Your largest customer emails you the signed copy of a supply contract on a Friday afternoon and says the deal has to be locked in by Monday. One of your directors is in Sydney, the other is in Perth, and the document is a deed the customer's bank wants returned by the end of the week. Someone suggests emailing a signing link. Someone else insists that a deed has to be signed in ink in front of a witness. The choice between a wet signature and an electronic signature is now a routine part of doing business, and it is usually easy. But it is also a decision where a small mistake can leave a document unenforceable or a deal dead.
A wet signature is simply a handwritten signature in ink on a physical document. An electronic signature is any electronic method a person uses to sign, whether a typed name, a scanned image of a handwritten signature, a click on a signing platform, or a signature drawn on a touchscreen. In Australia the law has largely moved past the question of whether electronic signatures are valid at all. Under s 8 of the Electronic Transactions Act 1999 (Cth), a transaction is not invalid merely because it took place by electronic communication, and each state and territory has its own electronic transactions legislation in substantially similar terms.
One distinction is worth clearing up before you weigh the factors. "Digital signature" is often used loosely to mean any electronic signature, but strictly it refers to an electronic signature that uses encryption to verify the identity of the signer and the integrity of the document. Australian law does not require any particular technology. What matters, under s 10 of the Electronic Transactions Act 1999 (Cth), is that the method used identifies the person signing, indicates that person's intention to sign, is as reliable as appropriate in the circumstances, and is accepted by the person receiving the signature. So the real question is not whether electronic signatures are legal. It is whether your particular document can be signed electronically, and whether the method you use will hold up if the signature is later challenged.
Factors to weigh when you choose a signing method
Does the law require a wet signature for this document?
The first question is whether your document falls into one of the categories the electronic transactions laws do not reach. The Acts do not apply to everything. Section 7B of the Commonwealth Act excludes the practice and procedure of courts and tribunals, and in New South Wales the Electronic Transactions Regulation 2017 excludes requirements to lodge, file or sign documents with a judicial body in connection with legal proceedings. The categories that commonly still require a physical signature include:
- Wills: a will is not valid unless it is in writing, signed by the testator, and signed or acknowledged in the presence of two or more witnesses who then attest it, under s 6 of the Succession Act 2006 (NSW). Similar formal requirements apply in other states, so a will is not a document to sign with a click.
- Court documents and affidavits: documents filed or signed in connection with court proceedings fall outside the electronic transactions regime, and courts set their own rules for e-filing and electronic signatures.
- Statutory declarations: these generally have to be signed in front of a prescribed witness, though an increasing number of states allow the witnessing to occur over a video link.
- Enduring powers of attorney and similar enduring documents: these carry their own signing and witnessing requirements that vary from state to state.
- Documents for use overseas: foreign law, notarisation or an apostille may require an original signature in ink, regardless of what Australian law permits.
The list is not meant to send you back to printing everything. The point is that the exceptions vary by state and by document type, so the first step in any signing decision is to check the specific requirement that applies to your document. Remote witnessing is a good example of how quickly this area changes. In New South Wales, remote witnessing of documents such as wills, statutory declarations and affidavits over audio-visual link was made permanent in 2021, after starting as a temporary COVID-19 measure. What was impossible a few years ago is now routine in some states and still unavailable in others.
Will the other party accept an electronic signature?
An electronic signature only works if the person receiving it consents. Section 10 of the Electronic Transactions Act 1999 (Cth) requires the signature to be given to a person who consents to it being given electronically, and the Act makes clear that consent can be inferred from conduct, such as the other party returning a signed electronic copy or proceeding on the strength of it. Most businesses will happily accept an electronic signature, but some counterparties will not. Banks and lenders, government agencies, insurers and overseas parties may have policies that require an original wet signature, and in some cases foreign law requires it. If the other side insists on ink, the choice collapses and you should plan for the delay. It is worth asking the question before you send the signing link, because a party who quietly refuses to accept an electronic signature can leave you with a signed document you cannot rely on.
How can your company validly execute the document?
Who has to sign, and how, depends on the company execution rules in the Corporations Act 2001 (Cth). Under s 127, a company executes a document when it is signed by:
- two directors; or
- a director and a company secretary; or
- for a proprietary company with a sole director, that director alone, provided the director is also the sole company secretary or the company has no company secretary.
Since the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) made the COVID-era measures permanent, that signing can now be done electronically. Section 110A of the Corporations Act 2001 (Cth) allows a person to sign a document in physical form or electronic form, provided the method identifies the person, indicates their intention, and is as reliable as appropriate in the circumstances. It also removes a trap that used to trip up split signings: there is no requirement for everyone to sign the same form, the same page, or even by the same method. One director can sign a physical copy in Sydney while another signs an electronic copy in Perth, and the company will still have validly executed the document.
The change matters most for deeds. A deed was historically the classic wet-signature document, and it is still true that a deed signed by an individual generally requires a witnessed signature and delivery. But a company can now execute a deed electronically: s 127 of the Corporations Act 2001 (Cth) allows a company to execute a document as a deed, and the 2022 amendments removed the need for paper, parchment or vellum so the execution can be entirely electronic. If you regularly sign deeds for your company, it is worth knowing that the old assumption that deeds must be wet-signed no longer holds for companies, while the rules for individuals still vary by state.
What will it cost you in time and money?
The practical costs of a wet signature are easy to underestimate until you are chasing a document across three cities. Weigh the two routes for a typical deal:
- Wet signature: print the document, arrange signatures in the right order, courier or post it between signatories, chase stragglers, then scan and file the final copy. A deal that needs three signatures in three locations can take the better part of a week, and every day of delay is a day the other party can reconsider.
- Electronic signature: send the document through a signing platform or by email, each signatory signs in minutes from anywhere, and the platform records who signed and when. The signed copy is stored electronically with no printing, postage or filing.
For a business signing routine contracts, the time saving alone usually settles the question. The cost saving is real but smaller: printing and postage for a few documents a month is modest, although it adds up, and most e-signature platforms charge per envelope or per user. There is also a softer benefit: electronic signing cuts paper waste, which many businesses now factor into their own sustainability targets.
How will you prove the signature later?
The legal test for an electronic signature is deliberately flexible. Under s 10 of the Electronic Transactions Act 1999 (Cth), the method must be as reliable as appropriate for the purpose in light of all the circumstances, including any relevant agreement, or must be proven in fact to have identified the signer and recorded their intention. That flexibility cuts both ways. A commercial signing platform keeps an audit trail of who was sent the document, who clicked, when, and from what device, which is strong evidence if someone later claims they never signed. A typed name at the end of an email may satisfy the Act, but it is harder to prove if the other side disputes it.
A wet signature has its own evidentiary weaknesses. If a signature is later denied, the question becomes whether it is genuine, and forged or unauthorised signatures on company documents are a recurring source of disputes. Executing documents in the way the Corporations Act 2001 (Cth) prescribes also matters because people dealing with a company are entitled to rely on the assumptions in s 129 of the Act when a document appears to have been validly executed, and those assumptions protect both sides. Whatever method you choose, think about what evidence you would want if the document ended up in a dispute, and make sure the signing process produces it.
How an Artificer Legal commercial lawyer can help you choose
Most signing decisions do not need a lawyer. But the documents that carry the most risk are the ones where a lawyer earns their fee: deeds, guarantees, wills, enduring powers of attorney, court documents and anything for overseas use. An Artificer Legal commercial lawyer can stress-test the assumptions behind your choice, starting with whether the specific document can be signed electronically in your state and whether the counterparty has consented. They can check the execution requirements that apply to your company, draft the execution blocks and sign-in-order instructions so a split electronic signing is valid, and review the document before it is relied on rather than after a dispute has started. If a signature is later challenged, they can help you assemble the evidence that shows the document was properly executed and that the parties intended to be bound.
Start with the document, not the signing platform
The mistake that costs the most in this area is starting with the tool instead of the document. It is tempting to reach for a signing link because it is fast, or to print and courier because it feels safe, without first asking whether the law, the counterparty and the execution requirements actually permit the choice you are making. Most day-to-day commercial documents, and now even company deeds, can be signed electronically in Australia. The documents that still bite are the excluded ones: wills and enduring documents, court documents and affidavits, statutory declarations in most states, and documents destined for overseas. Answer the excluded-document question first, confirm the other party's position, and the choice usually makes itself.
The position in summary is this. A wet signature is a handwritten signature in ink on paper, and an electronic signature is any electronic method of signing. Electronic signatures are valid for most transactions under the Electronic Transactions Act 1999 (Cth) and its state counterparts, provided the method identifies the signer, records their intention, is reliable enough in the circumstances and is accepted by the other party. Companies can now execute documents, including deeds, electronically under ss 110A and 127 of the Corporations Act 2001 (Cth), including split signings across different forms and methods. The practical factors to weigh are time, cost and how you would prove the signature later. Where the document is a deed, a will, an enduring power of attorney, a court document or a document for overseas use, get specific advice before you sign.