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Sage Accountants Blog


Legal guidance about electronic signatures on documents

12 February 2015

With  the release of Client Portal, and therefore having documents approved electronically, we asked our Group Corporate Counsel, Jae King, about how Australian law views electronic or digital signatures. 

What is an electronic signature?

An electronic signature is a method used to identify a person and to indicate his or her approval of the information which he or she has communicated.

A person may electronically sign a document by simply typing his or her name into the document, inserting an electronic representation of his or her signature into the document (e.g. a picture or image of the person’s signature) or entering a PIN code.

However, whether or not the person will be legally bound by using an electronic signature in any of these forms will depend upon a number of factors which are considered below.

When can a person use an electronic signature?

Unless an exemption applies, Commonwealth and State electronic transactions laws permit a person to use an electronic signature where the person’s signature is required respectively under a Commonwealth or State law (e.g. taxation, superannuation or employment law).  

However, if the signature is required to be given to a private sector or State entity then the entity must have consented to the person using an electronic signature.  

Exemptions apply in respect of specified Commonwealth and State laws and legal requirements (e.g. wills and other testamentary instruments and personal service requirements) in respect of which a person is not able to use an electronic signature.

When will a person be legally bound by a contract entered into using an electronic signature?

A person will not be legally bound by an electronic signature unless the requirements of the applicable Commonwealth or State electronic transactions law are met.

Under Commonwealth and State electronic transactions laws a person will not be bound by an electronic signature unless:

 * the electronic signature method used was either:

  • as reliable as appropriate for the purpose for which the electronic communication was communicated, in the light of all the circumstances, including any relevant agreement;
  • proven to identify the person and to indicate his or her approval of the information which he or she has communicated; and
  • the person who requires the signature has consented to the use of the method.
* if the electronic signature was required to be given to a Commonwealth entity – the electronic signature requirements of the Commonwealth entity were met; and
* if the electronic signature was required to be given to a private sector or State entity – the entity consented to the person using an electronic signature.

What records need to be kept when a person uses an electronic signature to enter into a contract?

An entity which consents to a person using an electronic signature should keep full details of the electronic signature method used and sufficient evidence to establish the person’s identity and that he or she approved the information which he or she communicated to the entity (e.g. a log of actions together with a record of the information communicated).

Software applications like Sage HandiSoft’s new client portal use acceptable, highly secure methods. For more details on Client Portal, you can find further information on our website.

Please note that the above information is provided for information purposes only and is not intended to be relied upon as legal advice for any particular purpose. You should seek your own independent legal advice for your specific circumstances.