The times they are a-changing!! Conveyancing is continuously evolving with changes to legislation and technology happening at great speed. One of those changes is the electronic exchange of Contracts which has been introduced to make the exchange process easier and more efficient. Contracts will no longer need to be signed by putting pen to paper and, provided you have access to the internet, you will be able to sign a Contract electronically enabling an electronic exchange to take place. What is a valid Contract? In order for a contract to be valid there must be:
- An intention to enter into a Contract.
- An offer made and the acceptance of that offer.
- Consideration – ie payment in the form of a deposit.
In addition to the requirements of a paper contract an electronic contract is legally valid if:
- The contract is stored and can be accessed after it has been signed.
- The parties have given their express or implied consent to receive information electronically.
What is an electronic signature? Simply, it is a signature which can be used on an electronic document or transmission. Electronic signatures are recognised both under Australian and international law. The parties to the Contract can sign using an electronic device such as a smart phone, tablet or computer, either with a mouse or a stylus, or can adopt a standard computer generated signature. How can the party’s signature be verified? Similarly to a paper contract, unless you see the person sign in front of you, you cannot be sure if it is their signature. There is argument that an electronic signature is more secure than a paper signature as it is coded with information such as the GPS location and IP address of where you signed. How does an electronic exchange take place? There are 4 easy steps to follow when exchanging Contracts electronically:
- The vendor’s solicitor prepares the contract.
- The contract will then be uploaded to a secure dashboard.
- A secured link to the contract will then be emailed to both the vendor and the purchaser by the vendor’s solicitor requesting that both parties sign the contract.
- Once all parties have signed, the vendor’s solicitor (or the agent) exchanges the contract by dating it.
Each party will then be emailed a copy of the electronic contract signed by all parties. How do you stamp an electronic Contract? The purchaser’ solicitor is required to stamp under Electronic Duties Return (EDR) as they would a non-electronic Contract but a hard copy of the Contract is not required to be physically stamped as no original exists. What Happens Next? The process that happens between exchange and settlement has not changed but we are now seeing more and more settlements being conducted electronically.