“This post discusses an interesting case in South Africa involving contract amendments via e-mail and other electronic platforms.”
A recent court decision, Spring Forest Trading v Ecowash, potentially allows contracting parties to sign their contracts by way of a data message (which includes emails and other communication platforms such as WhatsApp, BBM and social media) by typing their name at the end of a message. In the case, the contract was subject to a non-variation clause stating that no variation or consensual cancellation would be valid unless reduced to writing and signed by both parties. An email signed “Greg” was held to be a signed document.
Electronic communications = writing
The Electronic Communications and Transactions Act, 2002 (ECTA) gives communications via data messages the same effect as non-electronic documents. This means that if there is a requirement to have a document in writing, the ECTA gives the same legal effect to that document in electronic format.
Email signature = electronic signature
If a signature is required by law (i.e. statute), ECTA requires an electronic communication to contain an advanced electronic signature from an accredited authority (for example, ante nuptial contracts and sale of immovable property). But an agreement between private parties to sign a document, such as a non-variation clause in a contract, does not amount to a legal requirement for a signature and therefore an advanced electronic signature is not required.
If private parties require a signature in order to conclude or amend a contract, but have not agreed the type of signature to be used when transacting electronically, the “signature” requirement is met if the method used:
- identifies the person;
- indicates the person’s approval of the information communicated; and
- is reliable and appropriate for the purposes for which the information was communicated, having regard to the circumstances.
In this case, a person’s name at the end of an email satisfied these requirements.