More than just “Kind Regards”

electronic signature
08 Jul 2024

What constitutes an electronic signature in the eyes of our law?

If you have, or are considering, entering into an agreement by electronic means, you should be aware of the implications of the Electronic Communications and Transactions Act 25 of 2002 (“Act”) and the view of our courts.

It must be noted that although electronic signatures are becoming more commonplace, the Act provides that traditional “wet ink” signatures are required for the following:

  • an agreement for alienation of immovable property;
  • an agreement for the long-term lease of immovable property (in excess of 20 years);
  • a will or codicil; and
  • a bill of exchange

The Act distinguishes between two types of electronic signature, namely:

Standard Electronic Signature:

  • Data attached to, incorporated in, or logically associated with other data.
  • Intended by the user to serve as a signature.

These signatures do not require user ID verification and do not necessarily have to be signatures in the traditional sense in that they can constitute clicking “accept” on an online form for example. These types of electronic signatures will suffice in most instances where law does not dictate that a signature or type of signature is required.

Advanced Electronic Signature:

  • Similar to a standard electronic signature but with enhanced security.
  • Can only be created using a digital certificate.
  • Issued by an authentication services provider accredited by the South African Accreditation Authority.

These are electronic signatures with a higher level of security/verification. Section 13(1) of the Act states that when a person’s signature is specifically required by law, and such law does not indicate the type of signature required, that requirement is only met in relation to a data message if an advanced electronic signature is used.

Now that it is understood that there are two types of electronic signature, there arises the inevitable situation of what to do when the type of signature required has not been discussed between contracting parties? Luckily, section 13(3) of the Act provides the following “guideline”:

Where an electronic signature is required by the parties to an electronic transaction and the parties have not agreed on the type of electronic signature to be used, that requirement is met in relation to a data message if a method is used to identify the person and to indicate the person’s approval of the information communicated; and having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated.”

Simply put, section 13(3) of the Act states that if the parties have not agreed on a specific type of electronic signature needed for an electronic transaction, any method that can identify the person and show their approval of the message is acceptable, as long as the method used was reliable enough given the circumstances at the time.

A practical example of the interpretation of section 13(3) of the Act was seen in Spring Forest Trading CC v Wilberry (Pty) Ltd t/a Ecowash where the SCA had to consider a matter where a lessee cancelled lease agreements via email, and the landlord confirmed this cancellation by email. Later, the landlord denied the cancellation, citing a non-variation clause requiring written and signed agreement from both parties. The court examined whether email signatures met the requirements of an electronic signature under section 13(3) of the Act and ultimately found that the email signatures used by the parties to sign off their emails:

  1. intended to serve as signatures;
  2. constituted “data” which was logically associated with the data in the body of the emails; and
  3. identified the parties

thus, concluding that the requirements of section 13(3) of the Act were fulfilled and the agreements were validly cancelled.

The criteria in Spring Forest could be further applied to other digital communication platform, such as WhatsApp and iMessage. In the recent Canadian case of South West Terminal Ltd. (SWT) vs. Achter Land & Cattle Ltd, the court looked at the defendant’s use of a “thumbs up” emoji in response to a text message with a picture of a signed contract and a request to confirm the terms thereof. The emoji was found to constitute a form of expressed approval and the defendant’s acceptance of the deal with the defendant’s cell phone number acting as a means of identification, thus the emoji was considered comparable to a signature. Although this case isn’t binding on South African courts, it is persuasive, and the courts may consider the merits when dealing with a dispute of a similar nature.

The SCA’s decision in Spring Forest provides a clear view as to the way the law in South Africa views electronic signatures and as we near closer and closer to completely paperless business and legal worlds it is vital to have an understanding of what and when you are signing something.

Article sourced from Eversheds Sutherland.

See also:

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Lara Jansen van Rensburg

Lara Jansen van Rensburg is a senior associate at Eversheds Sutherland (KZN) in the commercial department, advising primarily on commercial transactions. She holds an LLB degree and an LLM (Business... Read more about Lara Jansen van Rensburg

Myles Kisten

Myles Kisten is an Associate in the Corporate and Commercial Department at our Durban office. He joined Eversheds Sutherland in 2024 as a Commercial Lawyer assisting with reviewing and drafting... Read more about Myles Kisten

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