Are electronic signatures legally binding in Alberta?
In Alberta, electronic signatures are governed by the Electronic Transactions Act (Alberta) (“ETA”). Unless a document is one of those documents specifically excluded from the ETA, documents can be signed electronically in Alberta. Those documents excluded from the ETA are:
wills and codicils;
trusts created by wills or codicils;
enduring powers of attorney under the Powers of Attorney Act;
personal directives under the Personal Directives Act;
records that create or transfer interests in land, including interests in mines and minerals;
guarantees under the Guarantees Acknowledgment Act; and
The term electronic signature is defined as "electronic information that a person creates or adopts in order to sign a record and that is in, attached to or associated with the record". An electronic signature can include a typed name at the end of an email, a digital image of a handwritten signature or the click of an ‘I accept’ button on a website. The ETA does not prescribe any specific form of electronic signature and allows for a broad range of methods to electronically sign a document.
Pursuant to section 16 of the ETA, records may be signed electronically:
Legal requirement that record be signed
16(1) Subject to subsection (2) and section 22, a legal requirement that a record be signed is satisfied by an electronic signature.
(2) If a record is prescribed for the purposes of this subsection or belongs to a class prescribed for those purposes, the legal requirement that the record be signed is satisfied by an electronic signature only if in light of all the circumstances
the electronic signature is reliable for the purpose of identifying the person, and
the association of the electronic signature with the relevant record is reliable for the purpose for which the record was created.
Section 16(1) allows for most documents to be signed with an electronic signature. Section 16(2) stipulates that certain documents may only be signed electronically if a higher level of security and verification is provided by the electronic signature method. However, section 16(2) only applies to prescribed documents. Currently, there are no prescribed records requiring this higher level of security and verification. As a result, Alberta law only requires a basic electronic signature - be it an emailed scan of an original signature, the click of an “I Accept” button, or a typed name at the end of an email - for most documents. However, additional security measures may be valuable in situations where there is a risk of fraud connected to the use of a basic electronic signature.
Intent is also required when a client signs a document - the client must have intended to execute the document and create a legally binding obligation. Therefore, it is always good practice to include electronic execution language in your documents to ensure that the parties have consented to electronic signatures, confirming their intention to create a legally binding document. For example, you could include a provision in your agreement that states that “this contract may be executed and delivered electronically.” You could also go further and state that “the parties agree that electronic signatures are the legal equivalent to written signatures and that electronic signatures will have the same legally binding effect as a manually signed and delivered paper copy of this document.” The ETA does not require this language but this language provides greater certainty of intention of the parties to create a legally binding obligation and also protects against accusations of fraud.
This certainty of intent comes into play on larger deals. During large deals, clients are usually emailed signature page packages without the actual documents attached, in order to not annoy the client with 100s of pages in PDF form. Clients then print, sign, scan and email all those signature pages back to the lawyer (hopefully in the correct order). Therefore, clients don’t usually see the full document they are executing when they are actually signing the signature page. Of course, the client has been a part of the drafting process and knows the content of the documents and has signed off on all final versions. However, it is always best to employ a transaction process that makes clear that your client intended to execute each document and create a legally binding obligation. This knowledge is especially necessary if your client only signed a signature page without the benefit of having the full document in front of them.