Run | 27 May 2018

Please sign here. E-signatures and your business.

Reading Time: 4 minutes

It’s 2018. You’d think that the days of receiving an email with a bunch of documents you need to print, sign, scan and send back or return via courier were behind us. The invention of the electronic signature (e-signature) was designed to solve the problems with this process. But there has been a reluctance to say goodbye to paper, pens, scanners, couriers and even fax machines. This hesitation is most likely due to the uncertainty as to whether an e-signature will be legally enforceable.

What is an e-signature?

This is a generic term which includes all the ways in which someone can “sign” an electronic document. E-signatures can be created in various forms using different types of technology. Examples include the name typed at the end of an e-mail message, a digital image of a handwritten signature which is attached to an electronic document, a unique code or PIN which identifies one party to another, and a digital signature using the public key infrastructure (PKI) protocol.

What is a digital signature?

A digital signature is a form of e-signature that is unique to the document and to the person signing it as information is embedded in the document via a digital certificate. Digital signatures use technology which follows the PKI protocol. PKI allows users to establish the authenticity of the person “signing” the document. Using two keys (a series of long numbers generated using a mathematical algorithm) and encryption, the digital signature is bound to the document and both the signature and your identity are linked to you. The encrypted data also includes the time that the document was signed and the digital signature will be invalidated if the document is changed after signing. The benefit of using a digital signature is that the document is secure and the digital signature cannot be altered or amended.

Does UAE law recognise electronic contracts and e-signatures?

Yes. Electronic contracts and e-signatures are both recognised under Federal Law No. 1 of 2006 concerning Electronic Transactions and Commerce (e-Commerce Law). Unless the law provides otherwise, a person can use any form of electronic authentication. The consent of the parties to contracting electronically can be inferred from their conduct, except for UAE government entities which must give express consent to contract electronically.

What types of e-signatures are permitted?

The e-Commerce Law sets out a waterfall of electronic authentication requirements, from the least to the most secure:

•  generic e-signature: any electronic information used to sign a document e.g. simple e-mail signature block through to digital signature which follows PKI protocol;

•  reliable e-signature: where it is reasonable to rely on the signature given the nature, value and importance of the transaction; any previous dealings between the parties; and whether the recipient took appropriate steps to determine the reliability of the signature;

•  secure e-signature: using a secure authentication process and the signature can be verified as being unique, capable of identifying the person, under the control of the signer and is linked to the underlying electronic record; and

•  secure e-signature with a certificate: an e-signature that uses PKI to ensure the identity of the parties and the integrity of their communications.

Are there times when I can’t use e-signatures?

The following transactions and documents are excluded from the e-Commerce Law and so e-signatures cannot be used:

•  title deeds to real property;

•  transactions relating to the registration of rights, sale, purchase, lease (for a term of more than 10 years) and other dispositions of real property;

•  transactions and issues relating to personal or family law e.g. marriage, divorce and wills;

•  negotiable instruments;

•  documents legally required to be notarised before a Notary Public; and

•  documents or transactions which are excluded by other law.

My contracts are governed laws of England and Wales. Are e-signatures recognised?

Parties in the UAE often use the laws of England and Wales as the governing law of their contracts. Electronic signatures are recognised and enforceable, in principle, under English law.

Why should I use e-signatures?

•  Reducing paper: Removes paper from your workflow and the need to physically move and store it.

•  Speed: Less scope for delays and errors associated with moving paper around.

•  Secure: paper documents are easily lost, stolen or forged whereas documents using e-signature technology are encrypted and stored securely.

•  Sales team: improvement customer engagement and productivity; ability to manage multiple accounts on the road remotely; and allows the team to close deals faster.

•  Legal requirements: your e-signature platform should handle the legal requirements (e.g. obtaining consent from the parties), maintain the signed contract and capture an audit trail of the signatures (needed if you ever find yourselves in court).

•  Happy customers/clients: they don’t pay for the software – the business creating the contracts for e-signature is the party that pays for the use of the technology. It is relatively inexpensive to sign up to an e-signature platform to offer this service to your clients or customers.

What about click-wrap, browse-wrap and shrink-wrap contracts?

Click-wrap agreements are permitted under UAE law if the user positively affirms their acceptance of the terms and users are normally asked to check a box to do so. Note that any contracts which are excluded from the e-Commerce Law cannot take the form of a click-wrap contract.

What can I do if someone breaches our electronic contract?

There aren’t many specific remedies for breach of an electronic contract under UAE law. Any remedial action for breach of an electronic contract would follow the same path as the one followed for breach of a conventional contract in the UAE.

How do I use e-signatures in my business?

Simply sign up for one of the platforms like SignEasy, HelloSign or DocuSign, all of which are specialist platforms and applications who deal with e-signing.