Legal Compliance

LEGAL COMPLIANCE

The coronavirus 2019 (COVID-19) pandemic caused wide-ranging transformation, with businesses being required to implement rapid changes to the way in which people worked, with moves towards remote/hybrid working spaces, and changes to the way in which businesses and their clients interacted with each other, from different physical locations using their mobile or internet-connected devices to meet in the same virtual room.

The team at dewly recognises that whilst this advent in technology and the digitalisation of commerce and normal working methods has its significant advantages, the overnight transition in the way that businesses contract with their clients and other businesses have opened up a massive risk to criminal opportunists taking advantage to profit from cybercrime and identity theft. It is for this reason that dewly has developed the most advanced manner for parties to contract with each other, from a distance, in a fast and trustworthy manner.

The way in which people historically contracted with each other by meeting in one location to place their physical signature on an identifiable document, in the presence of witnesses to confirm the signatories’ identities and their agreement to the document signed, is no longer feasible or possible in today’s fast-paced age. This has led to parties concluding contracts forwarded to each other by electronic communication for signature remotely, for electronic signature, which has led to both practical and serious legitimacy problems.

To understand the risk of loosely concluding contracts forwarded to each other by electronic communication, one needs to first understand the differences between a Signature, Electronic Signature, and a Digital Signature.

Signature:

The primary functions of a signature are to confirm the identity of a signatory, the intention of the signatory to sign; and the adoption of the writing signed by the signatory.

The American Bar Association (“ABA”) in its Guideline to Digital Signatures states that a signature is not part of the substance of a transaction but rather of its representation or form. It further states that the act of signing writings serves the following general purposes:

• Evidence – with the signature authenticating a writing by identifying the signatory with a signed document;
• Ceremony – with the act of signing calling the signatory’s attention to the legal significance of the signatory’s acts and preventing inconsiderate engagements;
• Approval – with the signature expressing the signatory’s approval or authorisation of the writing, or the signer’s intention that it has legal effect.

Electronic Signature:

The Electronic Communications and Transactions Act, Act 25 of 2002 (the “ECA Act”) defines an Electronic Signature as “data attached to, incorporated in, or logically associated with the other data and which is intended by the user to serve as a signature.”

The Uncitral Model Law on Electronic Signatures defines an Electronic Signature as “data in electronic form, affixed to or logically associated, to a data message, which may be used to identify the signatory in relation to the data message and to indicate the signatories’ approval of the information contained in the data message.”

Accordingly, an Electronic Signature does not facilitate strong evidence of the identity of a signatory, the protection of the integrity of the document signed, or that the document signed has been adopted by the signatory.

Digital Signature:

This is where the team at dewly have come to the rescue to design the most user-friendly application for a Digital Signature that provides irrefutable evidence of the identity of the signatory, protection of the integrity of the document, and confirmation that the signed document has been adopted by the signatory.

Thomas J Smedinghoff stated in his authoritative writing titled “Online Law” that:

“Digital signatures are one of the most promising information security measures available to satisfy the legal and business requirements of authenticity, integrity, non-reputability, and writing and signature.

To meet these requirements, however, digital signature technology must be supported by certain institutional and legal infrastructures as well as cryptographic measures…. A digital signature is an electronic substitute for a manual signature and serves the same functions as a manual signature and more.”