Global FinTech Guide
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Signature requirements
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 traditional written form of a signature could be replaced by an electronic signature and/or certificate-based digital signature by ensuring that such signatures follow the Electronic Commerce Act 2006 (“ECA”) or Digital Signatures Act 1997 (“DSA”).

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

Execution of agreements by a corporate entity must be in a manner that is aligned with the entity’s constitution. 

In Malaysia, a loan agreement typically needs to be stamped by the Inland Revenue Board within 30 days from the date of execution, in order for it to be admissible as evidence in a court of law, or to be acted upon by a public officer.

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

Electronic signatures are legally valid as long as they fulfil the requirements under the ECA, namely that they are attached to or logically associated with the electronic message, adequately identify the signer, and adequately indicate the signer’s approval of the information to which the signature relates and be as reliable as is appropriate for the purpose and circumstances in which it is required. To demonstrate this, the following must be met:

    a) The means of creating the electronic signature is linked to and under the control of the signer only;
    b) Any change to the e-signature post signing is detectable; and
    c) Any change to the document post signing is detectable.

Certain instruments are exempted from the scope of the ECA, such as powers of attorney, wills and codicils, trusts, and negotiable instruments. 

Meanwhile, a digital signature is recognised under the DSA, where it is verified by reference to the public key listed in a valid certificate issued by a licensed certification authority, was affixed by the signer with the intention of signing the message, and the recipient has no knowledge or notice that the signer has breached a duty as a subscriber; or does not rightfully hold the private key used to affix the digital signature. All licensed certification authorities must hold a valid license issued under the DSA. Currently, there are only four (4) licensed certification authorities: Pos Digicert Sdn Bhd, MSC Trustgate.Com Sdn Bhd, Telekom Applied Business Sdn Bhd, and Raffcomm Technologies Sdn Bhd. 

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

The contract would be rendered void and unenforceable.

Usual practice of signing contractual agreements in the B2B sector

Contractual agreements in the B2B sector are usually signed in wet ink, but recent years have seen the rise in popularity of electronical signing due to remote working arrangements due to the pandemic. 

Usual practice of signing contractual agreements in the B2C sector

Contractual agreements in the B2C sector are usually signed in wet ink, but recent years have seen the rise in popularity of electronical signing due to remote working arrangements due to the pandemic.



© 2022, Lee Hishammuddin Allen & Gledhill. All rights reserved by Lee Hishammuddin Allen & Gledhill as author and the owner of the copyright in this chapter. Lee Hishammuddin Allen & Gledhill has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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