It’s been 16 years since the Australian Government legalised the use of electronic signatures in 1999. It was the year of The Matrix, Bluetooth and Y2K hysteria. Seems like a technological lifetime ago right? Yet despite the vast years in between, many Australians still don’t realise that e-Signatures have the legal tick of approval. Even with the growth of e-commerce, the frustrating norm for many businesses is still handwritten signatures, which waste time and money for everyone involved.

Don’t let another year (or 16!) pass by before you get to know the real facts about the legality of electronic signatures and how you can use them in your business. Here’s 5 simple facts to get your head around:

  1. THEY ARE LEGAL The online signature are valid and legally binding on a Federal and State level in Australia. In many countries, including Australia, the United States and the European Union, e-signatures have the same legal consequences as the more traditional forms of paper documents. The Electronic Transactions Act 1999 (Cth) (ETA) states that no transaction will be invalid just because it was completed electronically.
  2. 3 REQUIREMENTS Now we’ve established that e-signatures can be legally binding, there are three requirements the Act sets out that must be met to ensure legality:
    Identification: You must be able to identify the person signing the document
    Consent: You must be able to prove that the person signing the document did consent to using that method
    Reliability: You must show that the method used to insert the signature was reliable and appropriate for that purpose.
  3. OUR SYSTEM IS LEGAL Formaliti entirely complies with the ETA, as the 3 requirements listed above are built into the software. For example: when you send a document to be signed, you are sending it securely to an email address that only the signer has access to (unless others have their unique login details). Next, there are multiple “Consent to Sign” and “Are You Sure?” messages that must be completed by the signer. Finally, there is secure encryption of data during transit and all data is housed in bank grade secure facilities. Additionally, there is an automated audit trail attached to each document that cannot be tampered with manually.
  4. ELECTRONIC SIGNATURE VS DIGITAL SIGNATURE The terms ‘digital signature’ and ‘electronic signature’ are often confused and used in the same context. A digital signature requires a signer to have a certificate-based digital ID, for example a token (such as you will find with bank accounts), smart card, or other physical device. Digital certificates are issued from a Certificate Authority (also known as a trusted authority) and provide a high level of authentication, integrity and security with respect to the identity of the parties signing. A digital signature is a higher level of authentication but it is not required for the majority of documents and forms and is usually supplied at a higher price point due to the infrastructure required to deliver them.
  5. SEEK LEGAL ADVICE Make sure you consult professional legal advice to ensure your documents and forms are suitable for electronic signing.

If you’re still concerned about the risks involved in using an electronic signature, think about this common occurrence: You send a form via email for your customer to print, sign and send back to you, or you fax a document to be signed, or even post or courier it. They return it to you and you haven’t ever seen them. You have not obtained proof of identity. In fact you have less visibility into the document’s journey and it is less secure! Check out this recent blog which further addresses e-Signature risk, fear and forgery.

Check out these Legal FAQs for some more information. The electronic signatures have the legal tick of approval. If you want to give them yours, get in touch with us today.

Craig Wallace Signature
Formaliti CEO
T: (+61) 1800 765 840 | M: (+61) 0405 646 200 | E:



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