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Electronic contracts and signatures have become standard in business practices across several industries, sectors, and professions in recent times. It is a departure from the traditional mode of physically signing papers with ink, making it possible for individuals to sign and submit documents remotely.
Electronic signatures have recently been used for signing different documents such as agreements, contracts, and invoices. This is attributable to the fact that electronic signatures make everyday life easier and offer a modern way of confirming the signatory’s identity. Despite the many benefits of electronic signatures, it is essential to be aware of the limitation(s) of using electronic contracts and signatures in our daily operations.
LEGALITY OF ELECTRONIC CONTRACTS AND SIGNATURES IN NIGERIA
An electronic signature, sometimes referred to as an e-signature is the digital representation of an individual’s intention to authenticate or endorse a document, contract, or agreement.[i]
It may come in the form of manually typing one’s name in a designated field; signing an electronic document on a computer touchscreen with a stylus or finger; emailing a scanned copy of the signed executed page of the document; pasting a scanned signature; clicking an “I agree” button; using biometric authentication or using web-based platforms like DocuSign.
Under Nigerian law, there is no specific form for electronic signatures. However, Section 93(3) of the Evidence Act provides that an electronic signature may be proved in any manner, including by showing that a procedure existed by which it is necessary for a person, to proceed further with a transaction, to have executed a symbol or security procedure to verify that an electronic record is that of the person.
Section 93(2) of the Evidence Act 2011 further provides that where a rule of evidence requires a signature or provides for certain consequences if a document is not signed, an electronic signature satisfies that rule of law or avoids those consequences. Thus, irrespective of the form used to electronically sign a document, it would be valid under Nigerian law.
In addition, under section 17(1) of the Cybercrime Act 2015, electronic signatures are binding in purchases of goods and other commercial transactions. In a similar light, section 101 of the Companies and Allied Matters Act 2020 provides that an electronic signature satisfies the requirements for the signing of documents requiring authentication by a company.
Going by the above, electronic signatures are well recognized under Nigerian law and are valid for a wide range of transactions unless expressly excluded by law. The authenticity of an electronic signature and confirmation of approval by the person purporting to sign the document can be proved by evidence that such a person exists.[ii]
Section 17 (1) (b) of the Cybercrimes Act, 2015 provides in effect that when the authenticity or otherwise of an electronic signature is in question, the burden of proof is that the signature does not belong to the purported originator of such electronic signatures but shall be on the contender. It is important to note that forging the electronic signature of another person with the intent to defraud and or misrepresent is punishable by a term of imprisonment of not more than 7 years or a fine of not more than N10,000,000.00 or both fine and
imprisonment.
CHALLENGES & LIMITATIONS
Although electronic signatures offer numerous benefits, Nigerian Law excludes some contracts from being executed electronically. Section 17 (2) of the Cybercrime Act 2015 excludes the following categories of transactions or declarations from being validated by electronic signatures:
CONCLUSION
Under Nigerian law, a physically written signature is not necessarily required for a valid contract. Provided the essential elements of offer, acceptance, consideration, intention to create a legal relationship, and capacity to contract are all present, the contract would be binding and legally enforceable between parties even where authenticated by an electronic signature. This is because electronic signatures are recognized under Nigerian law.
[i] Convene, ‘What is Electronic Signature: The Benefits and Legality’ https://www.azeusconvene.com/articles/what-is-electronic-signature Accessed January 10, 2024
[ii] O. M. Atoyebi, ‘The Validity and Limitation of Electronic Signatures Under Nigerian Law’ https://omaplex.com.ng/the-validity-and-limitation-of-electronic-signatures-under-the-nigerian-law/ Accessed January 15, 2024
Written by Adeife Omolumo for The Trusted Advisors
Email us: info@cms.trustedadvisorslaw.com