The Recognition of Electronic Signatures
Written by Guest Writer Nyasha Chishakwe
Electronic signatures (e-signatures) are basically signatures
in electronic form that authenticate communiqués, records
or documents created and transmitted electronically from one
network computer to another by the respective users. The transmission
or exchange of such electronic documents or data messages
may be in pursuance of a contract or any commercial dealing.
It is therefore necessary for such types of transactions to
be verified or endorsed by a signature that befits the electronic
medium of communication. The benefits of e-signatures in business
cannot be over-emphasised. They basically reduce transaction
costs and enable the conclusion of transactions that ordinarily,
under paper-based systems, would take hours of deliberations
by a click of a button. Electronic signatures therefore stand
at the core of e-commerce. It accordingly follows that domestic
laws or in our case Zimbabwean laws should recognise such
an essential concept for e-commerce to function.
At the present moment our common and statutory laws recognise
only formal hand-written signatures. Electronic signatures
or electronic writings are not recognised as valid. This naturally
acts as a handicap for the function of e-commerce because
it impinges on the validity of transactions. If a transaction
is not validated by a signature it has no force and cannot
be enforced.
This status of affairs brings uncertainties in transactions
and may consequently impede the development of e-commerce.
Consider a situation where a company that is domiciled and
incorporated under the laws of Zimbabwe and intends to conduct
on-line retail services to customers in Zimbabwe under the
present laws. Recognising the risks involved in entering into
contracts of sale that may be invalidated due to the inadequacy
of the law on e-signatures, it will prefer to have customers
physically sign order forms and itself to physically issue
out paper invoices for payment. This situation makes e-commerce
meaningless. The efficiency and cost reduction that is anticipated
by e-commerce will not be achieved.
The solution lies in the introduction of the concept of electronic
signatures in our laws. In particular our laws should recognise
electronic signatures as equivalent to formal written paper-based
signatures used in the ‘off-line’ world. This should
be done without prescribing a particular form of authentication
technology. As a start it is recommended that our laws should
merely accord equal status to hand-written and electronic
signatures. Some scholars have called this the minimalist
approach. It is being practised in most common law countries
such as Canada, the United States, the United Kingdom, Australia,
and New Zealand[1]. This approach basically advocates for
the use of electronic signatures generally with the primary
objective of removing existing legal obstacles to the recognition
and enforceability of electronic signatures and data messages.
This is done by providing that if the provisions of the law
on e-signatures are complied with, an e-signature in an electronic
document will be equivalent to a hand-written signature on
paper.
2.1.1 How the Minimalist Approach to Electronic Signatures
Functions
Under the Minimalist approach the aim is to accord equal
status in legal terms between hand-written signatures and
e-signatures. To do this a standard or criteria of authenticating
electronic signatures will have to be introduced without prescribing
a particular form of authentication technology, such as Public
Key Infrastructures (PKIs). These standards will be administered
by an independent Certification Authority (CA). If an electronic
signature meets these standards it should be regarded as equivalent
to written signatures. This way parties can transact in a
predictable legal environment without subjecting themselves
to specific authenticating technologies that may become obsolete
with time through the development of new technologies. This
method also envisions the concept of party autonomy and freedom
of contract by permitting parties to vary the terms of any
authentication law or regulation by mutual agreement.[2] Such
an agreement is significant in so far as it allows the parties
to verify their intent to transact and enhancing their confidence
in the authenticity of the authenticating technology. The
agreement allows them to vary the law where they are of the
view that it is not secure.
The minimalist approach was followed by UNCITRAL in the preparation
of the model law on e-commerce. Article 7 (1) (a) and (b)
of the model law states thus:
Where the law requires a signature of a person, that requirement
is met in relation to a data message if:
(a) a method is used to identify that person and to indicate
that person’s approval of the information contained in
the data message; and
(b) that message is as reliable as was appropriate for the
purpose for which the data message was generated or communicated,
in the light of all the circumstances, including any relevant
agreement.
It is the writer’s contention that the concept of electronic
signatures is at the ‘heart’ of e-commerce. Accordingly
our laws should recognise them as equal to hand-written signatures.
That way e-commerce can function without legal uncertainties.
Whilst there are various approaches to the development of
e-signatures, it is the writer’s submission that the
minimalist approach is appropriate in our case because it
conforms to our country’s economic and legal context.
Next week we focus on the concept of privacy in e-commerce
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