Electronic Signatures and Statutory Formalities
In South African law, a valid signature identifies the signatory and evidences an intention to be bound. The Electronic Communications and Transactions Act 25 of 2002 (“ECTA”) recognises electronic signatures for most commercial transactions (s 13), a position affirmed in Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash 2015 (2) SA 118 (SCA). In this matter, the Supreme Court of Appeal held that names appended to the foot of emails may constitute valid electronic signatures, provided the requisite intention to sign is present and no statutory formalities are infringed.
Ordinary vs Advanced Electronic Signatures
Notably, ECTA distinguishes between ordinary electronic signatures and Advanced Electronic Signatures (“AES”). While an ordinary electronic signature is one as contemplated in Spring Forest, section 13(1) of ECTA specifies that an AES may be used in circumstances where a signature is required by law, but the applicable legislation does not specify the type of signature to be used. Importantly, an AES may only be issued by a provider accredited by the South African Accreditation Authority, as contemplated in section 37 of ECTA.
In practice, there are very few accredited providers in South Africa, such that when confronted with circumstances where an AES may be used, it is often preferable to simply make use of a “wet-ink” handwritten signature.
Statutory Exclusions under ECTA
However, certain agreements are excluded from ECTA’s recognition of electronic signatures in terms of section 4(4), read with Schedules 1 and 2. Consequently, such agreements still require traditional “wet-ink” signatures to be valid. These include:
- The execution of a will or codicil;
- The sale of immovable property;
- Long-term leases of land (exceeding 20 years); and
- Bills of exchange.
Furthermore, some forms of agreements carry specific statutory formalities that require strict compliance. One such example is a Suretyship Agreement:
Suretyship Agreements
Section 6 of the General Law Amendment Act 50 of 1956 requires that a contract of suretyship be a written document signed by or on behalf of the surety. The courts have interpreted this requirement strictly. In Massbuild (Pty) Ltd t/a Builders Express, Builders Warehouse and Builders Trade Depot v Tikon Construction CC and Another 2020 JOL 48548 (GJ), the court confirmed that non-compliance with statutory requirements renders such suretyship agreements unenforceable. In practice, this means that the signature on a suretyship agreement must either be a wet-ink signature, or an AES issued by an accredited provider, in order for the agreement to be valid and binding.
Therefore, while ECTA provides a flexible framework for modern commerce, its operation is strictly limited by statutory exclusions. It is important to keep in mind that, where legislation prescribes a “wet ink” signature, or a properly authorised AES, one should abide by such formalities, on account of non-compliance resulting in the agreement’s invalidity.
Should you require assistance regarding the validity of your digital or physical agreements, please feel free to contact C&A Friedlander Attorneys Inc.
JAMES DU PREEZ
Candidate Attorney
065 900 1226 | jamesp@caf.co.za
This article is a general information sheet and 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 your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).