Supreme Court gives e-signatures the green light.
Electronic signatures are legally binding.
A LANDMARK Supreme Court of Appeal judgement has finally cleared up the legal grey area of electronic signatures on documents.
It has declared that printing your name at the end of an email is indeed the same as signing by hand, and is therefore contractually binding.
In the case of Spring Forest Trading versus Wilberry (Pty) Ltd (trading as Eco-wash), the parties signed an agreement by which Spring Forest Trading (the appellant) leased mobile dispensing units from Eco-Wash (the respondent) to wash cars at shopping malls, hospitals and parking areas.
Spring Forest, however, fell into arrears and the parties met to discuss some proposals.
The appellant’s representative agreed to consider the proposals and respond.
A series of email correspondence was exchanged between the representatives, clarifying the proposals and ending off with their names ‘Greg’, ‘Henry’ and ‘Nigel’.
In the last mail, the representative of Spring Forest confirmed that all leased equipment will be returned and that no further recourse shall follow, ending the email with ‘Greg’.
Spring Forrest, believing the contract was cancelled by mutual agreement, continued the same business through another service provider at the same locations which were covered by the agreement with Wilberry.
However, Wilberry successfully applied for a temporary interdict in the Durban High Court, arguing that the exchange of email correspondence was not binding because the agreement stated that ‘no variation or agreement to cancel shall be of any force and effect unless in writing and signed by both you and us’.
This is known as a ‘non-variation clause’.
Exceptions
On appeal, Spring Forest argued that the requirements of the non-variation clause had been met in terms of the Electronic Communications and Transactions Act (ECTA), which governs e-mail exchange.
The Act stipulates that if the law requires that a document or information must be in writing, the requirement is met if it is in the form of a data message and accessible in a manner usable for subsequent reference.
Exceptions to the rule are agreements for alienation of immovable property, long-term leases of immovable property, testamentary documents and the execution of a bill of exchange. These documents require advanced electronic signature’ accredited by authority.
The appeal court agreed with Spring Forest that the exchange of emails between the parties did indeed constitute an agreement in writing signed by the parties and that the original agreement was thus mutually cancelled.
The court rejected Wilberry’s submission that an advanced electronic signature was ‘required by law’ because the requirement for a signature stemmed from the agreement between the parties.
Wilberry was ordered to pay the costs of appeal.
