Effective July 1, 2015 an amendment to the Electronic Commerce Act,
2000 makes it permissible for parties to use electronic
signatures to sign agreements of purchase and sale and other
documents that create or transfer an interest in land.
Lawyers who can still remember their first year contracts course
from law school will recall that oral contracts (and other forms of
non-written contracts) can nonetheless be enforceable contracts
– but the Statute of Frauds (which dates back to a
1677 English law) carves out an exemption to this general rule for
contracts which purport to transfer an interest in land. This was,
ostensibly, to prevent fraudsters alleging (and
"proving") an oral sale of land where none existed.
When Ontario's Electronic Commerce Act, 2000
("ECA") was introduced in 2000, it
allowed certain documents to be signed with electronic signatures.
However, documents that "create or transfer interests in land
and require registration to be effective against third
parties" were exempted from the modernization efforts and
still required handwritten signatures (see former s. 31(1)(4)).
Once again, over 300 years later, the concern was fraud.
The ECA was amended in 2013 to make it apply to such documents,
however the section was never declared in force. The question has
been raised whether electronic land transactions would be more
susceptible to real estate fraud than transactions based on paper.
It had been suggested that the risk of fraud might be reduced by
specifying the kind of electronic signature that could appear on
the basic sales document, the agreement of purchase and sale. As a
result, the amendment languished while the government considered
whether to make a regulation about e-signatures and if so, in what
Ultimately, as of July 1, 2015, the section prohibiting
electronic signatures on certain land documents was simply repealed
– no additional regulations were passed. The legislation now
simply provides (in s. 11(3)) that electronic signatures will be
effective only if at the "time the electronic signature is
made, (a) the electronic signature is reliable for the purpose of
identifying the person; and (b) the association of the electronic
signature with the relevant electronic document is
In other words, there are no explicit standards of reliability
or security for electronic signatures in the statute. Just as with
handwritten signatures, it is up to the person relying on them to
decide if they are sufficiently reliable.
Implications for Business
Ontario joins the ranks of Quebec, New Brunswick, Manitoba,
Newfoundland and Labrador, and Prince Edward Island, provinces
which have similar laws allowing electronic signatures in real
The use of electronic signatures is optional so those who prefer
ink to digital methods will not be forced into adopting the
technology. Banks and other organizations that routinely handle
documents purporting to transfer an interest in land (and are the
ones who will be seeking to enforce such documents against third
parties) will want to review their practices around such documents
if they anticipate moving to electronic signatures, and will want
to ensure they have adequate processes and procedures in place to
support reliability of electronic signatures.
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