The Movement Control Order (“MCO“) has unexpectedly required Malaysian business owners, in many circumstances, to attempt to operate in a remote work environment. This sudden adjustment has amplified the importance of relying on electronic signatures, in lieu of traditional “pen”.
The relevant Act to tackle this issue would certainly be the Electronic Commerce Act 2006 (“the Act”).
Q1: What is Signature?
Pursuant to Bindra’s ‘Interpretation of Statute’ at p 1115, a signature is only a mark, and where a statute merely requires that a document shall be signed, the statute is satisfied by proof of the making of a mark upon the document by or the authority of the signatory.
In Morton v Copeland (1855) 16 CB 517 the Court held that the necessity of signatures arises in every case from the express requirement of the statute. Signature does not necessarily mean writing a person’s Christian and surname, but any mark which identifies it as the act of the party.
Q2:What is Electronic Signature?
Section 5 of the Act defines “electronic signature” as any letter, character, number, sound or any other symbol or any combination thereof created in an electronic form adopted by a person as a signature.
In Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478, the Federal Court held that signatures need not be written. Suffice if there be any mark, written or not, which identifies the act of the party, perhaps in the form of mark or by some distinguishing feature peculiar only to that person, then the acknowledgment has been signed.
Q3:Is Electronic Signature Reliable?
Pursuant to Section 9, where any law requires a signature of a person on a document, the requirement of the law is fulfilled, if the document is in the form of an electronic message, by an electronic signature which—
(a) is attached to or is logically associated with the electronic message;
(b) adequately identifies the person and adequately indicates the person’s approval of the information to which the signature relates; and
(c) is as reliable as is appropriate given the purpose for which, and the circumstances in which, the signature is required.
An electronic signature is as reliable as is appropriate if—
(a) the means of creating the electronic signature is linked to and under the control of that person only;
(b) any alteration made to the electronic signature after the time of signing is detectable; and
(c) any alteration made to that document after the time of signing is detectable.
The Digital Signature Act 1997 shall continue to apply to any digital signature used as an electronic signature in any commercial transaction.
Q4:Is Electronic Signature Legally Recognised?
Yes, to commercial transaction.
Pursuant to Section 5 of the Act, commercial transactions mean as a single communication or multiple communications of a commercial nature, whether contractual or not, which includes any matters relating to the supply or exchange of goods or services, agency, investments, financing, banking and insurance. It does not include the following: -
- Power of attorney
- The creation of wills and codicils
- The creation of trusts
- Negotiable instruments
Q5:Is Electronic Signature Admissible in Court?
Yes.
For instance, SMS could fulfil the legal requirement for a signature. Decided in Yam Kong Seng & Anor v Yee Weng Kai [2014] 6 CLJ 285 [Federal Court], followed by Flexi Homes Sdn Bhd v Atea Environmental Technology (M) Sdn Bhd [2017] 7 MLJ 197 [High Court].
Electronic signature is not a new trend as the Act has been around since 2006 to provide for legal recognition of electronic messages in commercial transactions, the use of the electronic messages to fulfill legal requirements and to enable and facilitate commercial transactions through the use of electronic means and other matters connected therewith. We opined that business owners should take this opportunity to evolve from the traditional “pen” to electronic signature for commercial transactions in light of the current situation and to continue to do so in the future.
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