The emergence of the COVID-19 (Coronavirus) pandemic has resulted in the implementation of social distancing measures and ‘work from home’ orders across various jurisdictions, including The Bahamas. In an effort to continue ‘business as usual’, individuals, as well as corporations have transitioned into the digital sphere, with the employment of e-business methods, including electronic communications, signatures and contracts. Accordingly, it is has now become increasingly important and indeed necessary to consider how to execute documents, in circumstances where traditional methods of execution are unavailable to signatories. This note discusses the position under Bahamian law respecting the electronic execution of documents.
Electronic signatures are valid and have been legally recognized in The Bahamas since 2003, pursuant to the Electronic Communications and Transactions Act (Ch.337A) (“E-Commerce Law”).
What constitutes an electronic signature?
Under the E-Commerce Law, an electronic signature includes any letters, characters, numbers, sound, process or symbols in electronic form attached to, or logically associated with information that is used by a signatory to indicate his intention to be bound by the content of that information.
Which method should I use to execute a document electronically?
The E-Commerce Law does not specifically prescribe a particular form or type of signature that must be used. However, irrespective of the specific method employed, the identity of the signatory and his intention to sign or otherwise adopt the information in the document must be ascertainable.
Will my electronic signature be legally binding?
An electronic signature is capable of being a legally valid and binding method of executing a document under the E-Commerce law, provided that:
- the signatory intends to sign or adopt and be bound by the information in the relevant document;
- all other execution formalities required by law are satisfied (e.g. witnessing or affixing of company seal); and
- there are no restrictions in relevant legislation, the document itself or the constitutive documents of the signatory (in the case of a company).
Excluded Matters
Electronic signatures are not permitted in the following instances:
- the creation, execution, amendment, variation or revocation of —
- a will or testamentary instrument; or
- a trust;
- the conveyance of real property or the transfer of any interest in real property;
- court orders or notices, or official court documents required to be executed in connection with court proceedings;
- enduring powers of attorney to the extent that they concern the financial affairs or personal care of an individual; and
- all other deeds, documents and writings which may be recorded with the Registry of Records, pursuant to Section 3 of the Registration of Records Act (Ch.187).
Important Considerations
Notwithstanding the permissibility of signing documents electronically under the E-Commerce Law, there are various factors which parties should consider prior to using electronic signatures, including but not limited to:
Autonomy of parties
The E-Commerce Law does not require any party to use or accept electronic signatures. For this reason, it is necessary to confirm the counterparty’s agreement to accept electronic signatures, and also include language to this effect in the document to be signed electronically.
Constitutive documents (in the case of a company)
A corporate entity must have the necessary corporate capacity and authority to execute documents electronically. Thus, it should be confirmed that the use of electronic signatures is not expressly excluded in the constitutive documents or board resolutions of the corporate entity.
Cross-border transactions
In instances where the governing law of a document is not Bahamian law or non-Bahamian parties are involved, the advice of local counsel should be sought to determine the execution formalities required to validate the document, and whether any issues may arise on enforcement due to signing the document electronically.
Further Information
GSO attorneys stand ready to advise you on the issues above or such other legal and business issues arising from COVID-19.
The information contained in the above note is for the general interest of our readers and should not be considered legal advice. Please consult a GSO attorney should you require legal advice concerning the E-Commerce Law and the use of electronic signatures.
Date: 20 April 2020
Author: Lakera McSweeney (lmcsweeney@gsolegal.com)