Electronic execution
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Evidencing offer and acceptance of a contract using digital authentication technology. A topic that for all the current excitement relating to matters digital and artificially intelligent, receives less attention than it really should. For a properly implemented digital execution strategy will yield productivity and data control benefits out of all proportion to the simplicity of the technology, and certainly will have a bigger day-to-day impact on productivity then chatbots, natural language processing or machine learning.
But does it work, legally?
Cue voluminous, sombre, tedious monographs on the legal effectiveness in different jurisdictions of electronic signatures.
But — unless your instrument is a deed or lease or has peculiar formal execution requirements — most confirmations and instructions which pass between the operational teams of financial institutions don’t—it really needn’t be that complicated. Generally, digital signatures are fine and, in many respects, better than a handwritten signature, especially a scanned, emailed facsimile of a handwritten signature which could easily have been forged.
For a signature – any signature — is simply a means of gathering and recording evidence and that your counterparty agreed to your transaction or gave the instruction that your records say it did. It is an audit trail. It is due diligence. You will only need it if you wind up having an argument with your counterparty about your contract. The moment your counterparty denies signing your contract, is the moment you pull out your dog-eared copy of its signature — or your fully authenticated, time-stamped, digital representation of its authorised officer’s agreement. Are
So your key question, always, is “how confident do I feel that this instruction/consent is genuine, so I can prove it to a court later if I need to?” Where you have a digital signature, in most cases (other then deeds) the natural answer ought to be “very”, or at least “quite”.
It doesn’t matter if it is a hand-inked signature scratched on onion skin with a quill and waxen seal, or a two-factor-authenticated digital signature or, for that matter, a series of unambiguous semaphore messages from a person atop a distant hill whom you sincerely and plausibly believe to be your client. If it is your client, and you have a record of its assent, however communicated to you, it will be hard for your client later to claim the contrary.