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21 May 2020
In light of the COVID-19 pandemic and with many people now working remotely, companies are increasingly considering the use of digital contracts and electronic signatures. To help minimise disruption and ensure business continuity, this article summarises the legal position in the Cayman Islands and provides practical advice on implementation.
The enforceability of digital contracts and electronic signatures is governed by the Electronic Transactions Law (2003 Revision) (ETL). In summary:
The ETL does not apply to any document or signature relating to the creation, execution, variation or revocation of a will or other testamentary instrument.
The ETL provides that, subject to any provision to the contrary, the following can be expressed electronically:
In addition, the legal effect or validity of statements and declarations is not affected solely because they are in electronic form.
Therefore, provided that the relevant documents meet the general requirements of a binding contract under Cayman law, the use of digital contracts does not affect their validity or enforceability. This may include using online portals to negotiate, amend, upload or transmit contractual documents.
Under the ETL, electronic signatures have the same legal effect as written signatures provided that they and the method of creating them:
An electronic signature is deemed 'reliable' if:
Under the ETL, any person relying on an electronic signature bears the legal consequences of a failure to take reasonable steps to verify its reliability.
The following practical considerations should be noted with respect to the use of and reliance on electronic signatures:
The Cayman Islands Monetary Authority (CIMA) recently issued public notices in relation to electronic signatures and certification or notarisation of documents. To date, CIMA has adopted the following measures to lessen any challenges that its licensees and registrants may face:
For further information on this topic please contact James Heinicke or Cornelia Zhu at Ogier by email (firstname.lastname@example.org or email@example.com). The Ogier website can be accessed at www.ogier.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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