ELECTRONIC SIGNATURES. SIGN HERE… ARE ELECTRONIC SIGNATURES OUR NEW NORMAL?

Firstly, what does the law say – are electronic signatures valid?

The legal recognition of electronic signatures can be found in the Electronic Communications and Transactions Act, 2002 (hereafter referred to as the “ECTA”) and provides that electronic signatures does have force and may be binding.

The definition of an electronic signature, in terms of section 1 of the ECTA:

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

Moreover, section 13 of the ECTA determines that electronic signatures are not automatically invalid merely because of its electronic nature and that the signature will be valid if:

  1. “(a): a method is used to identify the person and to indicate the person’s approval of the information communicated; and
  2. (b): having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated”.

Therefore, it can be generally accepted that the use of digital signatures in a time of crisis, like the Covid-19 pandemic, where people are required to be in self-isolation or when practising social distancing, will be accepted as it might have been the only reliable and appropriate manner available to the parties.

Secondly, how safe is it to use such electronic signatures?

With electronic signatures becoming more popular than ever and it being a very convenient mechanism – please be aware of falsified electronic signatures, as it can be quite easy for someone to copy and paste such signatures for other documents, you might not even know of. Thus, be mindful to whom you send your electronic signature.

Also, when receiving documents that have been signed digitally, rather be safe than sorry and confirm with the party who signed the document, that it is indeed his/her signature (for example by using a voice note/ voice message).

Frequently asked questions

Question/Statement

Answer

Does a person’s name at the end of an email constitute an electronic signature, as defined in the ECTA?

Yes, “so long as the ‘data’ in an email is intended by the user to serve as a signature and is logically connected with other data in the email the requirement for an electronic signature is satisfied”

Spring Forest Trading v Wilberry, the Supreme Court of Appeal.

May all types of contracts/documents be signed electronically?

No, there are exceptions. Some agreements will not be valid if they are not originally signed:

  • Sale Agreement of Immovable Property;
  • Long-term leases of land (exceeding 20 years)
  • A person’s will;
  • Cheques;
  • Contracts which makes provision therefore that the particular contract may only be signed or perhaps amended by parties, by doing so in writing and by original signatures of all the parties.

Is a signature, created with an electronic pen (for example an Apple Pencil or a Stylus) sufficient?

Mostly, yes – but if a signature is required by law and the specific law does not specify the type of signature, this requirement will only be satisfied if an advanced electronic signature is used.

What is an advanced electronic signature?

In terms of section 37 of the ECTA it is an electronic signature which was produced from a process which has been accredited by The South African Accreditation Authority – for example the South African Post Office have been accredited by the Authority as such.

Will electronic signatures used in board meetings and shareholders’ meetings be valid?

Yes, unless a particular law or the company’s Memorandum of agreement states otherwise.

This also means that these types of meetings may be held through electronic communication as determined in section 63 of the Companies Act of 2008, in the case of shareholders’ meetings and section 73 of the same Act, in the case of board meetings.

 

Golden tip

Having said the above about electronic signatures, remember that the most important thing when it comes to contracts or other documents that require your signature, is to read and understand the contract or document. Once signed, you confirm that you have read the content thereof and that you understand the terms and conditions as included therein.

Lastly, should you need more advice or guidance in this regard, feel free to contact our Legal Department via email: lorraine@fhbc.co.za or c.vandermerwe@fhbc.co.za

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