Technologically neutral, the ETL was established to promote public confidence in the validity, integrity and reliability of conducting transactions electronically and recognises electronic records as records created, stored, generated, received or communicated by electronic means.
The definition of an “electronic signature” under the ETL is deliberately broad:
“An electronic sound, symbol or process attached to or logically associated with the intent to sign the electronic record”.
Electronic signing typically involves either affixing an electronic signature to a document or using a digital signature application like DocuSign or eSign.
The common law adopts a pragmatic approach to what will satisfy a signature requirement. In determining whether the method of signature adopted demonstrates an authenticating intention the courts adopt an objective approach, considering all of the surrounding circumstances.
The ETL is not prescriptive as to the method of authentication protocol used. An electronic signature will be considered to be reliable where:
- the means of creating the electronic signature is linked to the signatory and to no other person;
- the means of creating the electronic signature was, at the time of signing, under the control of the signatory and of no other person; and
- any alteration to the electronic signature, made after the time of signing, is detectable.
Statutory and Other Exceptions to Electronic Signatures of Any Kind
There are important notable exceptions. Documents which cannot be signed electronically are:
- Wills and other testamentary instruments.
- Instruments which are required to be registered at the Cayman Islands Land Registry (including transfers of land, leases and charge instruments).
Electronic signatures should also not be used in Cayman where the requirements of a specific law, contract or an entity’s constitutional documents expressly provide (or may be interpreted to mean) that a hard copy document and wet ink signature are required. Certain governmental, judicial or regulatory authorities may also require a wet ink original. These exceptions should be considered on a case by case basis.
Different types of documents have different execution formalities. Before an electronic signature is used, care must always be taken to ensure that any particular document is validly executed in accordance with the relevant statute and the requirements specific to the entity in question (for example, a company’s constitutional documents may require that deeds be executed under seal, or be signed by two directors). Parties should also continue with the established practice of ensuring that the relevant signatory is duly authorised to sign and clear execution instructions are provided to signatories, as would be the case with ‘wet ink’ signing.
For further information please contact Caroline Barton or your usual Appleby contact.