The Covid-19 pandemic has been crippling on the productivity of individuals and companies. International borders have closed, national lockdowns instituted, and businesses are struggling to adapt their operations to this new state of affairs. It is anticipated that over the next year or two, countries globally will have to transit in and out of partial lockdowns.
MNCs have begun adopting electronic tools to improve flexibility, productivity and virtual collaboration in light of Covid-19 business disruptions with a great degree of speed and efficiency. Interactions have shifted to virtual platforms such as Zoom, Microsoft Teams and Slack and many other small and medium enterprises are following suit in embracing these virtual forms of communication.
However, many companies have overlooked the use of technology solutions beyond communications. In particular, many small businesses have yet to incorporate digital signatures and electronic contracts into their operations. The lack of impetus for transitioning towards digital signatures is largely attributed to uncertainty regarding the legality of electronic contracts, and how they fare against pen-and-ink signatures.
Therefore, this article will explain the types of documents that can be signed using digital signatures, and sets out a conclusive list of documents that cannot be signed electronically.
Under the Electronic Transactions Act (“ETA”), which sets out the law governing digital signatures in Singapore, it states that all documents signed using electronic signatures have similar legal effect to pen-and-ink signatures, with the exception of five (5) categories of documents.
In other words, using digital signatures has an equivalent legal effect to printing out a contract from PDF, signing it with a pen, scanning it onto your computer, and sending it out.
1. Contracts, authorizations and client forms
This category refers to documents which must be signed by clients, such as:
2. Employment contracts and HR operations
Hiring new employees and updating staff on company policy can all be carried out using digital signatures now. Documents under this category include:
3. Supplier contracts
These include supply agreements, procurement contracts, cost reimbursement contracts.
4. Confidentiality agreements and investment documents
Confidentiality agreements and investment documents associated with on-boarding new employees and carrying out startup fundraising can all be signed electronically too. Common confidentiality agreements signed with digital signatures include:
5. Intellectual property transfer, licensing and assignment
Most documents regarding protection and commercialisation of intellectual property can be signed electronically. These include:
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.
However, this list of precluded documents is expected to shrink as the ETA is due for an update this year. In the Consultation Paper issued by IMDA in 2019, it is stated that key changes to the ETA include permitting the following documents, previously excluded, for digital signing. Following the revision of the ETA, it is likely that the following documents can be signed using digital signatures:
The Singapore Government has evidently taken great stride in enabling the versatility of digital signatures in business and personal transactions through the enactment and revisions of the Electronic Transactions Act (ETA).
Our Digital Signature Services is operating in tandem with the state initiative towards the digitalization of commercial practice, and incorporates SingPass MyInfo service into our digital contract and signature services. Presently, we are running a promotion for all Singaporeans as part of our initiative to support locals amidst the Covid-19 pandemic. If you are keen to try out our Services, do check it out here.