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COVID-19 has created a rise in online communications such as video conferencing. The remote working environment and physical distancing regulations have made it challenging to execute documents properly, including situations when there is a requirement to have a witness physically present. In response to this, many state governments have introduced legislative changes to allow documents to have online witnesses. This article will unpack how contracts, affidavits and statutory declarations may be witnessed online in New South Wales (NSW).

Signing Contracts

There are various requirements for certain contracts to have a witness (including deeds and wills). However, there is no general requirement for all contracts to have a witness. In many cases, contracts will require a witness purely for evidentiary purpose. This means the witness will confirm that the correct person actually signed the contract. A contract with be valid and binding if:

  • there has been an offer and acceptance of that offer;
  • there is an intention to create legally binding relations;
  • the parties exchange values, e.g. money for a service (although this is not always a requirement, for example with deeds);
  • there is certainty around the terms of the contract; and
  • the parties have the capacity to enter into the contract.

E-Signatures

Most contracts can be executed electronically in Australia. To have a validly executed contract by way of e-signature, you must meet the following requirements:

  1. identification – you must be able to identify the person entering into a contract and their intention to be bound by the contract. This avoids the wrong person signing a contract and making it invalid. For example, errors could occur if a company director was meant to sign a document and another employee signed it on their behalf;
  2. reliability – the method you use to obtain the e-signature must be reliable in light of the circumstances. Many businesses choose to use digital signing platforms such as DocuSign, as these are generally reliable; and
  3. consent – the parties to the contract need to indicate they consent to the document receiving an electronic signature

There are some restrictions on when you may use e-signatures, including for:

  • deeds (in some states);
  • some registration documents, for example, documents lodged with Land Titles offices; and
  • court documents.

Given the ongoing updates and flexibility around these requirements during COVID-19, it is best to check what the requirements are before using an e-signature.

Requirements For Witnesses

In general, if a contract needs a witnessed, the witness must:

  • be 18 years old or over;
  • know the person that they are witnessing the signature for;
  • not be under the influence of drugs;
  • be of sound mind;
  • not be a party to the document or have any financial interest in it; and
  • not be a beneficiary if the document is a trust or self-managed superannuation fund.

Signing Affidavits

During legal proceedings, an affidavit is a written account of someone’s evidence or statement of facts. Affidavits are prepared before a trial and ensure each party is aware of what the other party’s witness will say at the trial.

An important part of giving evidence in an affidavit is having it witnessed. The witness’ role is to affirm that the contents of the affidavit are ‘true and correct in every particular’. For affidavits, the witness must be an ‘authorised witness’. An authorised witness may be:

  • court registrars;
  • lawyers;
  • justices of the peace;
  • police officers above the rank of sergeant; and
  • public notaries.

Signing Statutory Declarations

A statutory declaration is a statement of facts that you declare to be true. You usually use it in situations where there are no court proceedings, but some fact needs to be proved. Statutory declarations can be used for all sorts of reasons, including:

  • confirming your personal details;
  • to prove a change of name;
  • evidence for sick leave; and
  • financial matters.

Statutory declarations must have a proper witness, or they will be invalid. The requirement to have an ‘authorised witness’ also applies to statutory declarations. 

Witnessing Contracts, Affidavits and Statutory Declarations Online

The NSW government introduced changes to the law to allow documents to be witnessed online in response to the challenges COVID-19 presented. The changes allow for the witnessing of documents online during the pandemic by audiovisual link, including:

  • Zoom;
  • Microsoft Teams; and 
  • Skype.

This has made it substantially easier for people to witness contracts, affidavits and statutory declarations. However, if you would like to have a document witnessed online, it is still important to follow the new regulations to ensure that the document is a validly witnessed document.

Here, witnesses must:

  • watch the signatory sign the document in real-time;
  • sign a counterpart (a document that is exactly the same) of the document or a scanned copy of the signed document sent electronically by the signatory;
  • reasonably satisfy themselves that the document they are signing is the same document that the signatory is signing; and
  • endorse the document or a copy of the document with a statement specifying the method of witnessing and that the document was witnessed in accordance with the emergency COVID-19 regulations.

An example statement for witnessing a signature is:

This document was signed in counterpart and witnessed over audiovisual link in accordance with clause 2 of Schedule 1 to the Electronic Transactions Regulation 2017.”

The regulations only apply for a limited time, although the government has the power to extend the timing of the regulations. If the government does not repeal or extend the regulations, they will expire on 22 October 2020.

Key Takeaways

Changes to NSW regulations have made it easier for individuals to have documents witnessed remotely. This includes: 

  • contracts;
  • affidavits;
  • statutory declarations;
  • wills; and 
  • powers of attorney. 

It is important that if a document is witnessed online, that it is done properly and in accordance with the regulations so that the document is valid and enforceable. Given that the regulations are subject to change, you should double-check the regulations before using an online witness. If you have any concerns about executing contracts electronically or with a witness remotely, contact LegalVision’s experienced contract lawyers on 1300 544 755 or fill out the form on this page.

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