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.
