Dangers in using and relying upon directors electronic signatures

Recently the New South Wales Court of Appeal considered whether a director was liable under a guarantee in a credit application where his electronic signature had been affixed to the guarantee without his knowledge.

The facts

In Williams Group Australia Pty Ltd v Crocker [2016] NSCWCA 265, a trade supplier sought to rely upon the personal guarantee of a director contained in a customer's credit application.

The credit application bore the electronic signatures of the customer's three directors as well as on the guarantee.

However, the director, Crocker argued that he was not liable under the guarantee because he had not placed his electronic signature on the guarantee and he had not authorised any person to place his electronic signature on the guarantee.