By Peng Ya King&Wood Mallesons’ Dispute Resolution Group

peng_yaThe essential feature of electronic signatures is digital certification technology. Any technique that can verify one party’s identity and recognize electronic data in the course of electronic communications falls within the category of electronic signature. Electronic signatures have become widely used to secure financial transactions which are increasingly undertaken online over the internet. When disputes arise over an online financial transaction, the legal effect of an electronic signature in an electronic contract or document becomes a key preliminary issue.

1. The legal effect of an electronic signature

The validity of an electronic signature is essential because of the importance of being able to confirm (a) the party to whom the electronic signature belongs and (b) the actual documents recognized by the signatory. In other words, the court needs to be able to rely on the electronic signature to verify both the identity of the signatory to the contract (who signs this electronic document) and to determine whether that party has recognized the contents of the electronic document as evidence of the true intention of the contracting parties. The verification of these features is a vital foundation to a court deciding on the facts in a dispute as well as to deciding rights and duties.

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