ELECTRONIC SIGNATURES

The legality of Electronic signatures and the Alienation of Land Act.

An electronic signature is defined in Section 1 of the Electronic Communications and Transactions Act 25 of 2002 (the ECTA) as ‘’data attached to, incorporated in, or logically associated with other data and which is used to serve as a signature”.

Section 4(4) of the ECTA is not applicable to the following:

• Agreements for the disposal of immovable property as provided for in the Alienation of Land Act, 68 of 1981;
• Long-term leases of land exceeding 20 years as provided for in the Alienation of Land Act, 68 of 1981;
• The execution of a will or codicil as defined in the Wills Act, 7 of 1953; and
• The execution of a bill of exchange as defined in the Bills of Exchange Act, 34 of 1964.

Section 2(1) of the Alienation of Land Act 68 of 1981 provides that an agreement for the alienation of immovable property must be in writing and signed by the parties or by their agents on their written authority.

In the case of Borcherds and Another v Duxbury and Others (1522/2020) [2020] ZAECPEHC 37; 2021 (1) SA 410 (ECP), the Purchaser manually signed the offer to purchase immovable property in wet ink and the document was scanned and emailed to the Seller who received it on his mobile device. The document was then imported into the Docusign Program where it was signed by the Seller. The Docusign Program contained the sample signature of the Seller, which was derived from the wet ink signature of the Seller. The Seller then received an offer to purchase from a third party for a higher purchase price and attempted to repudiate the existing sale agreement (offer to purchase) based on the argument that the Seller did not sign the offer to purchase in “wet ink” and therefore the Seller’s signature was not valid.

The High Court in its judgment focused on whether the Seller’s signature (irrespective of the fact that the signature was not in wet ink) is / was an adequate confirmation of the identity and intention of the signatory. The High Court highlighted that the words ‘’sign’’ or ‘’signed’’ are not defined in the Alienation of Land Act, 68 of 1981 and that the provisions of the ECTA have no application in respect of agreements pertaining to the alienation of immovable property by virtue of the provisions of Section 4(3) of the ECTA read with Schedule 1 of the ECTA. The High Court concluded that the signatures inserted on the offer to purchase by the Seller by way of the Docusign Program were valid.

However, and notwithstanding the above High Court decision, one needs to be mindful and take into account the various case law that has developed over the years regarding the Alienation of Land Act, 68 of 1981, which has to date interpreted ‘’signatures’’ to mean ‘’wet ink” signatures.

Purchasers and Sellers are accordingly cautioned against signing any agreement pertaining to the alienation of immovable property other than by way of the traditional wet ink on paper signing method to avoid the repercussions of an invalid agreement.