1. INTRODUCTION
Electronic signatures have become a critical part of modern online transactions, offering a secure and efficient way to authenticate documents and agreements in the cyber space. They serve as a legal and functional substitute of handwritten signatures, ensuring that parties to a transaction can verify identities, validate documents, confirm consent, and uphold the integrity of agreements without being physically present. With the proliferation of e-commerce, digital banking, and other online services, electronic signatures have become an indispensable tool for achieving seamless digital interactions.
Before the advent of computers, a handwritten signature was the only universally acceptable way for individuals to verify their identity on paper-based documents and make it apparent that, they agree to be bound by whatever they are signing.1 Signing a document is an act of
will. Therefore, it is very important for the individual signing a document to have the assurance that he fully saw and understood what he is signing2 because after signing, the signer is usually held bound by whatever he signed.3This requirement of legal signature as a condition for the validity of certain acts in common law jurisdictions is traceable to the Statute of Frauds.4
With the onset of the electronic age and the rapid development of newer technologies, online security became more significant as security compromises are one of the major barriers to building users’ trust in electronic commercial transactions. Electronic signature made its appearance and has been considered an equivalent to traditional handwritten signatures or stamps,5and as a means of ensuring authenticity of electronic documents and security.6
The UNCITRAL Model Law on Electronic Signatures defines an ‘electronic signature’ more specifically as ‘data in electronic form in, affixed to or logically associated with a data message and to indicate the signatory’s approval of the information contained in the data message’.7 [1]
the same vein, The ECOWAS Supplementary Act on Electronic Transactions within ECOWAS defined electronic signature as, ‘any data emanating from the use of a reliable data procedure or identification procedure which guarantees its link with the act that is attached to’.8
In Nigeria, the legal recognition and use of electronic signatures is dependent on specific legislative frameworks designed to address the demands of an evolving digital economy.
However, despite the fact that digital signatures have the potential to improve convenience and security in the cyberspace, its widespread adoption and effectiveness in the country have been limited by certain barriers. The paper examines the role of electronic signatures in facilitating online transactions in Nigeria, the country’s legal stance on these signatures, and the challenges that may hinder their implementation and full effectiveness.
2. LEGAL BASIS OF ELECTRONIC SIGNATURES
The legal basis of electronic signatures refers to the regulatory framework and legal principles that allow electronic signatures to be considered valid and enforceable and to have the same legal standing as traditional handwritten signatures in legal and contractual matters. Electronic signatures are a digital way of signing documents, and for them to have legal effect, they must comply with specific laws or regulations that recognize and govern their use.
The legal basis for electronic signatures is established by a range of national and international laws that provide a framework for their use and recognition provided certain criteria are met. Therefore, it is necessary to pay careful attention to the legislation and regulations surrounding digital signatures in the jurisdictions in which the parties intend to exchange documents or contracts.9
a. INTERNATIONAL FRAMEWORKS AND ADOPTION
Nigeria is influenced by international frameworks governing electronic signatures. For instance, the UNCITRAL Model Law on Electronic Commerce, ECOWAS Supplementary Act
on Electronic Transactions within ECOWAS. Nigeria has adopted the principles of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce 1996, which promotes the legal equivalence of electronic and traditional methods of communication as well as the ECOWAS legislation. These provisions align Nigeria with global standards, fostering cross-border e-commerce and international trade.
1. United Nations Commission for International Trade Law Model Law on Electronic Signatures 2001 (UNCITRAL)
On 5 July 2001, UNCITRAL approved the Model Law on Electronic Signatures (hereinafter referred to as the Model Law). The Model Law applies to electronic signatures that are used in
the commercial sphere. The Model Law is intended to provide help, guidance and act as an instrument for nation states to use in forming legislation. While states are encouraged to incorporate the Model Law on Electronic Signatures fully into their domestic legislation, changes can be made to the content.10
The Model Law is not intended to interfere with the normal operation of the rules of private international law.11
b. ECOWAS
i. ECOWAS Supplementary Act on Electronic Transactions within ECOWAS.
At the 37th Session of the Authority of ECOWAS Heads of State and Government held in Abuja on 16 February 2010, the Heads of State and Government of the Economic Community of West African States (ECOWAS) adopted Supplementary Act A/SA.2/01/10 on Electronic Transactions (ECOWAS Electronic Transactions Act) as a regional legal regime to govern electronic transactions within the ECOWAS region, it applies notably to all transactions whatever their nature and which take the form of electronic message.12
The Act recognised electronic signatures as a means of authenticating electronic transaction.
In the Act, an ‘electronic signature’ is defined as, ‘any data emanating from the use of a reliable
data procedure or identification procedure which guarantees its link with the act that is attached to’.13 Under the Act, the use of electronic signatures is generally accepted for electronic transactions14 and the process through which an electronic signature has been created is presumed to be reliable unless there is evidence that proves the contrary.15 The Act equates an electronic signature with a handwritten signature. However, for such equal treatment to apply to an electronic signature, such a signature must have been created by a secure mechanism that is under the ‘exclusive control’ of the party making the signature, and the signature must have been based on a digital certificate.16
3. LEGAL BASIS OF ELECTRONIC SIGNATURES IN NIGERIA
In Nigeria, the primary legislation governing the use of electronic signatures is the Evidence Act 201117 and the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.18 These laws provide the foundation for the recognition and enforceability of electronic signatures in the country.
i. The Nigerian Evidence Act, 2011
The Nigerian Evidence Act, 2011, governs the admissibility of electronic records and e-signatures in Nigerian courts. This Act was amended to accommodate digital records and signatures, in line with international trends towards the recognition of electronic forms of documentation.
Section 84 of the Evidence Act, 2011 states that:
“The electronic signature of a person shall be as valid as the signature of that person, provided that the electronic signature is established by an adequate system to show that the signature is that of the person who it is said to be.”
This provision legally acknowledges the use of electronic signatures as valid forms of authentication in contracts and other legal transactions. Section 93(2) of the Evidence Act 2011 stipulates that electronic signatures are admissible in evidence, provided that their authenticity can be demonstrated. The Act recognizes electronic documents and digital signatures as legally valid, provided they meet the requirements of reliability and verifiability.19This reflects the legal recognition of electronic signatures as equivalent to handwritten signatures in the context of Nigerian law.20
In the case of Kubor v. Dickson (2013), Nigerian courts have also iterated the acceptance of electronic or computer-generated documents21 provided the conditions for admissibility are duly satisfied. While the Evidence Act is a good step taken by the Nigeria legislature, the Act however fails to define what constitutes an electronic signature, thereby leaving the court to decide on the bases of each case what amounts to an electronic signature. Also, the Act did not provide for the mode of proving electronic signature.22
ii. The Cybercrimes (Prohibition, Prevention, Etc.) Act, 2015
The Cybercrimes (Prohibition, Prevention, Etc.) Act, 2015 is another relevant piece of legislation in Nigeria that indirectly impacts the legal status of electronic signatures. While this Act primarily focuses on cybersecurity and cybercrime prevention, it also includes provisions that relate to the integrity of electronic transactions.
The Act reinforces the legal status of electronic signatures by outlining penalties for forgery, fraud, and unauthorized access to electronic systems. Section 17(1) of the Act defines an electronic signature as “data in electronic form affixed to or logically associated with an electronic message which may be used to identify the signatory.” This ensures that electronically signed documents carry the same legal weight as their physical counterparts, provided they comply with stipulated standards.23
Section 13 of the Cybercrimes Act addresses the falsification and alteration of electronic data, which may include tampering with electronic signatures. It also prescribes criminal penalties for fraudulent activities related to the use of electronic signatures in digital communications. Thus, while this Act does not directly address electronic signatures, it ensures that any electronic signature used in a transaction must be secure and free from fraud. It plays an essential role in establishing trust in electronic transactions, including those involving digital signatures.24
The Cybercrimes (Prohibition, Prevention, etc) Act 2015 provides in Section 17(1), with reference to electronic signature as follows: (a)Electronic signature in respect of purchases of goods, and any other transactions shall be binding.
Section 17(1) (b) presumed the genuineness of an electronic signature in favour of the signer and place a strict burden of proof on the person who contends the genuineness of an electronic signature. However, this does not solve the issue of proof of electronic signature because the provision is only concerned with who should prove and not how it should be done.
In addition, Section 17(2) specifies the nature of transactions that would not be valid if an electronic signature is used and they include wills, death certificate, birth certificate, matters of family law such as; marriage, divorce, cancellation or termination of utility services, etc. However, the Act also failed to define what amounts to electronic signature in Nigeria.
iii. The Electronic Transactions Bill
In 2020, the Nigerian government introduced the Electronic Transactions Bill, which aims to provide a comprehensive legal framework for electronic transactions, including the use of electronic signatures in various contexts such as banking, commerce, and government transactions. The Bill, once enacted into law, will further define the legal framework for the use of electronic signatures, broadening the scope of its application and reliability in Nigeria.25 The Model law is a good step taken by the United Nations Commission on International Trade towards the harmonization of laws relating to electronic signature in cross-border electronic commerce.
4. THE USE OF ELECTRONIC SIGNATURES IN COMMERCIAL TRANSACTIONS.
The use of electronic signatures (e-signatures) has revolutionized commercial transactions, providing an efficient, secure, and legally recognized method for signing agreements and so businesses both in Nigeria and worldwide have adopted e-signatures to streamline operations, reduce costs, and facilitate remote and global transactions. Some of the transactions includes;
- Legal and Regulatory Compliance: Electronic Signatures are comfortably used for Contracts and Agreements and also Businesses use e-signatures for legally binding contracts, including NDAs, employment agreements, and vendor contracts.
2. Banking and Financial Services: Loan Approvals make use of E-signatures, expedite loan agreements for financial institutions and also for Account Openings, Customers use e-signatures for digital onboarding.
3. Real Estate Lease and Rent Agreements: Landlords and tenants sign agreements digitally and Property Sales are done between Buyers and sellers who complete property transactions securely with e-signatures.
4. Government Services: The Federal Inland Revenue Service (FIRS) accepts e-signed tax documents and also Permits and Licenses applications for trade permits or business licenses often involve e-signatures.
5. E-Commerce: Order Confirmations: Online sellers use e-signatures for terms of sale and delivery confirmations and returns and refunds to customers digitally sign return or refund requests.
6. Procurement: Vendor Approvals: Businesses streamline supplier contracts with e-signatures and organizations use e-signatures to approve procurement orders.
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4. CONCLUSION
Flowing from the above, it can be deduced that electronic signatures play a significant role in the digital era. They enable efficient and cost-effective mode of business transactions.
Nigeria relies on several international and local instruments for the admissibility and enforcement of electronic evidence. There are however, several barriers that include inadequate awareness, inadequate security and digital illiteracy. These barriers can be overcome by cooperation of both local and international actors.
[1] Goodman v. J. Eban [1954] QBD 550 at 56 (per Lord Denning).
2V. Pau and L. Copaci, Digital Signature: Digital Protection Method (2016) 11
3 L’Estrange v F. Graucob Ltd [1934] 2 KB 394
4 Statute of Frauds 1677 (29 Car. II, c. 3), s 4.
5 F. Wang, Law of Electronic Commercial Transactions: Contemporary Issues in the EU, US and China (Oxford: Routledge, 2010), 77.
6 Ekhorutomwen Gabriel Ekhator ‘A Study of Electronic Signature and Its Legal Validity in Nigeria’ (2020) 1(1) Lawrit Student Journal of Law, 48.
7. ibid
8.. Wang, Law of Electronic Commercial Transactions: Contemporary Issues in the EU, US and China (Oxford: Routledge, 2010), 77.
9. Stephen Mason, Electronic Signatures in Law (4th edn)
10 UN Convention on the Use of Electronic Communications in International Contracts, 2005, Article 6.
11 Stephen Mason, Electronic Signatures in Law (4th edn)
12 ECOWAS Electronic Transactions Act 2010 Article 2.
13 ibid
15 Ibid 34(2)
17 UNCITRAL Model Law on Electronic Commerce, United Nations Commission on International Trade Law, 1996.
18European Union, Regulation (EU) No. 910/2014, eIDAS Regulation (2014), www.http//eur-lex.europa.eu.
19 Evidence Act 2011 (Nigeria), s 93(2).
20 Cybercrimes (Prohibition, Prevention, Etc.) Act 2015 (Nigeria), s 17(1).
21 Evidence Act 2011, LFN 2004 s 93(2).
22 Nigerian Evidence Act, 2011, Cap. E14, Laws of the Federation of Nigeria, 2011, Section 84.
23 Kubor v Dickson (2013) 4 NWLR (pt 1345) 534
24 Cybercrimes (Prohibition, Prevention, Etc.) Act, 2015, Cap. C50, Laws of the Federation of Nigeria, 2015, Section 13.
25 Electronic Transactions Bill (2020), Nigerian National Assembly, available at nass.gov.ng.
