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The Electronic Transactions Act 2002 (the Act) helps businesses, individuals, and the government to manage commercial transactions electronically. It gives certain electronic information the same legal status as paper-based information. In 2017, the Contract and Commercial Law Act 2017 replaced the Act, with minor changes. In this article, we will cover some of the key provisions of the Electronic Transactions Act.

Legal Status of Electronic Information

Under the Act, certain electronic information and communications are now valid. Specifically, you can generally meet a requirement by electronic means when there is a legal need for the information:

  • to be in writing;
  • to be given in writing; or
  • recorded in writing

This is significant because it allows individuals, businesses and the New Zealand Government to exchange and accept information online.

What Electronic Transactions are Acceptable?

Some examples of information and mediums that qualify for electronic exchange under the Act include:

  • making applications for drivers licenses and permits online;
  • providing government decisions via email. For example, documents under a freedom of information request;
  • accepting business terms and conditions online; and
  • agreeing to amend a contract by email.

What Electronic Transactions are Not Acceptable?

In certain circumstances, you cannot provide documentation and information electronically. For example, there are some key legal documents that are only valid on paper format. These include:

  • most court documents, which you have to submit in person to the court;
  • cheques, which you have to provide in physical format; and 
  • wills and powers of attorney

Besides, if you agree in a contract to accept, vary or amend it by paper only, then you cannot make any electronic variations or amendments to it later. Likewise, you cannot accept the contract electronically.

Overall, you can exchange most communications, information and documentation by electronic means. However, there are a few exceptions under the Act, including:

  • key legal documents; or
  • contracts that specify the preferred format.

When Are Electronic Signatures Valid?

If your document qualifies for electronic exchange, then you can sign it online. However, your signature must meet certain criteria. For example, you must be clearly identifiable as the person signing the document. Further, there must be some indication that you approve of the information you are signing. Lastly, your electronic signature must be appropriate for the purpose and the circumstances. 

An electronic signature is reliable if it meets these four requirements. For example, if you are the person signing the document:

  • the signature belongs to you; 
  • you are the only person that can create it; and
  • if you make any changes to the signature or related information after signing, these are noticeable.

You can only sign certain types of contracts in person. For example:

  • contracts for the sale of land;
  • wills and powers of attorney; and
  • legal documents and contracts, if you agree with the other party that an electronic signature is not acceptable. 

Rules for Electronic Communications

When you send and receive electronic communications, such as emails or faxes, you may have to follow certain rules under the Act. These rules are useful in certain situations, such as:

  • determining the exact time you entered into a contract with another party; or
  • the time that a piece of information was provided. 

For example, an electronic communication is dispatched when:

  • it first enters an information system;
  • as long as it is outside the control of the sender.

Likewise, it is received when:

  • it first enters an information system inside the control of the recipient; or
  • when it comes to the attention of the recipient. 

Key Takeaways

The Electronic Transactions Act 2002, now contained in the Contract and Commercial Law Act 2017, contains important provisions. These provide:

  • electronic information with the same legal status as paper based information;
  • set out rules for sending and receiving electronic communications; and 
  • specify requirements for electronic signatures. 

LegalVision’s New Zealand technology lawyers can assist you in understanding your obligations and rights when dealing with electronic communications and contracts. Call 0800 005 570 to speak to a member of the LegalVision team or complete the form on this page.

Is electronic information still legally binding?

Typically, information remains legally binding if it is in electronic form or is an electronic communication. However, there are certain types of information that cannot be provided electronically.

What documents can I provide on paper?

The New Zealand Information Privacy Principles (IPPs) are a set of 12 guiding principles that govern how personal information should be collected, used and disclosed. The IPPs cover many issues such as an individual’s rights of access to personal information held about them and it sets out the types of matters that an individual should be notified about before they provide their personal information to an agency.

What information can I exchange electronically?

Most information can now be exchanged electronically. Some examples of information that can be electronically exchanged include drivers license and permit applications, government decisions (freedom of information requests), business terms and conditions and contract amendments.

Is an electronic signature reliable?

An electronic signature will be reliable if it can only be connected to the person who is signing, and if that person has sole control of the method used to create the signature. Additionally, the signature will be reliable if any alterations made after the time of signing or any change to the information that the signature relates to can be detected.

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