With the declaration of the Covid-19 pandemic, and our federal, provincial and municipal action plans and responses to slow the pandemic in Canada, many people, professionals and business owners are continuing work from the safety and isolation of their homes. Many face the challenge of figuring out how to sign documents without putting pen to paper.  Fortunately, a multitude of cloud based platforms have allowed electronic signatures to become a real-time solution to our current social distancing requirements. While we may never be able to go completely paperless, there is no better time than the present to understand electronic signatures.

What is an electronic signature?  Generally, the term ‘electronic signature’ is a broad term for information in electronic form used by a person to sign a document or record. Electronic signatures can take a variety of forms and methods, including more traditional methods such as scanning and faxing documents to more secure solutions such as ‘digital signatures’.  Defined, digital signatures are a set of algorithms and encryption protections used to determine the authenticity of an electronic signature within a digital document.

According to the federal law which governs electronic signatures in Canada, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) states that an electronic signature is “a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document.” For a signature to be considered a valid electronic signature, PIPEDA requires:

  • the electronic signature must be unique to the person signing (as an example, the letter X is not a unique signature);
  • the signature must be created and be under the full control of the person making the signature;
  • specific technology or processes must have the capability to be used to identify the person; and
  • there must be an audit trail, meaning the electronic signature must be linked with an electronic document in a way that allows the examiner to determine whether the e-document has been changed since the signature was attached to it.

Equally important are the traditional notions of consent, authenticity of signature and delivery; like with manually signed documents, these too must be present for a contract to be valid.

  • Consent: Parties can only be bound to terms which they have consented to; however, if a person is not signing on his or her own behalf, the effect of that signature depends on the authority of the person signing to bind another party. When one of the parties is an entity such a corporation or partnership, that authority may be express, (i.e. conferred by, for example, a resolution of the board of directors) or implied (i.e. a corporation holding out a person as having authority). Between two or more persons, in the absence of other terms in the agreement to indicate consent, the signature itself, is usually satisfactory.
  • Authenticity – Traditionally, “wet” (ink) signatures were presumed under the best evidence rule to be the primary evidence of a party’s assent to an agreement, superior to any copy made of such document or other forms of evidence such as prior conversations, certain acts or other forms of evidence (letters, emails). British Columbia, through its Evidence Act, has extended the best evidence presumption to electronic documents.[1]
  • Delivery – Another traditional element, delivery, may be in danger of falling by the wayside with electronic signatures, which means the parties to a transaction must be vigilant in making sure there has been proper delivery. In the same way an agreement, signed by a party, left in a locked room and stolen from that locked room, does not constitute valid delivery, electronic documents e-signed in advance by one party in preparation for a possible deal and mistakenly e-mailed to the other party does not constitute not valid delivery.

When can electronic signatures be used? E-signatures can be used for many commercial agreements. Under B.C.’s Electronic Transactions Act, if there is a requirement under law for a signature, that requirement can be satisfied by an electronic signature. Further, a record to which the Electronic Transactions Act applies must not be denied legal effect or enforceability solely by reason that it is in electronic form.

That said, in the interests of avoiding litigation, it is always good practice to add a counterpart clause to every electronic contract. A counterpart clause states that parties need not sign the same copy of an agreement and any of the copies can be treated as an original for evidentiary purposes. This clause being included in an electronic contract prevents a party to the agreement from trying to assert that the contract is invalid because there is no single original copy of the document with all of the parties’ signatures.

Both federal and provincial laws also provide exceptions to the use of electronic signatures, such as: agreements that relate to the transfer, assignment, license or other grant of specific intellectual property; wills and powers of attorney in respect of an individual’s financial affairs or personal care; certain prospectus offerings (Form 6) which are filed with SEDAR; and certain land transfer documents. For people not using documents which fall into these very specific categories, electronic signatures are a viable alternative to the traditional manual signatures.

Aside from the issues at law, there are other practical considerations that should be examined before deciding to switch to an electronic signature, especially if the decision maker is a business owner planning to implement the change to the decision maker’s entire business model. These considerations include items such as the cost of setting up the infrastructure around an electronic signature process, the number and frequency of transactions, the level of security required and protocols to be prepared, expectations of your business and the additional legislative or regulatory requirements that may be added as a result of the business using electronic signatures (as well as complying with any contractual restrictions or requirements of customers, clients and other material contracts of the business), the workload associated with implementing the proposed electronic signature process[2]. Fortunately, technology such as encryption and password protection are available to increase the security and decrease the costs of implementing the use of electronic signatures.

Whether we like it or not, Covid-19 has forced us into an increasingly paperless future of remote access and a shift from traditional brick and mortar offices, and more traditional exchanges of executed documents. It is crucial now more than ever for all of us who transact business to become familiar with electronic signatures, when they are valid and how to use them.


[1] Section 41.3, Evidence Act, “If an electronic court document is accompanied by a secure electronic signature, the electronic court document is presumed, in the absence of evidence to the contrary, to have been signed by the person who is identified in, or can be identified through, the secure electronic signature.”

[2] Electronic Signatures, Guidance for Policy Makers and Design Teams, Office of the Chief Information Officer, https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/services-policies-for-government/information-technology/electronic_signatures_guide.pdf

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