Interest in the commercial use of the internet in Singapore continues to rise at an extraordinary rate despite some potentially thorny issues of law which remain uncertain. It is clear that, for e-commerce operations anywhere in the world to be successful, many of these issues must be overcome. One of the key questions in regards to contracts and internet usage in Singapore is; are electronic signatures legally enforceable?
These kinds of questions and several other formerly regarded contentious matters have since been elucidated with the passing of the Singapore Electronic Transaction Act (ETA) 1998. Governments all over the globe have acknowledged that their economies must be geared up for different technologies being embraced in different industries, and Singapore for that matter hasn’t been left behind. In fact, with the enactment of ETA 1998, Singapore is seen as one of the first nations in the world to embrace legislation that addresses questions that crop up in the electronic and digital signature sector.
Following the United Nations Convention (UN Convention) on the application of electronic communications in contracts, Singapore carried out a further review of the ETA 1998, to come up with an updated ETA in 2010. The 2010 ETA retained the legal format for handling electronic transactions found in the 1998 ETA; though, there were various details that were altered, to provide better flexibility.
Singapore legal model – Electronic Signature
Singapore’s legal model is essentially a tiered one. In brief, this means that Qualified Electronic Signatures (QES) are deemed to be legally enforceable. However, this does not suggest that non-Qualified Electronic Signatures cannot be used in a court of law, but they need additional evidence to support them.
Under Singapore law, contracts are usually considered legally binding if parties have willingly agreed, be it verbally, digitally, or on a paper. To prove that an agreement is legitimate, pertinent parties should be in a position to avail of evidence in court. Under the ETA, electronic records that support the existence, authenticity, and legality of a contract are normally satisfactory as evidence according to the Evidence Act.
Electronic Transactions Act
This act was passed by Singapore parliament to deal with the issues of legitimacy of electronic transactions and records. The act was created with the following principles:
- The need to observe the international standards to be incorporated into the global e-commerce framework
- The need to be technologically neutral and flexible to adapt to a free-flow international environment
- The need to prevent over-regulation
- The need for predictability and transparency in our laws
The ETA also covers the following areas:-
1. Electronic contracts
The section covers e-contracts which are anchored on the UNCITRAL laws. It also helps solve the matters on indistinctness of laws concerning e-contracts. More so, the act spells out the position of electronic contracts. According to this section of the ETA, the enforceability and validity of a contract cannot be denied just because the offer and acceptance were made electronically.
2. Electronic signatures and records
The Singapore ETA gives legal acknowledgment to electronic signatures and records by way of evidentiary presumptions to make sure that they have similar legitimacy and enforceability abilities of paper records. The presumptions are:
- Electronic records and paper records are the same in the eyes of the law
- Handwritten signatures and electronic signatures are the same when satisfying the legal prerequisites of a signature
- There is no difference between paper records and electronic records when admitting them as evidence in a court of law
- There is no difference between paper documents and electronic records when satisfying the legal prerequisites of a signature.
Use cases for e signatures in Singapore
In Singapore, businesses and individuals have been using electronic signatures to create legally binding documents. Some instances where electronic signatures are prevalent and are deemed enforceable:
- commercial agreements between organizations such as NDAs, purchase orders, sales agreements, among others
- consumer agreements such as services terms, sales terms, purchase orders, among others
- HR documents such as employment contracts, NDAs, privacy notices, among others
- software license agreements
- copyright licenses
- patent licenses
- trademark licenses
- service agreements
Matters that cannot be signed electronically in Singapore
Despite the prevalence of pdf forms, documents executed through electronic signatures, some cases cannot be executed or eSigned. Such instances have been exempted from the scale of operation of the ETA, which includes:
- Declaration of trust or power of attorney
- The creation or execution of a will
- Negotiable instruments, documents of title, bills of lading, promissory notes, consignment notes, bills of exchange,
- Warehouse receipts or any transferable instrument which entitles the beneficiary or bearer to claim payment or claim the delivery of certain goods
- Any agreement for the sale or transfer of immovable property
The introduction, of e-commerce and the employment of digital channels as an alternative to physical channels, has raised fresh legal questions where there are no lucid answers. It’s obvious, for transactions and communication happening over a faceless network, more dependable methods are required to validate a person’s identity and guarantee the genuineness of the electronically transmitted documents. However, ETA aims to address these vital issues and to act as the point of reference for e-signature laws in the country.
Most importantly, Singapore law spells out that a wet-ink signature is not usually needed for an agreement to be deemed valid and that agreement can’t just be denied for being electronic. These electronic Contracts and agreements will typically be viewed as compelling as long as all the involved parties have shown consent.
In a nutshell, Singapore has strived to remain in line with changes in electronic communications by revising the evidence act, and by giving evidential weight and legal authority to electronic signatures and electronic records via the ETA, and other accompanying legislation. More so, this is one country that has strived to synchronize its laws with those of its key trading partners such as, the OECD Guidelines, UNCITRAL Model Laws, APEC, WTO, ICC’s Guide and other international organizations.
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