The COVID-19 outbreak has caused extreme disruption to livelihood and society. Businesses and offices around the world have been forced to work remotely as governments adopt measures such as city lockdowns and movement restrictions. As a result, some persons may be unable or unwilling to use wet-ink signatures to enter into deals and transactions. Where this proves to be the case, we have highlighted below a few things to consider:
1. Nigerian law (See Section 93(2) of the Evidence Act 2011 and Section 17 of the Cybercrimes (Prohibition, Prevention Etc.) Act 2015) generally recognizes the use of electronic signature in contracts and regards the same as a binding. However certain transactions cannot be valid by virtue of electronic signature e.g. creation and execution of wills, codicils and other testamentary documents; death certificate; and matters of family such as marriage, divorce and adoption. It is important therefore to ensure that a transaction can be entered into by electronic signature where the same is considered.
2. When considering whether a document has been validly executed on behalf of a company based on an electronic signature, directors should also look to the company’s constitutional documents (particularly its Articles of Association). While it is not uncommon for a company’s constitutional documents to remain silent on the issue of electronic signature, it remains advisable to review a company's articles before arranging for electronic execution. This is to ensure that the constitutional documents do not expressly prevent the use of electronic signatures or require the execution of documents in person.
3. Some companies, in the interest of certainty, may consider expressly authorizing the execution of documents electronically through a board resolution.
4. In view of the fact that the Evidence Act stipulates that electronic signature may be proved in any manner (including by showing that a procedure existed which required a person to execute a symbol or security procedure) it may be prudent for signatories to a contract to include a clause defining what the procedure for signing by ‘electronic signature’ will be for the purpose of execution, amendment or modification of that contract or agreement.
The practical advice provided above (which is by no means exhaustive) and the use of electronic signatures must be analyzed on a case-by-case basis, preferably by your trusted legal adviser.
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