Are Electronic Signatures Legally Binding in Canada?

February 1, 2021

Over the past two decades, electronic signatures have grown in popularity with millions of people everywhere signing them each year. Electronic signatures provide a fast and secure signing process for any business, organization, department, or project that comes with organized, built-in convenience. The main purpose is to facilitate an individual’s intent to agree to something and securely document it in a way that is easily accessible when needed.

One of the most popular questions surrounding electronic signatures is whether they are considered a legally binding contract. In most cases, an electronic signature can create a legal and binding contract that is enforceable and is used widely in the corporate world as well as any type of small business or large organization. In many cases, it is considered more secure and protected than paper contracts. 

In this post, we’ll specifically review what makes an electronic signature legally binding in Canada and review if they are valid in all provinces (and elsewhere) so that you feel confident in moving forward with using electronic signatures. 

Are Electronic Signatures Legally Binding in Canada?

In Canada, electronic signatures have the same legal status as a handwritten signature. This has provided a way to simplify and expedite the way that businesses, organizations, and individuals track, manage, and approve signatures. The Personal Information Protection and Electronic Documents Act (PIPEDA) regulates, recognizes and enforces the legality of electronic signatures in Canada. The Uniform Electronic Transactions Act (UETA) is legislation to promote uniformity in electronic commerce. Quebec has a comparable law (CQLR c C-11) stating that “electronic signatures and documents have the same legal weight as their paper equivalent.” 

Are Legal Documents Able to Be Signed Electronically in Canada? 

In short, yes, legal documents are broadly enforceable for both business and personal transactions in Canada. There are many types of legally binding documents that can be signed electronically, including, but not limited to:

  • Contracts
  • Quotes
  • Proposals
  • Invoices
  • Medical releases
  • Settlements
  • Real estate property transactions
  • Non-disclosure agreements

There are some exceptions and additional legal requirements that may be required to enforce the types of electronic signatures above, particularly legal documents. When preparing to sign or have someone else sign an electronic signature, you should always reference the laws in your province to ensure that it will be legally binding. There are some particular circumstances where electronic signatures aren’t covered by PIPEDA. A few of these include:

  • Wills and codicils
  • Trusts created out of wills and codicils
  • Power of Attorney 
  • Divorce and adoption family law documents 
  • Some legally required disclosures to consumers 
  • Official court documents 
  • Promissory notes
  • Notarizations 

You should always seek legal advice as to where an electronic signature is allowed in your specific situation and determine if there are any specific requirements required to make it legally binding. 

Elements of a Legally Binding Electronic Signature in Canada

For an electronic signature to be considered legally binding under the PIPEDA, it’s highly recommended the document includes the following elements. 

1. Intent to Sign

It must be made clear that the signer has a clear intent to sign an electronic agreement. This can be done by typing their name on the document, drawing their signature, or clicking a clearly labeled “accept” button. 

2. Consent to Do Business Electronically

When doing business online and requiring an electronic signature, it’s required to complete a form of consent to show that you and the other partners are willing and able to do business electronically. It’s common for enterprise electronic signature solutions to ask the signer(s) to “click and accept” a stand consent clause or provide an option to customize the consent clause.

3. Opt-Out Clause

Clear instructions on how to sign an agreement manually should be easily accessible within the online agreement should a signer elect to opt-out of signing electronically. 

4. Record Retention

PIPEDA requires that in order for an electronic record to be considered legitimate, it must be accessible to the signer. Many times this is done by providing a fully executed copy directly to the signer or permitting the signer to download a copy of the agreement if they choose. 

Electronic Signatures vs. Digital Signatures: What Is the Difference? 

In Canada, an electronic signature and digital signature are the two primary types of electronic signatures. 

Electronic Signature: Indicates an acceptance of an agreement or record through an electronic process and is considered the most common type of electronic signature in Canada. Some of the most common electronic authentication methods include email, PIN number, corporate ID, or password protection. 

Digital Signature: This type of electronic signature using a digital certification from a trust service provider (TSP) is to authenticate a signer’s identity. It’s only issued when the identity of the signer is validated and they use a public key infrastructure (PKI) to associate a specific signer with a document confirming their identity. In many cases, the extra steps required for a digital signature are not required for most transactions. 

Are WaiverFile Electronic Signatures Legally Binding In Canada? 

WaiverFile ensures security and legality in every file. We make it easy to convert a file into a legally binding, signable document. You’ll be able to share it securely from any device within seconds. Our electronic signatures comply with all PIPEDA regulations. Every document we provide automatically generates and stores a complete, time-stamped history of when the document is viewed, sent elsewhere, signed, printed or when there is a refusal to sign. This allows you to provide proof that the signatures are considered legally binding. 

Disclaimer: The content on this site is not legal advice. No attorney-client relationship is established. To ensure your online consent form is legally binding based on your location, industry, and specific circumstances, consult a legal professional in your area.

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