Singapore law provides that an electronic record is any document “generated, communicated, received or stored by electronic means in an information system or for transmission from one information system to another“.
In effect, this implies that any data stored in electronic or digital form is an electronic record. Electronic records include emails, digital images, powerpoint presentations, websites, etc.
Thus, no document can be considered illegal just because it is in electronic form. The mere fact that information has been stored in electronic form can never be used to invalidate that information in any way. The Electronic Transactions Act gives legal validity to all electronic records, provided certain conditions are met:
1. First: If the information is durable and not transitory.
2. Second: A record must be signed
In order to facilitate electronic transactions, Singapore allows any person who wishes to do so to sign his or her contract electronically. An electronic signature, like a wet ink signature, is a record of a person’s intention or consent. This recording can take one of the following forms:
|➤ Pasting a scanned image of his or her handwritten signature|
|➤ Signing with a stylus or finger on a touch screen|
|➤ Checking a box or clicking "I agree" in an online form|
|➤ Selecting an option in electronic signature software|
The Electronic Transactions Act provides for the legal recognition of electronic contracts and gives full effect to these electronic signatures (and electronic records) establishing a regime that supports the digitization of business services.
Electronic signatures are most often executed by signing an electronic document. This can be done through software applications such as AdobeSign or Sleek Sign.
However, even if the electronic signature is validly recognized by the Electronic Transactions Act, any transaction requiring a signature can be legalized provided:
1. A reliable and appropriate method is used to identify the signer.
2. That the intent of the signatory is to perform the obligations contained in the document. In practice, this means that secure and legally binding electronic signatures can be validly affixed to all resolutions.
Among the best known, Sleek is one of the digital platforms that have developed advanced technological processes to streamline corporate secretarial procedures by automating “ready to sign” resolutions. These processes allow companies to save costs by using electronic signatures compared to traditional handwritten signatures.
In September 2016, the Singaporean government announced the introduction of CorpPass: a unique digital identity (with a unique entity number that is an identification number issued to an entity to conduct transactions with the government) that companies in Singapore can use for all interactions with the government. CorpPass ensures confidentiality in all business transactions. Entities such as joint ventures, trust funds, individuals, etc. that are not eligible to use CorpPass will continue to use their SingPass accounts to conduct transactions with the government.
On the one hand, Section 11 of the Electronic Transactions Act does not restrict contractual transactions and recognizes that a contract may generally be entered into by any means, electronic or otherwise, provided that the general requirements for establishing contractual relationships are met (such as offer, acceptance, etc.). This provision the general rules for the formation of a contract, also applying to electronic contracts, such as the offer and acceptance of a contract, the intention to create a legal and binding relationship between the parties, etc.
On the other hand, when you conclude the electronic contract you must be careful about:
The Electronic Transactions Act provides that the parties to a contract may exclude the use of electronic records, electronic communications, or electronic signatures in any contract by agreement and the parties may impose additional requirements on the form or authentication of the contract or transaction by agreement.
An electronic communication is sent either at the time it leaves the sender’s information system that is under its control or at the time it is received by the recipient. The time of receipt is the time when the receiver can retrieve the electronic communication.
A contract between an automated message system and a natural person or between any two automated message systems is considered valid. Validity cannot be denied merely because no natural person has reviewed the contract.
Since the amendment of the Evidence Act (Cap 97) in 1997, a party may use an electronic document as evidence in court.
The Electronic Transactions Act also provides for the development of procedures such as public key infrastructure (“PKI”) to facilitate the secure electronic transfer of information. These safeguards are essential to protect confidential business information. Indeed, a public key infrastructure (PKI) assists users in obtaining the necessary public keys. These public keys enable cryptographic operations, such as encryption and digital signature, which provide the following guarantees during electronic transactions:
1. Confidentiality: it guarantees that only the legitimate recipient (or possessor) of a block of data or a message can have an intelligible view of it.
2. Authentication: it guarantees to any recipient of a data block or a message or to any system to which a user tries to connect, the identity of the sender or the user in question.
3. Integrity: it guarantees that a data block or a message has not been altered, accidentally or intentionally.
4. Non-repudiation: it guarantees to anyone that the author of a data block or a message cannot disavow his or her work, i.e. claim not to be the author.
In addition, further procedures to simplify the use of electronic transmission by businesses are set out in the Singapore Companies Act (Chapter 50). In 2016, the Companies Act was amended to liberalize the transmission of notices and documents. A new provision, Section 387C, was implemented to allow for the electronic delivery of documents such as notices, accounts, balance sheets, financial statements and reports if the company’s constitution provides for this mode of delivery. Alternatively, the corporation may obtain the express consent of each shareholder to give effect to section 387C.