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.
What documents can be signed using digital signatures?
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.
Top 5 most common documents signed with digital signatures
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 digital 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 on-boarding new employees and carrying out startup fundraising can all be signed electronically too. Common confidentiality agreements signed with digital 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.
Refer to Appendix A for a longer list.
What are some documents that can’t be signed using e-signatures?
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 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:
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.
Conclusion
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.
Appendix A
Offer letters
Employment contract
Job descriptions
Restrictive covenants
Retention bonus agreements
Employment handbook
Business terms of service
Non-disclosure agreements
References
Consultation Paper issued by the Infocomm Media Development Authority on the Review of the Electronic Transactions Act (ETA) (Cap.88), June 2019, https://www.imda.gov.sg/-/media/Imda/Files/Regulation-Licensing-and-Consultations/Consultations/Consultation-Papers/Public-Consultation-on-the-Review-of-the-Electronic-Transactions-Act/Public-Consultation-Paper-on-the-Review-of-the-Electronic-Transactions-Act-27-Jun-2019.pdf?la=en
Electronic Transactions Act (Cap. 88), Rev Ed. 2010, https://sso.agc.gov.sg/Act/ETA2010?ProvIds=pr9-
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!
