How can Electronic Signatures make life easier?

Electronic Signatures

In a world faced with a COVID-19 pandemic, strict social distancing rules and a country-wide lockdown, handwritten signatures have become almost impossible to obtain when concluding contracts. This begs the question, is it possible to obtain a signature that has the same legal status as the traditional ‘wet ink’ signature?

South African law makes provision for three available methods to a signatory when executing a contract:  Wet Ink signatures, Electronic signatures and Advanced Electronic signatures.

In terms of the common law a ‘wet ink’ signature is a handwritten symbol appended to a document by a person, however, as held in Da Silva v Janowsky[1], a signature does not refer merely to the written characters appearing on a document; it refers to the fact of signature in relation to the contents of the document on which it appears.

It is clear from the common law definition of a signature that an electronic signature cannot meet these requirements as an electronic signature refers to ‘data attached to, incorporated in or logically associated with other data and which is intended by the user to serve as a signature’.[2]  This is, however, not the end of the road for electronic signatures. The Electronic Communications and Transactions Act (ECT Act) accredits electronic signatures with the same legal status as traditional ‘wet ink’ signatures, as discussed below, subject to specific exceptions.

In South Africa, electronic signatures are regulated by both common law and the ECT Act. Therefore, if a constitutive formal requirement for validity is that the document is required to be signed by the party to it, an electronic signature may be used as an alternative method of signing when traditional signing is not possible, provided that the signature performs all the functions of a tradition wet signature, namely:[3]

–           It must identify the person assenting to or attesting the document;

–           It must attribute the document to a specific person;

–           It must indicate assent or attestation, and

–           It must authenticate the originality of the document

Section 13 of the ECT Act makes provision for the use of electronic signatures.[4] In Spring Forest Trading, the Supreme Court of Appeal held that the ECT Act differentiates between occurrences where the law requires a signature and those on the other hand which the parties to a transaction impose this obligation upon themselves.[5]

Section 13(1) of the ECT Act provides that an ‘advanced electronic signature’ must be used in circumstances where the law requires a signature to conclude an agreement but is silent on the type of signature to be used.  An advanced electronic signature is a form of an accredited encryption device and in order to be accredited, application for accreditation to the South African Accreditation Authority must be made.[6]

However, on the other hand, a signature that is merely required by parties themselves to an electronic transaction, and the type of electronic signature to be used is not specified, the requirement will have been complied with if a method is used to identify the person and indicates the person’s approval of the information communicated as seen in s 13(3)(a).[7] In addition, one must have regard to the circumstances when a particular method is used and whether it is appropriately reliable for the purpose for which the information was communicated, as found in s 13(3)(b) of the ECT Act.[8]

In specific circumstances the ECT Act excludes documents from being concluded electronically, whether or not an advanced electronic signature is used by the parties to sign:[9]

• agreements for the sale of immovable property;
• long-term leases of land exceeding 20 years;
• the signing of a will; and
• bills of exchange

Section 13 strives to give functional equivalence to electronic signatures by requiring that they be adequate to link the message to a specific person, ensure identification and attribution and to indicate the reliability of the person’s approval of the document or contract.[10]

An electronic signature which is inserted into contract or document with the signatory’s intention to convey his acceptance, and to be bound by the terms of the contract or document will have the same legal status as the traditional ‘wet ink’ signature and can be done from the comfort of one’s home.

In this uncertain time, it is important that we are proactive and think of new ways of doing things. It is vital that we use technology to our advantage. For more information or advice on electronic signatures, contact us at https://www.pagdens.co.za/contact/

[1] 1982 (3) SA 205 (A) at 218F-219C [1982] All SA 43 (A).

[2] S1 of the Electronic Communications and Transactions Act, 25 of 2002.

[3] Van der Merwe Information and communications technology law (2016) 176.

[4] S13(1) of 25 of 2002.

[5] Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA).

[6] Ss1 and s37 of 25 of 2002.

[7] Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA).

[7] 25 of 2002.

[8] Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA).

[8] 25 of 2002.

[9] Schedule 2 of 25 of 2002.

[10] Van der Merwe Information and communications technology law (2016) 178.

This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE)