Electronic Signatures Revisited (But Why?)

Is an electronic signature valid in law? Twenty-five years after the Internet was opened to commercial use, that may seem to be a surprising question. An off-the-cuff response might be, “why shouldn’t it be?” The law does not prescribe a form or medium for a signature. Any method of associating a legal entity (human being, corporation, government) with a piece of information (document, text, inscription) will do the job, if the legal entity had the intention that the association should be for the purpose of signing it.

A signature may have many purposes, of course: to indicate consent, to show presence (as a witness), to show transmission (as an endorsement), to show review (as in a circulation sheet).

A signature has traditionally been done by marking ink on paper, but traditions do not bind us at law. The law evolves.

A more deliberate response might be “See section 11 of the Electronic Commerce Act, 2000 (Ontario)” or its equivalents in most of the rest of the country. (This note will confine itself to the common law. Civil lawyers are welcome to comment too.) That provision reads:

A legal requirement that a document be signed is satisfied by an electronic signature.

The Act allows this rule to be qualified in prescribed circumstances, but no such prescribing regulation has been made.

“Electronic signature” is defined as follows:

“electronic signature” means electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the document

The definition was intended to show three things:

  • An electronic signature does not have to look like or be an image of a handwritten signature. It is electronic information in any form if it serves the stated purpose.
  • An electronic signature may be in a separate document or piece of data from the signed text, so long as the connection is clear – just as one can hand sign a document on a separate piece of paper and attach it to the document later. (Some similar statutes say “logically associated”, meaning computer logic or mathematical logic, not just circumstantial logic.)
  • The intention of the signatory, the mental element, is “to sign”. There is no difference in intention for an electronic signature. An electronic signature is part of the general law of signatures for all purposes. The use of the same word is not redundant or circular, it is critical to the policy.

As a result, where the Act applies, there would appear to be no problem of legal validity.

Two comments arise from the phrase “where the Act applies”.

  1. A number of types of document or transaction are excluded from the Act by section 31: wills, personal powers of attorney, negotiable instruments. Thus the simple validation of e-signatures does not apply in those cases. When the Ontario Act was passed in 2000, most real estate transactions were also excluded, but that provision was repealed in 2015. A number of other exceptions or restrictions also apply that need not concern us here – privacy, biometrics, record destruction, documents of title, and others.
  2. The Act applies where a legal requirement exists that a document be signed. There are not many such requirements. Generally speaking, the common law allows many interactions to occur orally, and others that require written form do not add “and signed”. If a transaction does not need a signature, then the parties who choose to use one anyway are free to choose any form of signature they want, including an electronic signature. This is an important limit to arguments about how the Act operates.

Despite this apparently clear rule of law, nearly twenty years after it was passed, the status of electronic signatures is still attracting attention. This note discusses three examples: the Law Commission of England and Wales’s project on the execution of legal documents, the analysis by the Toronto Opinion Writers’ Group (TOROG) of the acceptability of electronic signatures in business matters, and recent amendments to Ontario business statutes.

The Law Commission study

At about the same time as the Uniform Law Conference of Canada was adopting the Uniform Electronic Commerce Act, which Ontario’s statute basically implements, the Law Commission of England and Wales was considering the legal status of electronic signatures.

It concluded, in an “Advice” it gave to the government, that electronic signatures were valid without any legislation in support, where an authenticating intention could be demonstrated. It did not recommend legislation on this point. The government enacted the Electronic Communications Act, 2000 to confirm that e-signatures were admissible in evidence and to deal with other elements of the use of technology, but the Act did not confirm the validity of e-signatures.

English case law since that time has consistently upheld the validity of e-signatures if the appropriate intention could be shown.

Nevertheless, a remarkable number of commercial solicitors continued to have doubts about using e-signatures, especially in “important” cases involving a lot of money. Two committees of senior business law practitioners in England considered the execution of documents at a virtual signing or closing, reporting in 2009, and the execution of a document using an electronic signature, reporting in 2016. Both reports found that e-signatures were valid for the purposes examined.

In the light of continuing (though lessened) concern, the Law Commission took up the subject again. A further review, assisted by experts, led it back to the same conclusion. Its consultation paper No. 237, published in the summer of 2018. found that e-signatures were effective in law where the law required a signature, and also even if it did not, and that legislation was not advisable. Legislation might cast doubt on the prior validity of signatures – though it could be expressly retroactive – or on anything left out of its scope.

The Commission discussed the degrees of reliability of different kinds of e-signatures but noted that no one is compelled to accept and thus rely on any particular e-signature. A thorough review of reliability issues was written for the Commission by Nicholas Bohm and Stephen Mason. Since the relying party takes the risk of fraud, that party can demand a signature it considers reliable. No statute is required to support or to guide this choice.

In my view as well, it is not desirable to require that e-signatures should have to meet a reliability standard to be valid.


TOROG unites a number of research and transactional lawyers from Toronto law firms and banks who consider matters that create issues in legal opinions. Around 2016, it was facing questions similar to those addressed in England by the Law Commission. Lawyers were hesitating to use electronic signatures out of doubts about their validity. Apparently the Ontario statute was not clear enough – though in fairness, some of the documents in their transactions would be governed by federal law, and the electronic documents sections of the Personal Information Protection and Electronic Documents Act (PIPEDA, much better known for its privacy rules), are more complicated than the provincial legislation.

TOROG considered the general picture of e-signatures, their use in particular corporate situations (share certificates, resolutions, proxies, corporate finance), in particular disciplines (intellectual property, competition law) and in multi-party transactions where signatures might be attached after long negotiations. Its conclusion was that e-signatures were valid in law in just about every circumstance.

Special attention was paid to signing platforms like Docusign. Such a platform can overcome some of the concerns mentioned by Bohm and Mason about reliability and sequencing signatures.

TOROG is interested in feedback from practitioners. Slaw has a rubric for TOROG publications, and the e-signature document would be appearing there to accompany this column, except for the third consideration addressed here: doubts created by the separate treatment of electronic signatures by Ontario’s business statutes. TOROG is considering whether it needs to qualify its general approval of e-signatures in the light of this concern.

Amendments to Ontario Business Law Statutes

The Electronic Commerce Act applies to all provincial law, unless otherwise stated, and not just to “commerce”. Ontario and several other provinces followed the Uniform Law Conference title when they implemented the Uniform Electronic Commerce Act. “Electronic commerce” was the popular phrase at the time for many uses of electronic communications. Some other provincial variants for the same statute were Electronic Transactions Act (BC, Alberta, New Brunswick) and even Electronic Documents and Information Act (Saskatchewan).

In any event, the signature rule applied to a “legal requirement” – as did the provisions on electronic equivalents of writing and originals and the retention of records.

The purpose of such a broad application was to avoid the need to separately amend hundreds of statutes and regulations that contained such requirements. One size could fit all, or certainly most, cases.

The Electronic Commerce Act does allow for different approaches. Besides the outright exclusions mentioned above, the e-signature section contemplates regulations that might prescribe either a general test of reliability for the signature method chosen or the use of a specific method considered suitable for the purpose of the regulation. (Sections 11(3), (4))

In addition, section 26 provides that “Nothing in this Act limits the operation of any provision of law that expressly authorizes, prohibits or regulates the use of electronic information or electronic documents.” The government did not intend to override legislation – prior or subsequent – that had thought out schemes for using electronic communications or that imposed restrictions or conditions on them.

Despite the generality of the permission to use e-signatures in the Electronic Commerce Act, Ontario’s business law statutes have over the years tended to give such permissions directly. A number of related amendments to several statutes in 2017 have underlined the issue. (Not all the examples here are recent, however.) For example, section 110(2) of the Ontario Business Corporations Act:

a proxy must be signed,

(a) in writing or by electronic signature by the shareholder or an attorney who is authorized by a document that is signed in writing or by electronic signature;

And in the Corporations Information Act, section 10.3:

If a notice or other document is required to be sent to the Ministry under this Act, the Ministry may accept a copy of it, including an electronic copy

Compare section 15 of the E-Commerce Act, which permits public bodies to collect information electronically. Does spelling it out in the corporate statute cast doubt on the generality of the wider Act?

Sometimes the statutes even expressly make the E-Commerce Act apply – as if it did not already under its own terms. For example, OBCA section 262:

A notice or document required or permitted to be sent under this section or section 263 may be sent by electronic means in accordance with the Electronic Commerce Act, 2000.

This appears to make little sense. On the contrary, it risks suggesting that without this provision, the E-Commerce Act would not apply – which is in my view a doubtful proposition.

At other times the statutes contemplate that the Minister responsible for them, or a pubic servant in the ministry, will make rules – not regulations under Part III of the Legislation Act – about how signatures can be done electronically. For example, section 21.4 of the OBCA:

21.4 (1) The Director may establish requirements,

(e) specifying whether and which returns, notices and other forms approved under section 21.3 and supporting documents must be signed, specifying requirements respecting their signing, and governing the form and format of signatures, including establishing rules respecting electronic signatures;

As noted earlier, the E-Commerce Act does contemplate that legislation will want things done differently than the general statute provides. The business law statutes are perfectly entitled to make different rules to suit their purposes.

But the E-Commerce Act also provides for regulations narrowing the methods by which e-signatures can be created. It also allows “public bodies” to impose “information technology standards” on e-signatures used on documents coming into government, as well as reliability requirements. (Section 17) These standards and requirements need not be regulations.

The presence of the specific provisions in the business law statutes that either spell out that the E-Commerce Act applies or give the Minister powers that the E-Commerce Act already gives to set conditions, creates a risk of suggesting that where the statutes are silent, or in other commercial practices, electronic signatures are not validated by the E-Commerce Act.

The risk of such an approach may arise in a ministry that has had its own definition of electronic signature since 1999, before the E-Commerce Act was passed – though not before the Uniform Electronic Commerce Act’s version was available. That definition reads:

“electronic signature” means an identifying mark or process that is,

(a) created or communicated using telephonic or electronic means,

(b) attached to or associated with a document or other information, and

(c) made or adopted by a person to associate the person with the document or other information, as the case may be.

It was just added in 2017 to the Corporations Information Act and other business statutes, so the ministry must like it. It seems unlikely that it produces a different result in practice than the definition of the Electronic Commerce Act.

This is not just a theoretical risk. A number of senior practitioners have wanted TOROG to qualify its opinion document on e-signatures to say that there are concerns about the legal validity of electronic signatures in areas governed by Ontario’s business statutes, if those statutes – not the Electronic Commerce Act – have not expressly validated them.

My own opinion is that the E-Commerce Act continues to apply to any legal requirement of Ontario law that is not expressly overridden or replaced. However, one understands the force of their argument that in statutes that have their own definition of electronic signature, the legislative impact of the general statute with a different definition (even if compatible) must be lessened and perhaps cancelled out.

In any event, the business statutes apply only to signatures described in them, and not to most signatures made in the course of commercial transactions. For the latter, more numerous, class, the law does not require a signature at all. And in any common law jurisdiction, a strong argument can be made – the one that persuaded the Law Commission in 2000 and again in 2018 – that the bare notion of “signature” includes an electronic signature. No statute need apply.

That said, it is unfortunate that by enacting what is no doubt intended to be helpful legislation, the Ontario government may undercut the confidence in electronic communications, and notably e-signatures, that the province set out to justify nearly 20 years ago.


Business habits and practices are hard to change. Solicitors are temperamentally prudent people. Prudence builds up with practice. We know what is prudent with ink and paper (though they are fallible too) because we have centuries of experience. With electronic communications, we have really only about 25 years, since the Internet was opened to commerce (though electronic data interchange raised these questions a decade earlier.) Moreover, electronic technology keeps changing and vulnerabilities keep appearing, or appear to appear.

Just as on paper, some e-signatures are more reliable than others. Government may want to help steer some uses to more reliable methods. Many parts of the world have much more prescriptive legislation on e-signatures than the main common law jurisdictions. The trend has been to relax the prescriptions for some purposes, but cautiously.

Those of us who think our law got it right at the turn of the century can still find it surprising if not frustrating to see the doubts described in this article still persist. The way forward turns out to be harder than anticipated, or the destination farther away.

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