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Thread: Electronic media legally binding

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    Email problem Phil Cooper's Avatar
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    Electronic media legally binding

    A recent ruling from the Supreme Court of Appeal (SCA) shows that simply signing your name at the end of a WhatsApp message or e-mail is enough to constitute a binding agreement.

    The SCA ruling in November found that e-mail negotiations and typed e-mail signatures were binding.

    In the case, two companies signed agreements with clauses providing that cancellation to a specific contract could only be made in writing and signed by both parties.

    However, when the contract was to be cancelled, the terms of the cancellation were recorded in an e-mail exchange and the names of the parties appeared at the bottom of each e-mail.

    When one of the businesses entered into another agreement with another company, the former partner interdicted the arrangement on the basis of breaching the former contract.

    On appealing the interdict, the SCA upheld the appeal, ruling that the email exchange cancelling the contract was binding in terms of the Electronic Communications and Transactions Act, 2002 (ECTA).

    Message with caution

    Following the ruling, law firms Webber Wenzel and Norton Rose Fulbright detailed how the SCA reached its conclusion.

    Norton Rose Fulbright associate Nerushka Deosaran noted that the ECTA gives communications via data messages (including WhatsApp, BBM, and even social media) 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,” Deosaran said.

    When a signature is required by law, however, the ECTA requires electronic communication to contain an “advanced electronic signature” from an accredited authority.

    “But an agreement between private parties to sign a document…does not amount to a legal requirement for a signature and therefore an advanced electronic signature is not required.”

    If a type of electronic signature isn’t agreed upon by both parties when transacting electronically, a person’s name at the end of an email or data message is enough to satisfy the requirements set out by the ECTA – namely:

    It identifies the person.
    It indicates the person’s approval of the information.
    It is reliable and appropriate for the purpose it was communicating, with regard to the circumstances.
    Webber Wentzel technology, media, and telecommunications head Robby Coelho noted further that parties should exercise caution in their electronic communications, given how pervasive these communications are in the workplace.

  2. Thank given for this post:

    AndyD (23-Dec-14), BusFact (23-Dec-14), Dave A (25-Dec-14)

  3. #2
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    To a non legal person that just seems so obvious to me. How did it have to go to the SCA?

    Well at least its been clarified.

    I have always been under the impression that a verbal agreement was as binding as a written one. The only catch is in proving the content of the verbal one. How an electronically typed messaged should be of any less value than any other sort of communication, baffles me.

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    Platinum Member sterne.law@gmail.com's Avatar
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    Correct on oral being good enough.
    However this was a written contract with a clause that no amendments will be in effect unless reduced to writing.
    Hence the need to determine if the email constituted in writing.
    I don't think the opposition doubted that the email will be ruled writing, but there was a couple of million at stake so it was worth a stab.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Gold Member Houses4Rent's Avatar
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    Very interesting, thanks for that. Could you please give a reference of that case/judgement please?

    I was once told that electronic signatures are not legal though, but I see some courier companies use electronic pads to sign on. Are they taking a chance or is it legal by now?

    I guess inserting an image containing a signature is not binding at all then?
    Houses4Rent
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    Platinum Member sterne.law@gmail.com's Avatar
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    I think the judgment will explain the situation.
    http://www.saflii.org/za/cases/ZASCA/2014/178.html

    In short the ECT act sets out that just because "something" is in electronic form does not exclude it. This concludes certain forms of evidence which, but for the ECT, would be hearsay evidence, and caters for signatures.

    The real intrigue, as in this case, was that there was no actual signature, but merely the typing of the name.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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