In light of the customary practice of digitally signing a promissory note, and the lack of clarity inherent in section 2 of the Electronic Signature Law, I am of the opinion that the interpretation of the sale by electronic signature on a promissory note should also be chosen for reasons of legal certainty required by entities such as the Applicant.
- The second reason relates to the importance of creating competition for banks. The Applicant's CEO stated at the hearing that his goal was to create an alternative to the banking system, and clarified that the Applicant is a supervised company that holds an extended credit license of the Capital Market Authority (see the Discussion Section, pp. 4, Q3 ff.). As is well known, the Check Clearing Law has enabled banks in Israel to transition to the digital age in terms of clearing, thus streamlining their work while saving on their costs. The same is true of the Bank of Israel's various procedures regarding online accounts. It is expected that the state will also provide technological solutions to businesses that wish to compete with banks that use promissory notes, such as the Applicant. A reality in which only banks are given the tools to move to the digital world (even if partially), while their competitors are forced to continue operating only in the physical world, is not a desirable result in terms of competition in the banking world.
Interim Summary
- The Electronic Signature Law was enacted with the aim of increasing certainty regarding actions carried out electronically, while recognizing the evidentiary status of electronic signatures, in light of the legislature's desire to adapt existing legislation to technological developments. In addition to the aforementioned, traditional banknote law has evolved over the years in accordance with the custom of merchants, and today in the ordinary course of business, electronic signatures are frequently used.
Therefore, both in light of the will of the legislature and in view of the accepted interpretation of promissory notes, and since there are currently technologies that enable the creation of a single-value file that cannot be changed, there is no impediment to recognizing an electronic signature on a promissory note at this time, insofar as it amounts to a distinctly personal act, provided that it is a non-negotiable promissory note or that has not been actually traded and is requested to be executed at the Execution Office between close parties.