So to kick off, we thought we would give a little information about normal signatures (wet ink signatures), why we use them, and why electronic signatures (e-signatures) are a valid and legal alternative.
There was a time when a contract was not legally binding unless all of the parties involved sat down, reviewed the agreement on paper, then signed in ink and dated it in front of witnesses.
Today, such formal contract signings have become passé. Everyone, from major corporations to small businesses, use email as an essential means of communication. Consequently, people receive and review documents on their PC’s, laptops, smartphones, tablets, and other mobile devices.
While most businesses enjoy the convenience and efficiency of digital communication, there are still concerns over the legal implications of digital contracting through email communication or e-signature platforms.
In 2002, the South African government acknowledged the need for a formal approach to data use and digital contracting when they passed the Electronic Communications and Transaction Act, Act 25 of 2002 (‘the ECTA’)
This Act clearly defined the legal implications of digital documents, data and email but more importantly for us, brought about the legal framework that allows the use of electronic signatures.
Subsequently e-signatures were addressed in other legislation as acknowledgement to the increase in digital contracting in everyday business. A good example is the Companies Act which states that 'a signature or initial on a document may be made by means of an electronic signature or an advanced electronic signature as defined by the (ECTA)'
So both acts mention and allow for electronic signatures in certain situations as an alternative to the wet ink signature.
Lets first look at why we sign documents? The traditional function of a signature is evidential: it is to give evidence of:
- The Identity of the signer, and
- The intention (will) of an individual with regard to that document.
(ie: Who has signed, and in doing so, agreed to the terms)
The Oxford dictionary: ’a person’s name written in a distinctive way as a form of identification in authorizing a cheque or document or concluding a letter.’
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."
The ECTA also clarifies that ‘an electronic signature is not without legal force and effect merely on the grounds that it is in electronic form.’
So an e-Signature is slightly different to an ordinary wet-ink signature. The data attached is more important than how it looks as this is used to identify the signatory and show his intent to sign. As long as you have met these requirements the document is considered legally signed and binding. This is achieved by e-signature platforms by recording a full audit trail of the transaction but we will go into more detail on that another time.
So it’s clear that electronic signatures are catered for within South African law (along with many other countries) but as with all things legal, there are exceptions. For certain transactions wet ink signatures are required (eg: sale of property and signing a will) and at times an advanced digital signature is needed but that information is beyond the scope of this post.
We will do our best to provide this information in the future. If you are unsure about how to incorporate e-signatures into your business then contact us directly and we will assist you as best we can or consult your lawyer to ensure you have all your bases covered.
In our next post we’ll look at a few of the more common questions regarding the use of e-signatures and how it can be beneficial to your business.
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All the best
The Quicklysign Team