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Signing Domestic Building contracts

Can you sign your contracts with an electronic signature? Do witnesses to a contract need to observe all parties signing together? Can interstate clients sign their contract and fax or email it back to you? If these queries are common to your business, read on and be sure to get the right answers to your questions!

Electronic signatures

Many commercial transactions do not require a signature at all. However the building industry is unique.

For instance, under Schedule 1B of the Queensland Building and Construction Commission Act 1991 (the QBCC Act) not only must a building contract with a purchase price of $3,300 or more be in written form, it also must be signed by the building contractor and building owner (or their authorised agents). However, with the increased use of online and electronic transactions, many businesses are looking to alternatives and value the efficiency associated with electronic signatures. 

An electronic signature is any method which applies a “signature” to an electronic message. This may range from a specially designed “digital” signature, inserting an image of a handwritten signature or even simply the typed name of the sender.

Fortunately, the use of electronic signatures is provided for under the Electronic Transactions (Queensland) Act 2001 (the ETA), which states that if a person’s signature is required by a State law (such as the QBCC Act) the requirement is met by using an electronic signature provided the method is reliable and appropriate in the circumstances and the other contracting party consents to the use of an electronic signature. 

The rules relating to witnesses

In Queensland, there is no legal requirement that a domestic building contract be signed by a witness. However, HIA’s contracts have provision for witnesses. By signing the contract, the builder’s and the owner’s respective witnesses are confirming that they have observed the contracting parties sign the contract. In other words, the builder’s witness attests to the builder’s signature and the owner’s witness attests to the owner’s signature. 

Importantly, all parties do not need to sign the contract together. Each witness only needs to observe and attest to their respective party’s signature. Whilst there is no legal requirement that witnesses sign the contract, HIA recommends that you nonetheless endorse this practice. Indeed, if a legal dispute arises as to the validity of a party’s signature, witnesses can confirm the legitimacy of the signatures. 

Faxing, emailing and photocopying 

Parties to a contract are permitted to email a signed copy of a contract. The ETA provides that if a State law requires a person to give information in writing (such as the requirements applicable to building contracts under the QBCC Act) the requirement is met via an electronic communication if the method is reliable and appropriate in the circumstances and the other contracting party consents to the use of this method. This legal principle applies to the scanning, faxing and emailing of domestic building contracts. 

What is important, however, is that all parties sign the same version of the contract. For example, if you are contracting with a home owner who is interstate, you would email a copy of the contract requesting that the owner sign it and email it back to you, and you would then sign the same version of the contract. Indeed, it is fundamental that a contract is signed by both parties. 

Unless the contract contains a “counterpart execution clause” it will usually be insufficient to have two versions of the contract in existence (one signed by each party) as such a contract risks being be declared void by the Courts. 

To find out more, contact HIA InfoCentre

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