Electronic Signatures

Electronic Signatures A New Age Has Dawned

Signatures have played a significant role in written communication for many centuries. Our Courts have held that a signature is “writing one’s name or making one’s mark”; and “any mark whereby the endorser signifies willingness to be bound”.

As the law evolves your business must keep up with these changes and adapt to them to ensure the continued growth of your business. A failure to do so can have catastrophic consequences for a business.

The ECT Act (or Electronic Communications and Transactions Act 25 of 2002) (“ECT Act”) became law in South Africa on Friday, 30 August 2002.

 

Electronic Signature

The ECT Act defines “electronic signature” as:-

“Electronic signature” means data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature”.

It is clear from this definition that an electronic signature includes a pin number, biometrics sensors such as voice, fingerprint scanning, a scanned signature, iris and voice recognition.

Simple electronic signatures can be used in the many instances where the records are now electronic. The functions of an electronic signature can serve various functions such as security (through encryption) and evidentiary.

People use emails to communicate on a daily basis and the question arises whether a variation or cancellation of a written agreement can be done by way of e-mail communication. I.e. is the boilerplate clause regarding non-variation being met of being “in writing” and “signed”?

In terms of section 13(2) the ECT Act provides that an electronic signature has legal force. The fact that it is in electronic form does not detract from the legal implications.

The Supreme Court of Appeal stated in the Spring Forest Trading 599 CC v Wilberry 2015 (2) SA 118 (SCA) matter, where the one party relied on section 13(1) of the ECT Act with regards to the so called non-variation clause, that their reliance on the ECT Act - which states that an electronic signature is required - was misplaced. The Court further stated that the email and electronic signatures used by the parties were good enough and that it conformed to the requirements of the ECT Act and was therefore valid.  

Businesses must be careful how their staff deals with emails as this may lead to variations and or cancellation of written agreements.

If there is a dispute regarding the validity of a signature the normal rules of admissibility apply.

Section 15(1) of the ECT Act provides:

‘In any legal proceedings, the rules of evidence must not be applied so as to deny the admissibility of a data message in evidence –

(a) on the mere grounds that it is constituted by a data message; or

(b) if it is the best evidence that the person adducing it reasonably could be expected to obtain, on the grounds that it is not in its original form.’

Advanced Electronic Signatures

An “advanced electronic signature" means an electronic signature which results from a process which has been accredited by the Authority as provided for in section 37.

Thanks to legislation changes it is possible to sign documents with a few simple keystrokes on a computer. The standard way of doing business has now been changed forever. Where the law previously required an original signature, such as with the sales contract for immovable property, the signature can now be done via advanced electronic signatures.

Section 13(1) of the ECT Act states that “Where the signature of a person is required by law and such law does not specify the type of signature, that requirement in relation to a data message is met only if an advanced electronic signature is used”.

The accreditation of authentication products and services in terms of s 37 of the Electronic Communications and Transactions Act 25 of 2002 (ECT Act) allows for the electronic signatures of such products and services to qualify as advanced electronic signatures, thus safeguarding the authenticity of the signature.

Section 38(1) of the ECT Act reads as follows:

“1) The Accreditation Authority may not accredit authentication products or services unless the Accreditation Authority is satisfied that an electronic signature to which such authentication products or services relate­—

(a) is uniquely linked to the user;

(b) is capable of identifying that user;

(c) is created using means that can be maintained under the sole control of that user; and

(d) will be linked to the data or data message to which it relates in such a manner that any subsequent change of the data or data message is detectable;

(e) is based on the face-to-face identification of the user”.

The South African Accreditation Authority are authorised to approve advanced signatories and they approved the first two signatories for the South African Post office and Lawtrust during 2013.

Examples of documents which can be signed in electronic format by using advanced electronic signatures:

·           Documents containing suretyships;

·           Assignment or exclusive licence agreements;

·           Credit Agreements where the documents does not get signed in the physical presence of each other;

·           Certification of documents;

·           Notarisation of documents.

Make use of advanced electronic signatures if you have a use for them – it keeps your business relevant and it saves time and money.

MARTIN VERMAAK

ATTORNEY