Getting the Consent to Electronic Signatures
The Electronic Commerce Act has now been in place for over 2 and a half years, yet we still have issues concerning its use.
Originally, the Act banned electronic transactions which involved the conveyance of land. So, really it only applied to the “acceptance of an Offer”. The initial Offer itself and subsequent documents were fine. An “interest in land” was only “in play” in that one part of the negotiating process: the acceptance (which results in the contract).
For one reason or another, well before the 1 July 2015 date when the Amendment to the Act came into force, a good many people ignored the technical distinction. Essentially, what this meant was that transactions required a brief interval to bail out of electronic negotiating.
When it came time for acceptance, that document needed to be:
o In writing, or
o Hand delivered, or
o Fax delivered
An e-mail acceptance, was no acceptance at all.
Since 1 July 2015, an email acceptance is fine, it’s just as good as any other means.
The Electronic Commerce Act and Consent
Here is an excerpt from the Act:
"Use, etc., of electronic information or document not mandatory
3. (1) Nothing in this Act requires a person who uses, provides or accepts information or a document to use, provide or accept it in an electronic form without the person’s consent.
(2) Consent for the purpose of subsection (1) may be inferred from a person’s conduct if there are reasonable grounds to believe that the consent is genuine and is relevant to the information or document."
This means that no one is “forced” to accept or do business electronically unless they agree. But, consent will be “implied” from one’s conduct. In other words, a person will have to raise objection at the outset. They can’t go along with electronic negotiating and then all of a sudden say that they are not going to accept it. This would particularly apply to notices, waivers, and other kinds of documents related to a transaction.
We should address the issue of Consent, it must be:
o Genuine, and
How do you prove that?
Electronic Signature Consent
OREA has drafted the following clause.
“The parties hereto consent and agree to the use of electronic signature pursuant to the Electronic Commerce Act 2000, S.O. 2000, c17 as amended from time to time with respect to this Agreement and any other documents respecting this transaction.”
There is a specific authorization in the Listing Agreement and the Buyer Representation Agreement.
“14. ELECTRONIC COMMUNICATION: This Agreement and any agreements, notices or other communications contemplated thereby may be transmitted by means of electronic systems, in which case signatures shall be deemed to be original. The transmission of this Agreement by the Seller by electronic means shall be deemed to confirm the Seller has retained a true copy of the Agreement.
15. ELECTRONIC SIGNATURES: If this Agreement has been signed with an electronic signature the parties hereto consent and agree to the use of such electronic signature with respect to this Agreement pursuant to the Electronic Commerce Act 2000, S.O. 2000, c17 as amended from time to time.”
The exact same wording appears to two paragraphs of the Buyer Representation Agreement:
“10. ELECTRONIC COMMUNICATION: This Agreement and any agreements, notices or other communications contemplated thereby may be transmitted by means of electronic systems, in which case signatures shall be deemed to be original. The transmission of this Agreement by the Buyer by electronic means shall be deemed to confirm the Buyer has retained a true copy of the Agreement.
11. ELECTRONIC SIGNATURES: If this Agreement has been signed with an electronic signature the parties hereto consent and agree to the use of such electronic signature with respect to this Agreement pursuant to the Electronic Commerce Act 2000, S.O. 2000, c17 as amended from time to time.”
Application of the Written Consent
It is noteworthy that the electronic authorization applies between the Brokerage and the Seller for the listing and between the Brokerage and the Buyer on the buy side.
It says nothing about either client agreeing to use electronic negotiating or digital signatures in an impending transaction with a third party.
The Agreement of Purchase and Sale
This is the wording in the Agreement in the paragraph dealing with “Notices” (paragraph 3):
“Any notice relating hereto or provided for herein shall be in writing. In addition to any provision contained herein and in any Schedule hereto, this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, “Document”) shall be deemed given and received when delivered personally or hand delivered to the Address for Service provided in the Acknowledgement below, or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively, in which case, the signature(s) of the party (parties) shall be deemed to be original.”
The reference is a little less specific but probably good enough in the Notice section under the Agreement of Purchase and Sale. Consent under the Electronic Commerce Act will be implied from one’s conduct, so no actual consent really need be referenced.
It would certainly seem that this reference is intended to deal with both electronic negotiating and digital signatures. The wording predated the current wording now found in the Listing Agreement and the Buyer Representation Agreement. That’s somewhat peculiar. Consistency would be preferred.
Multiple Offers and the Outstanding Risk
This still leaves the Offer itself open. The Seller doesn’t consent in advance, so, the Seller or the Seller’s representatives may choose to exclude a particular Buyer with a digital signature in a multiple offer situation. In this case, you would have to get the Seller to consent in advance. Here, including the clause in the Offer would be too late.
Brian Madigan LL.B., Broker