The legal requirements for the lawful use of electronic signatures

By Kyle Venter, Candidate Attorney, Dingumuzi Ndhlovu, Associate and Lisa Schmidt, Associate

Introduction 

This article seeks to examine the legal requirements for the lawful use of electronic signatures. It will focus on the use of electronic signatures in the legal industry.

1. Why a focus on the Legal Industry?

Unlike most industries that have embraced the turn of the 4th industrial revolution, the majority of the stakeholders in the legal industry continue to lag behind the frontrunners and/or pioneers championing the call for change and digitization. What is evident, however, is that those who have embraced change brought by technology have begun to capitalise on one of the many advantages it creates. 

Let us begin by taking a look at the intended purpose of a signature before we delve a little deeper into whether an electronic signature can replace what we would regard as the “wet signature” or the “ink pen signature” in the legal industry. 

2. The purpose of a signature 

In the general sense, and not necessarily only in the legal sense, the purpose of a signature satisfies the following: 

1. it identifies the signatory;
2. it shows intent by the signatory that his/her signature was intended for the signed document; and 
3. it infers that the signatory agrees to and/or ratifies the contents contained in the document being signed.

Therefore, if an electronic signature complies with these three purposes, the electronic signature should be deemed valid. 

3. Common Law and The Electronic Communications and Transactions Act (“ECTA”) 

Before any legislative interventions, the legal requirements for a signature were, for the most part, governed by the common law. The requirements under the common law for a valid signature were: 

1. the name or mark of the person signing must appear on the document; 
2. the person signing must have applied the signature or mark themselves; and 
3. the person signing must have intended to sign the document.

At present and with the introduction of the ECTA in 2002, both the common law and the ECTA regulate the legal requirements for signatures, with the ECTA specifically regulating that of electronic signatures. 

Section 1 of the ECTA 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” 

One should be cognisant of the fact that certain documents require a higher degree or greater standard of certainty with regard to signatures, than others.  For example, there are special legal requirements for how and where signatures on wills and documents that are notarized are to be placed, but there are no special requirements for signatures on contracts or short-term leases of land. 

As such, a distinction should be made between standard electronic signatures and advanced electronic signatures: – 

• standard electronic signatures – these types of signatures can be administered on documents between parties which do not specify which type of electronic signature should be used in the circumstances (letters, invoices, employment contracts).
• advanced electronic signatures – these types of signatures might be used by lawyers to sign documents that carry with them additional legal formalities for a signature which need to be observed. 

In expanding on the above, an advanced electronic signature, is a digital signature that is verified by a digital certificate from an accredited authority in terms of section 37 of the ECTA.  The digital certificate will ensure that the security, integrity and identity of the signatory is upheld.   

An advanced electronic signature consists of a digital certificate confirming the identity of the applicant, with an added face-to-face verification mechanism, as well as 3-factor authentication, which includes: 

• biometrics, such as fingerprint and iris scan;
• pin, password, passphrase or secret question; and
• key, device.

In South Africa at present, LawtrustSA is an example of an entity accredited to provide advanced electronic certificates that verify the authenticity of advanced electronic signatures.  

Moreover, the ECTA states that even where a legal document does not prescribe a type of signature to be used, but such document is sent via a data message, it would require an advanced electronic signature to be administered in the circumstances. This means that to satisfy the requirements of the ECTA, when any particular law is silent on what type of electronic signature may be used, the answer is that it must be an advanced electronic signature. 

An advanced electronic signature should be capable of proving that– 

• it is specifically linked to its signatory and is capable of identifying him/her;
• its use is under the sole control of the signatory;
• it can be based on face-to-face identification of the signatory; and
• it is guarded in such a manner that it would be possible to notice any tampering of the data or data message contained in the document. 

With the above in mind, we will consider the provisions of the ECTA that facilitate in ensuring that an electronic signature on legal documents is done correctly, so as to avoid the electronic signature being deemed invalid.

4. Originality

Courts require original legal documents to be filed at court. How would this, if at all, affect legal documents which have been signed with an electronic signature? 

Section 14 (1) of ECTA states that “where a law requires information to be presented or retained in its original form, that requirement is met by a data message if” – 

• the integrity of the information from the time when it was first generated in its final form as a data message or otherwise has passed assessment in terms of subsection (2); and 
•  that information is capable of being displayed or produced to the person to whom it is to be presented.” [emphasis added]

In respect of integrity being assessed, subsection (2) states that this will be achieved if- 

• the information has remained complete and unaltered, except for the addition of any endorsement and any change which arises in the normal course of communication, storage and display; 
• in the light of the purpose for which the information was generated; and 
• having regard to all other relevant circumstances.” [emphasis added]

5. Notarisation, Acknowledgment and Certification

Section 18 (1) of ECTA is of importance and states that- 

“(1) Where a law requires a signature, statement or document to be notarised, acknowledged, verified or made  under  oath, that this requirement is met if the advanced electronic signature of the person authorised to perform those acts is attached to, incorporated in or logically associated with the electronic  signature or data message”. [emphasis added]

6. Onus 

Section 13 (4) of the ECTA prescribes that: –

“Where an advanced electronic signature has been used, such signature is regarded as being a valid electronic signature and to have been applied properly, unless the contrary is proved”.

This suggests a reverse onus, that a party alleging its invalidity bears the onus in proving that the electronic signature was not administered correctly or is invalid for another reason (e.g. identity of the signatory). 

7. Exceptions 

Certain documents which are entirely precluded from the use of electronic signatures include the following: –

• agreements for the sale of immovable property;
• long-term leases of land exceeding 20 year;
• signing of a will; and
• bills of exchange (e.g. Cheque)

Conclusion  

It is apparent from the provisions contained in the ECTA that electronic signatures carry the same weight and validity as the traditional ‘wet signatures’ in most instances (with the exception of sale of land agreements, long term leases, wills and bills of exchange) and are acceptable in our law if appended correctly.

Importantly, one must distinguish between documents that allow for standard electronic signatures and those which require advanced electronic signatures, being an electronic signature that is verified by an accredited authority (e.g. LawtrustSA) and accompanied by a digital certificate, which is incapable of being tampered with or altered when being transferred via a data message between the source and its recipient.  

That being said, only time will tell whether electronic signatures will gain some sort of traction in South Africa, bearing in mind that the ECTA (making provision for the use of electronic signatures) was promulgated in 2002. However, with the current circumstances in mind (COVID-19) and governments stringent social distancing regulations making ‘wet signatures’ the unlikely form to be used going forward, we strongly believe that a shift to a more electronic and convenient source such as electronic signatures is more than likely to happen.