Electronic signatures have become an increasingly popular method of signing all manner of documents and contracts, with their use becoming even more widespread as the world adapted to stay-at-home orders during the Covid 19 pandemic. The legal validity of using electronic signatures is examined below.
The Electronic Communications and Transactions Act, 25 of 2005 (“ECTA”) regulates the use of electronic signatures in South Africa and distinguishes between two types of electronic signatures, these being:
- Electronic signatures, meaning data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature; and
- Advanced electronic signatures, meaning an electronic signature that results from a process which has been accredited by the Accreditation Authority of South Africa. Currently, the only two accredited providers of advanced electronic signatures are the Law Trust Party Services and the South African Post Office.
Generally, electronic signatures are valid in South Africa unless their use is specifically excluded by a statutory provision, or the parties to a transaction agree on another method of signature, or the law requires that a document must be signed without specifying the type of signature to be used.
Where a signature is required by a statutory provision, but the type of signature is not specified, then in terms of section 13(1) of the ECTA an advanced electronic signature must be used.
In terms of section 13(2) of the ECTA an electronic signature is not without legal force and effect merely on the basis that it is in electronic form. Therefore, where the law is silent on the need to sign any particular document an advanced electronic signature, ordinary electronic signature and traditional signature will all be equally valid.
The parties to an agreement can also determine what type of electronic signature will be valid. Section 13(3) of the ECTA states that where the parties to an agreement elect to impose a requirement that an electronic signature will be required, without specifying which type of electronic signature is to be used, such requirement will be satisfied by the use of an ordinary electronic signature.
The use of electronic signatures to sign documents required in terms of the Companies Act, 71 of 2008 (“Companies Act”) has become common place. Advanced electronic signatures can be used to sign any document required to be signed in terms of the Companies Act. Documents which are not required to be signed by the Companies Act can be validly signed using an ordinary electronic signature.
However, the Companies Act does require that certain documents must be signed to be valid. Section 6(12)(a) of the Companies Act states that where the Act requires a document to be signed this can be done in any manner provided for in the ECTA.
The question which then arises is if the words “any manner provided for in the Electronic Communications and Transactions Act” adequately provides for the use of both ordinary and advanced electronic signatures in accordance with section 13(1) of the ECTA. As clarity has not yet been provided it is advised to only make use of advanced electronic signatures for documents which the Companies Act specifically requires to be signed.
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