If you use Docusign or similar PDF online signing services, electronically signed documents may be invalid. However, much depends on how the signature was created and whether it was verified.
The case BIZCAP AU PTY LTD v SHARMA [2024] WASC 198 (14 May 2024) represents the first known instance where a purported electronic signature was contested in court. The Court ruled a replacement caveat allegedly signed by the first respondent was invalid.
The Facts
- The respondent used Docusign to sign a loan agreement with JVA (WA) Pty Ltd, trading as Skin Rejuvenate Cosmetic Clinic
- The signature used an email address (ankjshar@gmail.com) that the respondent denied ever having; she used business email info@skinrejuventate.com.au for company matters
- Bizcap lodged a replacement caveat on 2 April, allegedly signed by the first respondent
- The first respondent disputed the validity of the electronic signature
The Court's Consideration
Section 10 of the Electronic Transactions Act 2011 (WA) sets out requirements for valid electronic signatures in Western Australia. The court found significant doubt regarding whether the first respondent actually signed the agreement.
Hill J. noted: "the signatures of the first respondent and another guarantee appear to be in the same handwriting and the 'signatures' simply handwrite the relevant person's name as opposed to being a signature."
The judge stated that some verification steps should have been taken by the applicant to confirm the first respondent's consent to the electronic signature, but no evidence of such verification existed.
Online PDF Digital Signing Services
Services like Docusign offer two signature options:
- Upload an image of a handwritten signature that can be compared to government-issued identification
- Type a name in various fonts (standard typeface or handwriting-style fonts)
These services do not conduct physical identity verification themselves. A subsequent case, PROSPA ADVANCE PTY LTD v. TASOU [2024] WASC 359 (2 October 2024), reached the same conclusion regarding Docusign signatures.
What This Means
These cases raise concerns for any organization relying on electronic signatures. Without additional verification that the signature represents the party involved, courts may not accept typed-name signatures from online PDF services.
All Australian states have identical legislative wording, so this issue is not confined to Western Australia.
Where From Here?
Organizations using electronic signatures should seek legal advice to determine how these decisions affect their processes. While not all electronic signatures may be affected, acceptance procedures for typed-name signature methodologies may require modification.