The risks of accepting electronic signatures on documents

Background

The recent decision of the NSW Court of Appeal in Williams Group Australia Pty Ltd v Crocker (handed down on 22 September) involved the common situation of a trading customer making a credit application to its supplier (Williams). The supplier required directors' guarantees and a guarantee document was attached to the credit application.

The directors of the customer had established an electronic signature system using "HelloFax". The particular director, Mr Crocker, lived and worked primarily in Brisbane, whereas the company's premises were in Murwillumbah.

The credit application (including the personal guarantee document) was returned to Williams with the electronic signatures of the directors attached, each of them having been purportedly witnessed by the customer's administration manager.