the rules – even though they are intended to make signing requirements more flexible.
The rules can be confusing and are in a state of flux. Make sure you err on the side of caution and always seek legal advice first to ensure your documents are validly signed and are binding.
Reach out if you need any help – we’ve got you.