Article was written by Wade O’Connor, Candidate Attorney, and checked by Courtney Altmuner, Associate at Schindlers Attorneys.
30 June 2021
Introduction
A recent report in 2020 identified that, despite many working from home, the sale of home printers were in decline. With the industry remaining firmly embedded in its declining phase, regardless of improvements in the overall economy following the COVID-19 pandemic, and many businesses encouraging employees working from home, a legal lacuna looks set to arise.
In 2021, a situation has arisen whereby many contracts are still required to be signed by hand, however, the existence of the common household printer may not be as common as one might think.
This article will look at what is an electronic signature and when, in terms of the Electronic Communications and Transactions Act No. 25 of 2002 (the “Act”), one is prohibited from using same.
What is an Electronic Signature?
The Act 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”[1].
From this definition, it can be seen that for a signature to be recognised as a valid electronic signature, a connection between what is being signed and the signature and the signatory must have intended the signature to be his or her signature.
Furthermore, section 13 of the Act makes reference to two distinct types of electronic signatures, namely:
i. A standard electronic signature; and
ii. An advanced electronic signature.
Standard Electronic Signature
These signatures include any digital or scanned signatures and are often referred to as non-secure signatures. A standard electronic signature suffices where a signature is required by the parties to an agreement and they do not specify the type of electronic signature to be used. In this instance, the Act provides that the electronic signature will be deemed valid if[2]:
i. It identifies the signatory (or the document’s sender) and indicates his/her approval of the information contained in the document;
ii. Is appropriate for the document at the time of signature; and
iii. Is time-stamped.
For most purposes, standard electronic signatures will suffice when signing a document electronically.
Advanced Electronic Signature:
There are some instances where a standard electronic signature is not adequate, and an advanced electronic signature is required. Such as circumstances where the law requires that an agreement or document must be in writing and signed, such as an “advanced electronic signature”. An advanced electronic signature is a standard electronic signature verified by an accredited authority.
Prohibition of electronic signature
Traditionally in the commercial sphere, parties are free to contract electronically and to sign agreements using electronic signatures. However, section 4(4), read with Schedule 2, of the Act clearly expressly excludes certain documents and agreements from being concluded by way of an advanced electronic signature:
i. An agreement for the alienation of immovable property[3];
ii. A long-term lease agreement for immovable property, being in excess of 20 years[4];
iii. The execution, retention and presentation of a will or codicil[5].
iv. The execution of a bill of exchange, such as a cheque[6].
Conclusion
With emerging technology being able to provide a level of trust and authenticity, the use of electronic signatures is likely to become more prominent within the commercial environment. However, one must remain mindful as to when an electronic signature may be used, as the incorrect use of the same could result in an agreement being void and unenforceable.
Value
Understanding the definition of an electronic signature and when same is prohibited from being used.
[1] Section 1 of the Act.
[2] Section 13(3) of the Act.
[3] As provided in the Alienation of Land Act, 1981 (Act No. 68 of 1981).
[4] Ibid.
[5] As defined in the Wills Act, 1953 (Act No. 7 of 1953).
[6] As defined in the Bills of Exchange Act,1964 (Act No. 34 of 1964).
