Did you know? Your email can legally bind you to a contract

Did you know? Your email can legally bind you to a contract
July 5, 2017 Tersia Landsberg

One of the main aims of the Electronic Communications and Transactions Act 25 of 2002 (ECTA) is to promote legal certainty in respect of electronic communications and transactions.

Section 13(3) of the ECTA states that:

“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.”

The ECTA further defines an electronic signature as:

“data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature.”.

A case that gave clarity on Section 13(3) was the Supreme Court of Appeal (SCA) case of Spring Forest Trading CC v Wilberry (Pty) Ltd t/a Ecowash and another (2015). The question dealt with here was whether or not a person’s email signature is sufficient to satisfy the requirements of an electronic signature in terms of Section 13(3).

The courts in South Africa have always adopted a pragmatic approach to signatures rather than a formalistic approach and the primary consideration is not whether the signature is literally pen on paper, but rather if the method of signature has fulfilled the function of authenticating the identity of the signatory.

Case study: The facts

In Spring Forest Trading CC v Wilberry (Pty) Ltd t/a Ecowash and another (2015) the parties concluded 4 rental agreements and each agreement contained a non-variation clause stipulating that:

“no variation…or agreement to cancel shall be of any force and effect unless in writing and signed by both parties.”.

The lessee sent an email to the landlord in which they opted to cancel the agreements and the landlord responded to these emails, confirming what the lessee opted to do. The landlord denied this cancellation as it argued that there was a non-variation clause in the agreement and could only be cancelled in writing with both parties’ signatures.

The SCA concluded that the names of the parties at the foot of their respective emails were:

  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.

The requirements of Section 13(3) of the ECTA was therefore met and the court held that the agreements were cancelled through the emails.

Lessons learned

The lesson learnt from this court case is that you should always be cautious when corresponding via email, especially pertaining to cancellation or variation of contracts. The approach followed by our courts, hereby conforms to the aim and purpose of the ECTA.

It’s recommended to steer clear of standard non-variation clauses and specifically exclude electronic forms of acceptance or variation as defined in the ECTA. Such a specific exclusion will therefore give the pen power over an email.

ABOUT THE AUTHOR

Shaun Eastman holds Bcom(Law), LLB and LLM degrees and is a specialist in Tax Law. He was admitted as an attorney of the High Court in 2016. He has been with SEESA Consumer Protection & POPI at the Pretoria office since 2016 as legal advisor.

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