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- It is no surprise that contract ratification has embraced digital alternatives to traditional paper-based methods.
- In South Africa, how strong is this in ratifying a contract?
- For more stories, visit the Tech and Trends homepage.
As technology continues to reshape various aspects of our lives, it is no surprise that contract ratification has embraced digital alternatives to traditional paper-based methods.
In South Africa, how strong are these digital methods in ratifying a contract?
To shed light on the matter, we spoke to Helgard Janse van Rensburg, a partner and commercial attorney at Adams & Adams, to explore the strength of digital signatures and its impact on contract enforceability in the South African legal framework.
Janse van Rensburg told News24 that, generally speaking, electronic signatures - like wet ink signatures - are binding when signing contracts.
"An electronic signature is a legally recognised method of a signatory consenting to the terms of a contract and/or the contents of a document in terms of the Electronic Communications and Transactions Act 25 of 2004 (ECTA)," he said.
"Standard electronic signatures can be used, unless the law prohibits the use of electronic signatures or requires the use of an 'advanced electronic signature'."
What is an advanced electronic signature?
While in most instances, parties to a contract are generally free to contract electronically and to sign the agreements with electronic signatures, if they wish to do so, there are circumstances that one would need an advanced electronic signature to ratify an agreement.
"An advanced electronic signature is a signature that has been accredited by the South African Accreditation Authority through one of its entities, namely, the South African Post Office or The Law Trust Party Services, who are accredited to authenticate advanced electronic signatures and guarantee the authenticity of such signatures."
Janse van Rensburg explained that the authentication process of this kind of electronic signature involved - among other things - linking the signature to the user and ensuring the security and integrity of the signature was upheld by way of a digital certificate to confirm the identity of the signatory, face-to-face verification mechanisms, and a three-factor authentication via various means, such as biometrics, passwords, keys, and devices.
He said the parties to the contract were at liberty to determine which form of electronic signature they would require for the contract (advanced or standard electronic signature), in order for the document to be regarded as properly signed, valid and binding.
In instances where the parties to an agreement had not specified the form of electronic signature to be used, this was the provision the ECTA Act made:
Where the signature of a person is not required by law but contracting parties have agreed that electronic signatures are required for the transaction, but have not agreed on the type of electronic signature to be used, then the ‘requirement’ for an electronic signature will be satisfied if:
(i) a method is used to identify the person and indicate the person's approval of the information communicated; and
(ii) 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.
"In other words, where the signature of a person is not required by law and the contracting parties have agreed to the use of electronic signatures, without specifying the need for advanced electronic signatures, most forms of ordinary electronic signatures will be legally binding."
When an issue gets to court
In terms of the ECTA, advanced electronic signatures will be regarded by a court as being a valid electronic signature and to have been applied properly, unless the contrary has been proven by the person alleging its invalidity.
"Accordingly, where an advanced electronic signature is used, it is presumed to be legally valid and the onus to disprove its validity lies with the disputing party," Janse van Rensburg explained.
"However, where an ordinary electronic signature is used, the presumption does not apply and the person relying on the electronic signature will have to prove its validity."
He adds that the courts will evaluate the integrity of the electronic signature and possibly also consider the system it was generated and transmitted on.
This will assist in ascertaining the authenticity of the electronic signature, and confirm that the electronic signature has not been "tampered with and has been signed by the person purporting to be the signatory", and that they are able to verify the contents of the document.
Electronic signatures are not legally binding and enforceable in relation to:
(i) an agreement for alienation of immovable property as provided for in the Alienation of Land Act;
(ii) an agreement for the long-term lease of immovable property in excess of 20 years as provided for in the Alienation of Land Act;
(iii) the execution, retention and presentation of a will or codicil as defined in the Wills Act; and
(iv) the execution of a bill of exchange (such as a cheque or a promissory note) as defined in the Bills of Exchange Act.
