In Australia and internationally, commercial parties are starting to execute documents electronically using cloud-based platforms, both in volume retail transactions and in bespoke wholesale transactions. The market is increasingly interested, and can see significant commercial advantages. To take just a few examples: in Australia at least two major listed companies have started to execute their documents in that way, including in one case a large syndicated loan agreement; banks and financial institutions are using it for flow transactions; and property developers and real estate management companies are using it for sales contracts and leases.
This is part of a wider move in commerce away from paper and towards the electronic, for transactions great and small. This includes even that bastion of paper and formal requirements: conveyancing and land titles registers. There are a number of such platforms available. Are they effective? Can they create binding transactions when the law requires writing or signatures, or when a company is signing under s 127 of the Corporations Act 2001 (Cth)? Can they be used for deeds? Lawyers from five firms, aka the Walrus Committee, have been examining the relevant legal issues. This article developed from a paper initially prepared to assist that examination, although the Committee didn’t achieve unanimity on all its conclusions.
In Part A, author Diccon Loxton provides a summary of his conclusions; a description of the operation of a typical platform; and an examination of whether contracts signed using platforms can satisfy requirements as to writing and signing, in two stages: first, under the general law, and secondly, under electronic transactions legislation. Part A also describes the operation of a cloud-based platform for executing documents (Platform). It concludes that, though requirements for signing and writing need to be considered in their context, generally documents executed using a Platform satisfy requirements for signing and writing, not only when the electronic transactions legislation is applied, but also under general law.
Part B goes on to examine the potential status of print-outs of electronically signed documents, as a backstop; a discussion of two areas of possible difficulty: first, s 127 of the Corporations Act, and secondly, deeds; and a summary of situations in which electronic signing may not be appropriate. This covers the role of the Electronic Transactions Act (ETA), what is a “document”, what is “signing”, witnessing, attestation and sealing; as well as the requirements in relation to local and foreign deeds.
Simply complete the form on the right to download your complimentary copy of Part A originally published in the Australian Law Journal Volume 91/2, 2017.
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