ELECTRONIC SIGNATURES: A CATALYST FOR CONTEMPORARY COMMERCIAL TRANSACTIONS IN NIGERIA
Author: O. M. Atoyebi S.A.N FCIArb. (U.K.)., Contributor: Sogo Emmanuel
Marshall McLuhan once said “the world is a global village[1] [1]”, and this has been interpreted by many to mean the role technology has played in making basic dealings of life much easier than it should ordinarily be. This tremendous impact of technology has also flooded the very core of commercial transactions that involve the exchange of services, and/or completing business deals online. Electronic signature which is a by-product of technology has made the conduct of business easier by removing the clog that is associated with formalizing commercial transactions physically. Mind you, prior to this time, signatures could only be appended to documents physically.
Remarkably, the above account is not the plight of businesses anymore, as times have changed, and for that reason, we shall x-ray how this change came to be, its validity under the Laws of the Federal Republic of Nigeria, and how it has sharpened the rigid nature of contemporary commercial transactions in Nigeria and beyond.
UNDERSTANDING THE CONCEPTS; MEANING?
Before we delve into the crux of this discourse, it is sacrosanct to elucidate some key concepts that will form the basis of this legal voyage.
Signature
The Court of Appeal defined Signature in MICHMERAH INTL LTD v. NIGERIA INTL BANK LTD (2015)[2] [2]as thus:
“At Page 1415 Blacks Law Dictionary 8th Edition signature is defined as a person’s name or mark, written by that person or at the person’s direction, it is also any name, mark or writing used with the intention of authenticating a document.”
To put in perspective, an electronic signature has been defined thus:
“An electronic signature is an electronic indication of a person’s intent to agree to the content of a document or a set of data to which the signature relates. Like its handwritten counterpart in the offline world, an electronic signature is a legal concept capturing the signatory’s intent to be bound by the terms of the signed document.”[3] [3]
More so, electronic signature has been defined to mean;
“An e-signature (electronic signature) is a digital version of a traditional pen and ink signature.”[4] [4]
Commerce
This has been defined as follows:
“Commerce is the exchange of goods or services among two or more parties. It is the subset of business that focuses on the sale of finished or unfinished products rather than their sourcing, manufacturing, transportation, or marketing.[5] [5]”
ELECTRONIC SIGNATURES: THE GENESIS
The use of electronic signatures began in the wild east, but it officially became a thing when the United States of America enacted laws to accommodate the legal use of electronic signatures in 1999. The government particularly enacted the Uniform Electronic Transactions Act of 1999 which served as a pacesetter for other nations.
The US Government did not stop by enacting the aforementioned legislation, it also enacted Electronic Signatures in Global and National Commerce Act[6] [6] to accommodate the use of electronic signatures in commercial transactions.[7] [7]
As a result of this development, other nations followed suit by adopting and enacting laws to foster the use of electronic signatures in commercial transactions, especially as some transactions took place interstate.
THE VALIDITY OR OTHERWISE OF ELECTRONIC SIGNATURES IN NIGERIA
A cursory look at the sub-heading would reveal that there are two sides to the concept of electronic signature in Nigeria. We shall consider under this sub-heading whether Nigeria has joined other developed nations of the world to legalize the use of electronic signatures, and if it has done so, what are the limitations thereof?
It would interest you to know that the Nigerian Government is not lagging when it comes to this aspect of digitalizing commerce for business owners and investors alike. The use of electronic signature has been made lawful by virtue of Section Section 17(1) (a) of the Cybercrimes (Prohibition, Prevention etc) Act, 2015 which provides as thus:
“Electronic signature in respect of purchases of goods, and any other transactions shall be binding.”
The import of the above section is that electronic signatures are considered valid when used in commercial transactions. The section has also widened the scope of transactions and that electronic signature will be deemed valid and proper.
Notwithstanding the foregoing, it appears that the Cybercrimes Act has placed some embargos on the acceptability of electronic signatures with respect to certain transactions, as we shall see in the succeeding paragraph.
Section 17(2) of the Cybercrimes Act[8] [1] provides as follows:
“The following transactions shall be excluded from the categories of contractual transactions or declarations that are valid by virtue of electronic signature:
(a) Creation and execution of wills, codicils and or other testamentary documents.
(b) Death certificate.
(c) Birth certificate.
(d) Matters of family law such as marriage, divorce, adoption and other related issues.
(e) Issuance of court orders, notices, official court documents such as affidavits, pleadings, motions and other related judicial documents and instruments.
(f) Any cancellation or termination of utility services.
(g) Any instrument required to accompany any transportation or handling of dangerous materials either solid or liquid in nature”.
It is clearer now, more than ever, that electronic signatures are valid just as the ones crafted with ink on paper, even though they will not suffice in every instance.
HOW THE USE OF ELECTRONIC SIGNATURE HAS PROPELLED COMMERCIAL TRANSACTIONS IN NIGERIA
Recent studies have shown that more than 50 per cent of companies still spend Billions every year on paper just to carry out commercial transactions and this has largely affected the turnover of companies.[9] [2] Albeit, since the legalization of electronic signatures in Nigeria, companies need not spend so much on paper in a bid to seal commercial deals whether local or international. This has helped companies in saving well over 55 per cent cost[10] [3] of running their business.
Furthermore, the legalization of electronic signatures has improved the time turnaround for documents as commercial deals that will ordinarily take days to be completed, are now completed within hours. Business owners need not send documents to business partners physically to append their signatures. All of this rigour has been assuaged by the legalization of electronic signatures.
According to a recent report from BMO (Canada’s 4th largest Bank), the use of electronic signature has also improved workplace efficiency by 60 per cent.[11] [4]
CONCLUSION
It is therefore, the writers’ contention that owing to the totality of benefits that the use of electronic signature has brought to commercial transactions, it can be submitted that businesses have thrived better than in the days when the use of manual signature was predominant. Small companies can run their businesses with less capital and still perform efficiently due low cost of running the business.
Ultimately, companies can now seal deals with a plethora of business partners from any part of the world. This is an aspect of technology that all businesses need to exploit as the benefits are beyond measure.
[1] Stanley Fischer ‘Global Markets and the Global Village in the 21st Century: Are International Organizations Prepared for the Challenge?< https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp111999 [8]> Accessed last on 22nd October, 2022.
[2] LPELR-25768(CA)
[3] European Convention, ‘What is signature?’ <https://ec.europa.eu/digital-building-blocks/wikis/display/DIGITAL/What+is+eSignature’ Accessed last on 22nd October, 2022
[4] Karolina Kiwak, ‘Definition of e-signature’https://www.techtarget.com/searchcontentmanagement/definition/e-signature [9] Accessed last on 22nd October, 2022.
[5] James Chen, ‘Commerce: What It Is, How It Differs From Business and Trade’<https://www.investopedia.com/terms/c/commerce.asp> Accessed last on 21st October, 2022.
[6] (ESIGN) 2000.
[7] Karolin Koestler, ‘Electronic Signatures: A Brief History’< https://www.foxit.com/blog/the-history-of-electronic-signatures/ [10]> Accessed last on 22nd October, 2022.
[8] 2015
[9] Matt Peterson, ‘82 Percent of Companies Still Spending Billions on Paper’<https://www.corpmagazine.com/industry/technology/82-percent-companies-still-spending-billions-paper/ [11]> Accessed last on 22nd October, 2022.
[10] Signaturit Blog, ‘The electronic signature: how much money can businesses save with it?<https://blog.signaturit.com/en/how-much-money-do-companies-that-use-the-electronic-signature-save> Accessed last on 22nd October, 2022.
[11] Celent, ‘BMO: Digital Transformation in Personal Banking’<https://www.onespan.com/resources/celent-bmo-digital-transformation-personal-banking> Accessed last on 22nd October, 2022.