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March 03, 2015

You can cancel an agreement via the exchange of emails

Cancellation of contract using electronic signature
In Spring Forest Trading CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA) (check out the reported judgment here) the Supreme Court of Appeal had to consider an appeal that concerned a series of emails purporting to consensually cancel written agreements between the parties.

The agreements required any ‘consensual cancellation’ to be in writing and signed by them. The Electronic Communications and Transactions Act 25 of 2002 (the Act) gives legal recognition to transactions concluded electronically by email. The dispute between the parties requires us to consider whether their exchange of emails met the writing and signature requirements of the Act thereby constituting a consensual cancellation.

A non-variation clause provided for the cancellation and alterations of a contract to be in writing and signed. In issue was whether the typewritten names of the parties at the foot of an email [cancelling the agreement] constituted valid signatures in the circumstances. Electronic Communications and Transactions Act 25 of 2002 (the Act).
The court found that:

The Act describes an electronic signature – which is not to be confused with an advanced electronic signature – as ‘data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature’. Put simply, 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. This description accords with the practical and non-formalistic way the courts have treated the signature requirement at common law.

On that basis, the court found that the exchange of emails did meet the writing and signature requirements of the Act, thereby constituting a consensual cancellation.    
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