COVID-19, electronic transactions and the increasing use of electronic signatures


The COVID-19 global pandemic has resulted in the imposition of several restrictions including limitations on movement, direct contact with persons, social distancing among others. Amidst this is also the gradual implementation of the Government of Ghana policy on digital economy.

Thus we are in a time when more and more public institutions are changing their way of operating, opting for the filing and submission of documents in an electronic format while most companies have moved their business online, thus avoiding in-person meetings and travels.

Additionally, most companies are deploying their business continuity plans and includes personnel working remotely in order to comply with social distancing protocols. Arguably the most lasting effect or impact of COVID-19 on our lives is that we are now relying heavily on technology especially digital or electronic platforms to do our daily activities.

Abiding by the COVID-19 protocols has made obtaining handwritten “wet ink” signatures whether face-to-face or by scanning copies of signed documents for business transactions more difficult. This article examines the existing legal framework in Ghana in the light of the impact of these COVID-19 restrictions on business transactions in particular, the inability to execute material contracts and other documents with handwritten “wet ink” signatures and the use of e-signature in contracts generally. It must be noted that e-signatures are increasingly being adopted for various business transaction to enable easy signing of contracts, agreement, partnership among others in both in-country and cross border transactions.

The Electronic Transactions & Electronic signature regime in Ghana

The main legislation that governs electronic transaction between parties in Ghana is the Electronic Transaction Act, 2008 (Act 772). Section 23 of the Electronic Transactions Act provides that an agreement is valid even if it is was concluded partly or in whole through an electronic medium. Consequently, under Ghanaian law a valid and enforceable contract can be executed or completed between parties using an electronic medium. One key issue in electronic transactions is the execution of contracts or documents using e-signatures. Thus, section 10(1) of Electronic Transactions Act makes provision for the use of a digital signature in executing contracts or documents. A digital signature is defined in section 144 of the Act as a data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature.

Section 12 of the Electronic Transactions Act provides that “A person may sign an electronic record by affixing a personal digital signature or using any other recognised, secure and verifiable mode of signing agreed by the parties or recognised by the industry to be safe, reliable and acceptable”

Thus, parties to a contract are at liberty to make provision for the execution of their contracts by using e-signatures. Contracts that are executed by way of e-signatures have the same legal effect as those executed using handwritten signatures (Section 11 of Electronic Transactions Act). Businessowners can therefore execute contracts with their customers, partners, employees among others using e-signatures which is provided for under the Electronic Transactions Act. The said Act does not limit or restrict the means or method of creating and signing a document using e-signatures. As such parties to an electronic transaction can use any of the recognised e-signatures which includes the parties typing their name in an email or word document, pasting a digitised image of their handwritten signature, selecting an option in e-signing software( Adobe Sign & DocuSign), signing a soft copy of a document with a stylus or finger on a touchscreen, or using another form of biometric identification.

The Electronic Transaction Act requires that parties who adopt e-signature in executing their contracts or documents must take the necessary steps to ensure that the e-signature obtained is authentic. Thus section 10 (2) of the Act provides that a digital signature is deemed to be authentic if first the means of creating the digital signature is, within the context in which it is used, linked to the signatory and not to another person. Secondly, the means of creating the digital signature was, at the time of signing, under the control of the signatory and not another person without duress or undue influence.

Thirdly, an alteration to the digital signature, made after the time of signing, is detectable. Any person relying on an e-signature has the duty to ensure that the signature obtained is authentic. Therefore, parties to an electronic transaction must ensure that in executing their contracts and other documents using e-signatures these requirements are complied with accordingly.

Additionally, parties may enter into a contract using automated transactions via an electronic agent. Where an electronic agent is deployed the contracting party must ensure that all the terms of the contract are made known to and accessible to the other contracting party before signing. Failure to comply with this requirement may render the said contract unenforceable.

The Ministry of Communication was mandated under Section 143 of the Electronic Transaction Act to provide by way of legislative instrument Regulations to deal specifically with the modalities for e-signatures and its related matters. However, after several year of the Electronic Transactions Act being in operation the Ministry is yet to come out with a legislative instrument dealing with this subject matter. The absence of the Regulation does not necessarily invalidate the use of e-signatures in contracts in Ghana. In fact, the Electronic Transactions Act specifically provides for e-signatures. The absence of Regulation only means that there is no legislative specificity providing guidelines of the nature of e-signatures.

Comparing the Electronic Signature Regime in other Common Law Jurisdictions

In the absence of a legislative instrument dealing specifically with this area of electronic transactions the courts in Ghana will rely on legislations and cases of foreign jurisdictions which are of persuasive effect to deal with such subject matter. It therefore important to consider the laws and practices in some common law jurisdictions such as South Africa, United Kingdom (UK), Canada and United States (US) on the subject of e-signatures.

The South African legal regime relating to e-signatures is governed by the Electronic Communications and Transactions (ECT) Act, 2012(Act No. 25) the ECT Act define an e-signature in Chapter 1 as any data attached to, incorporated in. or logically associated with other data and which is intended by the user to serve as a signature. Section 13 of the ECT Act recognizes a variety of digital formats as an e-signature as long as they comply with the criteria of intention and relationship to the document.

In the case of Spring Forest Trading 599 CC v Wilberry (Pty) Ltd T/A Ecowash & Another 2015 (2) SA 118 (SCA), the South African Supreme Court of Appeal held that e-signatures were binding and that the parties had validly cancelled a contract by email signature in terms of a non-variation clause requiring any changes to the contract to be in writing and signed.

In UK, the subject matter of e-signature is dealt with in section 7 of Electronic Communications Act, 2000 which provides for the use of e-signature in executing documents. Thus, in UK e-signature can be used to finalized contracts and negotiations over the internet which has the same binding effect as a handwritten “wet ink” signature. The English courts has developed the law on this subject matter in a number of cases over the years. Two of such cases are Bassano v Toft & Ors and Neocleous v Rees. In Bassano v Toft & Ors [2014] EWHC 377 (QB) the High Court of England and Wales confirmed that credit agreements can be validly concluded by way of e-signature.

Also in Neocleous v Rees [2019] EWHC 2462 (Ch), the court found that an automatically generated email footer containing the name and contact details of the sender constituted a signature for the purposes of section 2(3) of the Law of Property (Miscellaneous Provisions) Act, 1989 which requires a written signature on a document disposing of an interest in land.  The court determined that an ‘ordinary person’ in today’s age would consider that what is produced when a person stores a name and contact details in the Microsoft Outlook ‘signature’ function, with the intent that it is automatically posted on the bottom of every email, constitutes a ‘signature’ for contract purposes. Thus, what is more important today is whether the purpose of adding the ‘signature’ is done with the intent of authenticating the content.

The legal regime on e-signatures in Canada is governed by the Personal Information Protection and Electronic Documents Act (PIPEDA) (S.C. 2000, c. 5) which is a federal legislation. This Act recognizes an e-signature to be as valid as a physical one and is similarly admissible in the court of law. On a provincial level the Electronic Information and Documents Act, 2000 (S.S. 2000) is a Saskatchewan legislation that recognizes the use of e-signature in executing contracts.

Thus, in Saskatchewan, the Court of Queen’s Bench upheld an electronic waiver as enforceable in Quilichini v Wilson’s Greenhouse, 2017 SKQB 10. The Court in its ruling stated that section 18 of The Electronic Information and Documents Act makes it clear that agreements to contractual terms can be made by touching or clicking on an appropriately designated icon or place on a computer screen. The court concluded that the plaintiff agreed to the terms in an electronic form after having had the opportunity to read the waiver and release on the screen.

The legal regime governing e-signatures in US can be found in two different legislations. In 2000, the U.S government passed the Electronic Signatures in Global and National Commerce Act (ESIGN) to facilitate the use of electronic records and e-signatures in interstate and foreign commerce by ensuring the validity and legal effect of contracts entered into electronically. Under this Act, an e-signature is given the same legal status as a handwritten signature in all 50 states where federal law applies.

In addition to the ESIGN Act, the Uniform Law Commission drafted the Uniform Electronic Transactions Act (UETA) in 1999 to provide a legal framework for e-signature use per state. These two legislations have been applied in various cases that have come before US federal and states courts.

In US the vast majority of e-signature cases, and in nearly all jurisdictions, a properly executed e-signature carries the same legal effect as a handwritten signature. For instance Forcelli v. Gelco Corp., N.Y. Slip Op. 05437, 2013 WL 3812103 (N.Y. App. Div. 2d, July 24, 2013)., the New York Supreme Court ruled that an email signature in a negotiation was legally binding as it showed intent from one of the parties to proceed with a contract.

The US District Court for Pennsyvania declared in Keller v. Pfizer, Inc., (2018) WL 5841865 (M.D. Pa. Nov. 8, 2018) that “Plaintiff’s argument that she should not be bound by the arbitration agreement simply because she did not sign a physical paper contract is as archaic today as the notion that James Joyce is unlawfully obscene”

Also, in the case of Alliant Credit Union v. Abrego No. 76669-4-1, (2018) Wash. App. LEXIS 2964 (Ct. App. Dec. 31, 2018), the Washington Court of Appeals affirmed a summary judgment for the plaintiff on a breach of contract claim over defendant’s default on a 2014 auto loan. Defendant made a series of allegations challenging the existence of a valid loan, including that the e-signature had somehow been forged.

The court highlighted the extensive authentication process employed by DocuSign, agreeing that no genuine issue of material fact exists as to the existence of an enforceable agreement. Further in the case of Obi v. Exeter Health Resources, Inc. WL2142498 (D.N.H. Ct. 2019), Plaintiff’s claim of forgery was rejected in light of the fact that she had reviewed and executed the documents from her DocuSign account, creating a binding and enforceable contract. Lastly the Connecticut Trial Court has held in case of Designs for Health, Inc. v. Miller 187 Conn. App. 1 (2019) that evidence that defendant had DocuSigned an agreement containing a forum selection clause was sufficient to establish the court’s personal jurisdiction over defendant.

In a number of common laws jurisdictions, the courts consider certain factors to determine the legality or otherwise of an e-signature. Thus, for an e-signature to be legally binding, it must meet the following requirements:

First is an Intent to sign, e-signatures are valid only if a user demonstrates a clear intent to sign. Second is the consent to do business electronically, the respective parties must either express or imply their consent to do business electronically. Third is a clear signature attribution, the context and circumstances under which the document was signed can indicate the attribution of an e-signature. Fourth, association of signature with the record, it is critical for e-signatures to be connected to the document being signed. Fifth, Record retention, e-signature records are valid as long as they accurately reflect the agreement and can be reproduced as required.

The current Ghanaian law does not limit parties right to choose the nature or kind of software they can use for their e-signatures. However, the above factors must be considered in choosing an appropriate means or software in executing contracts or documents by way of e-signatures. Parties must ensure that in adopting a software for e-signatures it takes into consideration the above-mentioned factors.

It is important to also mention that contracts executed using e-signatures can be executed in counterparts provided the contract makes provision for that. Also according to the Electronic Transaction Act, an offer, acceptance or payment of consideration for the formation of a contract, which is expressed in an electronic record is generally deemed to have been sent or dispatched at the time that the record entered the information processing system outside the control of the originator.

From the above analysis it can be concluded that in the absence of a legislative instrument regulating the use of e-signatures in Ghana parties may adopt e-signatures in executing contracts or documents.

However, a party relying on an e-signature must take steps to ensure that e-signature obtained is authentic and satisfies all the requirements laid down. Lastly, in spite of the exclusion of the application of the Electronic Transactions Act to some transactions under Section 4 of the Act, in the light of the recent development in the country and globally the courts in Ghana may be progressively inclined to accept contracts and documents concluded electronically in these areas.

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