Name
Global FinTech Guide
Country _ Name
Australia
SectionTitle
Signature requirements
Body
The signature requirements pertain the legal or contractual requirements in order to make a legally effective declaration of intent or a legally binding contract.

Possibility to replace a specific formal requirement of making a binding declaration of intention

The written form can be replaced with an electronic form, known as an electronic signature. The electronic signature will be legal and enforceable if it satisfies the following: 

    a) Identifies the signatory and indicates their intention to sign the document;  
    b) The method to sign electronically is deemed as reliable and appropriate in the circumstances; and
    c) The signer has consented to the method used to sign the document.

Presence of any specific formal requirements to effectively conclude a loan agreement

The loan agreement may be signed using an electronic signature if the legal requirements under the Electronic Transactions Act applicable to each state and the Commonwealth is adhered to. Further, loan agreements should contain clauses stating that the document is to be executed electronically and will be deemed valid and binding. 

Note: if the transaction documents include any documents executed as a deed, then in some States of Australia, this cannot be signed electronically given the in-person witnessing requirements for deeds.

Process of conclusion of a contract by using a qualified electronic signature in practice

While several e-signature technologies are used in Australia (for example, Docusign), there is no legislated or government-controlled body that lists trusted e-signature entities in Australia. The only requirement is for the technology used to sign the relevant document is “as reliable as appropriate” in the circumstances (see 5(a)).

Legal consequences to a contract in case of not fulfilling formal requirements

The general rules of contractual agreements apply. As such, incorrectly signed documents will usually render an agreement unenforceable.
 

Usual practice of signing contractual agreements in the B2B sector

Businesses can sign contractual agreements in both written form and digital form. They can rely on electronic signatures if certain requirements are satisfied. Companies subject to the regulations under the Corporations Act 2001 (Cth) can use an electronic signature to execute legal documents if they adhere to section 127. The company will be considered to have validly signed the contractual agreement if the signatures come from:

    a) Two (2) directors of a company;  
    b) One (1) director and one company security; or
    c) For proprietary companies, the sole proprietor but this person is not required to also be the company security.

Contractual agreements were ordinarily signed in written form until the COVID-19 pandemic and extended lockdowns (especially in Victoria) increased the need for the electronic execution of documents. Temporary measures were put in place to allow businesses to rely on electronic signatures to finalise agreements. In March 2022, Schedule 1 of the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) made the electronic execution of documents, including deeds, a permanent measure for Australian companies. 

It is common, although not yet the norm, for B2B agreements to be signed electronically.

Usual practice of signing contractual agreements in the B2C sector

Legally, this will be dependent on the State in which the contractual agreement is being entered. In some States, deeds cannot be signed electronically. In practice, while most agreements can be executed electronically, whether it is so executed comes down to the

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