What is a signature in the digital age?

By: Kaitlyn Carney & Paul Labarge

A recent case (1475182 Ontario Inc. o/a Edges Contracting v. Ghotbi et al) from the Ontario Superior Court highlights the complications technology brings to the determination of what constitutes a signature. The unique identifiers associated with a text message were deemed sufficient to meet the express statutory requirement for a signature.

The plaintiff had done renovations for the defendant, and the defendant had failed to make the final payment for the work. Since the plaintiff did not commence an action for the unpaid balance in small claims court until two years after the work was completed, the issue became whether the claim was time-barred by the Limitations Act, 2002. The issue turned on whether the text message sent by the defendant, acknowledging that there was a balance to be paid, constituted an acknowledgment under s.13 of the Limitations Act which would extend the limitation period for the claim.

On its face, the text message failed to meet the express statutory requirement for a signature for an acknowledgment by the debtor of the liability. The statute does not stipulate what form the signature must take. Surprisingly, court adopted an interpretation of what constitutes a signature that is broader than the traditional pen and paper method. A signature is meant to be a unique identifier of a person, for authentication purposes. The court found that unique identifiers associated with the text message, such as the phone number and the IMEI number of the phone itself, served the authentication purpose and constituted a digital signature. There was no question that the defendant sent the text from his phone.

Whether this reasoning will be adopted by higher courts in the future remains to be seen. The main takeaway is that where technology is outpacing the laws and the issues are left open for interpretation by the courts. The lesson from this case is that it is possible to unintentionally form a binding contract through the casual exchange of texts or e-mails, where there are unique identifiers linking the message to the sender. As electronic communication continues to evolve, keep in mind where the technology solution or chosen medium has sufficient unique identifiers you can have signed for an unanticipated obligation.