Be it a scanned handwritten signature or a computer-generated one, any symbol and character is considered as an electronic signature as intended by the person signing the document, according to the Electronic Commerce Act (ECA) 2006. Despite the fact that electronic signature is legally recognised in Malaysia (except for a few scenarios stated in the Schedule of ECA 2006), it is not widely used in businesses where printing, signing, scanning, and emailing a document or meeting up for an official document signing is more commonly done. To clear the doubt on the usage of electronic signatures in businesses, here's why electronic signatures work better than traditional signatures.
Proven consent by signers
An electronic signature request is often accompanied by an email trail between two parties where the intention of the document signing is stated. This eliminates the possible fraud of one party signing the documents without knowing what he has gotten himself into.
Confirmed signer identity
Documents are sent to specific email addresses for electronic signing; hence, no one can sign on behalf of the other person unless permission is granted which would be recorded in the audit trail of the signed document.
To identify the authenticity of a handwritten signature, at least 10 or 20 signatures are required as samples, as suggested by Ordway Hilton in his book named Scientific Examination of Questioned Documents. Unlike traditional signatures, the audit trail tracks each action done on the document, from viewing to signing, according to timestamp and IP address in which the action was done. With this, we will be able to determine if the document is tampered with.
Since permission or login credentials are required to access the document whether for viewing or signing due to encryption, only the signers and persons-in-charge have access to the document.
Without the need for printing, in-person appointments for signing, scanning, and dispatching of a physical document, electronic signatures save a lot of time especially when a large number of documents are required to be processed regularly. Under ECA 2006, electronic signatures are applicable for the following documents:
- Non-disclosure agreement
- Employment letter
- Memorandum of understanding
- Partnership agreement
- Sale quotation and invoice
Accessible through email, signers do not have to travel just to spend a few minutes on signing the documents. This is very useful for signers who stay abroad. Although oversea postage is an option, it can easily take more than 2 weeks to send and receive the signed documents, with a risk of documents goning missing. There are many electronic signature provider platforms such as PandaDoc, DocuSign, and AdobeSign that charge a monthly fee for unlimited documents signed.
You may have come across the term 'digital signature' when exploring the option of electronic signatures. Governed under the Digital Signature Act 1997, a digital signature is a type of electronic signature where the signature is encrypted by an asymmetric cryptosystem, allowing for the signer's identity to be accurately determined through the signer's public key and for any alteration on the signed document to be detected. Even though digital signatures offer higher security, both electronic and digital signatures are legally recognised in commercial transactions and fulfilment of legal requirements without contradicting other laws and regulations in Malaysia.