Contract signed via DocuSign: three points to remember from a recent Court of Quebec decision

The use of electronic signatures is growing steadily and has become part of our daily business. This growth has only been accelerated by the pandemic context in which we continue to assist our customers with their remote transactions. As a result, we have closed contracts with customers all over the world. Aside from its undeniable convenience, it’s important to question the validity of a contract signed electronically – is it a secure process, and what are the risks involved?

Bennington Financial Corp. v. Dufour

On September 29, 2022, in Bennington Financial Corp. v. Dufour[1] (hereinafter the “Decision”), the Court of Quebec (the “Court”) recognized the validity of a contract signed via the DocuSign platform. The plaintiff, Bennington Financial Corp. (the “Plaintiff”), claimed from the defendant, Mr. Claude Dufour (the “Defendant”), the enforcement of a surety bond contract signed via DocuSign[2]. The Defendant, on the other hand, claimed, among other things, that there was a defect in consent and that the contract was invalid[3]. In this case, the Court unequivocally recognized the validity of the electronically signed bonding contract. In the words of Mr. Justice Henri Richard: “The documents transmitted via the DocuSign platform leave no doubt as to their integrity and signatures […]”.[4]. This decision serves as an interesting illustration of the use of electronic signatures in Quebec contract law. A number of salient points emerge from this decision, which will be discussed below.

  1. In principle, electronic signatures are permitted

With the exceptions discussed below, a contract may be signed by technological means. Article 2827 of the Civil Code of Québec[5] (“CcQ”) broadly defines signature as follows:

“The signature consists in the affixing by a person to a deed of his or her name or a mark that is personal to him or her and that he or she uses routinely, to manifest his or her consent.” [nos soulignés]

For example, a signature need not be handwritten.[6]. Moreover, electronically signed contracts are governed by the Act to establish a Legal framework for information technology (the “LFIT Act”)[7]. One of the objectives of the LFIT Act is to achieve functional equivalence of the legal value of documents, regardless of the media used.[8]. It does not provide for the use of specific platforms for electronic signatures, but rather establishes criteria to ensure the legal value and integrity of documents signed by technological means. In the Decision before us, the Tribunal recognized the legal validity of electronic contracts, basing itself on articles 2837 to 2840 of the CcQ and also on the LFIT Act[9].

  1. The integrity of the electronic contract must be ensured

The integrity of the electronically signed contract must be ensured so that it has the same legal value as a handwritten contract.[10]. Plus précisément, il doit être possible de vérifier qu’il n’a pas été modifié après sa signature, qu’il est intégral et que le support technologique utilisé assure sa stabilité et pérennité [11]. À titre d’exemples, les plateformes DocuSign et ConsignO Cloud – Notarius permettent la vérification de ces éléments par la production de certificat d’authenticité et de journal d’audit. Afin de faciliter la preuve des contrats signés électroniquement, l’article 2840 CcQ prévoit une présomption simple d’intégrité du support technologique employé. Ainsi, il incombe à celui qui conteste la validité du support technologique utilisé de démontrer par preuve prépondérante qu’il y a eu atteinte à l’intégrité du contrat

[12]. Par ailleurs, si le moyen technologique utilisé n’assure pas l’intégrité du document, ce document peut tout de même servir comme commencement de preuve à titre d’élément matériel et/ou de témoignage

[13]. En l’occurrence, la Demanderesse a produit un « certificate of completion » provenant de la plateforme DocuSign démontrant que le Défendeur a reçu, consulté et signé le contrat de cautionnement

[14]. Ce certificat a ultimement servi à assurer l’intégrité du contrat, et le Défendeur n’a pas prouvé qu’il y avait eu atteinte à celle-ci. Le Tribunal a, de plus, conclu que le fait que le cautionnement ait été signé par différentes personnes à la même adresse IP ne remet pas en cause son intégrité [15].

  1. The facts surrounding electronic signatures are relevant

Like a contract signed in ink, the facts surrounding the electronic signature can also carry weight in the assessment of the evidence. In our case, the Tribunal retained several facts that helped demonstrate that the Defendant had indeed consented to the bonding contract. In particular, the Defendant transmitted his personal information to the Plaintiff, signed a credit check authorization request, and acknowledged via e-mail communications that he had received and signed the contract.

[16]. Le Tribunal a également ajouté qu’il aurait été incongru de conclure à l’invalidité du contrat puisque le Défendeur a admis avoir reçu les équipements faisant l’objet d’un contrat et avoir effectué des paiements pour ceux-ci dans le passé [17].

Beware of exceptions

The law provides for exceptions where electronic signatures are either prohibited or modulated. This applies in particular to authentic instruments signed before a notary, which currently benefit from a special government authorization allowing them to be signed on a technological medium. [18]. Ceux-ci doivent obligatoirement être signés via la plateforme ConsignO Cloud Notarius et doivent respecter les procédures édictées par la Chambre des notaires du Québec. Il est également possible que l’utilisation de la signature électronique soit refusée ou limitée par une des parties contractantes, et qu’une signature manuscrite soit demandée. Il s’agit parfois d’une exigence de prêteurs hypothécaires quant à la signature de documents de financement. Finalement, le fait de signer un document électroniquement ne soustrait pas le juriste de son obligation de vérifier l’identité, la qualité et la capacité du signataire lorsque la loi ou une convention l’exige. Les notaires, par exemple, doivent continuer d’exercer une grande vigilance lors de la signature d’actes authentiques sur support technologique, notamment pour mitiger les risques de fraude, de vol d’identité, d’incapacité, et de coercion

[19].

Conclusion

In conclusion, the electronic signature is valid and secure insofar as it is permitted by law and when secure media and technologies are used. It is therefore important to check with your legal advisor whether legislation, regulations and/or the particular circumstances of your situation allow you to sign a document by technological means. By Mélissa Dion


[1] Bennington Financial Corp. v. Dufour 2022 QCCQ 6420 [2] Id. at paragraph 1. [3] Id. at paragraph 2.

[4] Id, paragraph 18 [5] Civil Code of Quebec (chapter CCQ-1991) [6] Article 39 Act to establish a legal framework for information technology (chapter C-1.1). [7] Article 2837 CcQ [8] Section 1, paragraph 3 LFIT Act [9] Bennington Financial Corp.

c. Dufour, paragraphs 16 and 17.

[10] Article 2838 CcQ

[11] Article 2839 CcQ and article 6 LCCJTI.

[12] Article 2840 CcQ

[13] Articles 2839 paragraph 2 and 2865 CcQ and article 5 paragraph 3 LCCJTI

[14] Bennington Financial Corp. v. Dufour, paragraph 14.

[15] Id, paragraph 20.

[16] Id, paragraphs 19 and 22.

[17] Id, paragraph 23.

[18] Order number 4841 of the Minister of Justice dated August 24, 2022, adopted pursuant to section 5.1 of the Act respecting the Ministère de la Justice (chapter M-19)

[19] Article 43 paragraph 1 Notarial Act (chapter N-3)

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