What are electronic contracts?

You might not realize it, but electronic documents (“e-documents”) and electronic contracts (“e-contracts”) are already all around you. In fact, your existing business may already have elements of e-documents in its operations. Official e-documents and e-contracts are, simply put, contracts signed electronically. 

Contrary to popular belief, electronic signatures are not limited to your physical signature or handwriting on a screen. According to the Electronic Transactions Act (Cap. 88), which is the law governing electronic signatures in Singapore, a signature can take the following forms:

Clicking the “I Agree” checkbox on the Terms & Conditions on websites. The terms and conditions which pop up on sites you visit are actually contracts which you sign by clicking “I Agree”.

Your typed name at the end of an email. While it may be hard to believe, a simple email signed with your name at the bottom might constitute you forming an e-contract with your correspondent under certain circumstances. Leaving your name at the end of an email alongside your corporate position, sent from your company account can sometimes be equivalent to signing off on a contract. So, when an employee reports sick, approval of his or her leave of absence via email constitutes official documentation. 

Your typed initials. Typing out your initials to sign off on an e-document like an email may also result in the formation of a legally significant document.

Mouse scribbles on a screen. The scribbles you sign off using a mouse can also constitute a signature approving an electronic document. 

Hand-signatures created on tablet using your finger or stylus. Signing off on a delivery man’s iPad when you receive a parcel constitutes an electronic signature.

Signing with Stylus
Signing with a Finger
Clicking 'I Agree'
Why should I consider using electronic documents?

You might be wondering what incentive a small operation has for shifting over to electronically signing and executing contracts. Well, the reason businesses, regardless of size, stand to benefit from electronically executed contracts are three-folds: Speed, Savings, Security.


Speed Signing contracts using wet ink signatures involves a cumbersome process for the signer. Traditionally, a person would have to print, sign and scan a document, before he can email it back to the company. Shifting over to e-documents shortens this process to a single step – signing the contract on your smartphone or laptop.

SavingsAs a small company that executes a limited number of contracts, the cost savings might not seem immediate. However, immediate savings are had from eliminating courier and shipping costs for documents, particularly urgent ones. This is especially crucial amidst Covid-19, where everyone in the organization may be operating from remote locations. Moreover, time is saved on performing administrative tasks like filing, rekeying data and archiving confidential documents. 

Security Signing a document using a signature solution platform often has the added benefit of security. Some platforms offer additional assurance through security safeguards such as the ability to verify and capture the consent of the signatory. Unlike physical documents which can be destroyed, electronically executed documents have the are not being susceptible to loss or damage.

What documents should I begin digitizing?

The ETA states that electronic signatures have an equivalent legal effect to pen-and-ink signatures, excluding 5 categories of contracts.

Contracts, authorizations and client forms. This category refers to documents which must be signed by clients, such as:

  • Purchase and/or sale agreements for products or services;
  • Authorizations for providing a service;
  • Technical service confirmation forms; etc.

Employment contracts and HR operations. Hiring new employees and updating staff on company policy can all be carried out using electronic signatures now. Documents under this category include:

  • Employment contracts for full-timers, part-timers and interns;
  • Job descriptions;
  • Employment handbook;
  • Non-disclosure agreements;
  • Health insurance; etc.

Supplier contracts. These include supply agreements, procurement contracts, cost reimbursement contracts.

Confidentiality agreements and investment documents. Confidentiality agreements and investment documents associated with carrying out startup fundraising can all be signed electronically too. Common confidentiality agreements signed with electronic signatures include:

  • Confidentiality agreements;
  • Non-disclosure agreements (NDAs);
  • Convertible notes;
  • Term sheets; etc.

Intellectual property transfer, licensing and assignment. Most documents regarding protection and commercialisation of intellectual property can be signed electronically. These include:

  • Selling IP;
  • Licensing IP;
  • Assigning IP;
  • Transferring IP, etc.
Client Forms
Confidentiality Agreements
Supplier Contracts
Intellectual Property
HR Documents

Presently. The ETA sets out a finite list of documents which cannot be signed using e-signatures. This means that all documents can be signed using e-signatures except for the following.

  • Wills;
  • Negotiable instruments, documents of title, bills of exchange, promissory notes, consignment notes, bills of lading, warehouse receipts or any transferable document or instrument that entitles the bearer or beneficiary to claim the delivery of goods or the payment of a sum of money;
  • Indenture, declaration of trust or power of attorney, with the exception of implied, constructive and resulting trusts;
  • Contract for sale or other disposition of immovable property;
  • Conveyance of immovable property or the transfer of any interest in immovable property.

2020 Onwards. However, this list of precluded documents is expected to shrink as the ETA is due for an update this year. In 2019, IMDA issued a Consultation Paper stating key changes it intends to make to the ETA. These amendments include permitting the following documents, previously excluded, for electronic signing.

  • Contract for sale or other disposition of immovable property;
  • Indenture, declaration of trust or power of attorney; and 
  • Negotiable instruments such as Bills of Lading.
Automating Business Processes

Amidst Covid-19, many businesses have begun exploring how to leverage new technologies to operate their business in a remote working environment. The use of electronic signatures is an easy way to get contracts signed, and keep your business in operation. 

Try sending out your first electronic document for signing for free here

Digital signatures are transforming the way we work. Join us on this mission to reinvent the age-old concept of document signatures, and embrace new business opportunities!