Electronic media legally binding

[Phil Cooper]

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.