Electronic signatures and the sale of immovable property

 

The Electronic Communications and Transactions Act, 25 of 2002 (the 'Act") defines an electronic signature as data – “an electronic representation of information in any form", which is attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as his signature in an electronic environment.

The Act and our case law allow agreements concluded by exchanging emails, WhatsApp and SMS.

Section 4(4) of the Act does not allow digital signatures for use, amongst others, in the execution of a will or in an offer to purchase immovable property, stating that "this Act must not be construed as giving validity to any transaction mentioned in Schedule 2". Schedule 2 lists various transactions that may not be concluded electronically, namely:

·         Agreements for the sale of immovable property.

·         Long-term leases of land exceeding 20 years.

·         A will.

·         Bills of exchange (one cannot have an electronic cheque).

Thus, a Deed of Alienation for the sale of immovable property still has to be physically signed in "wet ink" (where a signature is manually signed, using the liquid ink of a pen).

In Borcherds v Duxbury the court heard a dispute over whether or not a digitised photograph of the Seller's original "wet signature" and initials, imported into software known as DocuSign, actually validated the Seller's acceptance of an offer to purchase. The judge found that it did.

This judgment conflicts with the legal position set out in section 4(4) of the Act. Instead of giving clarity and guidance, the judgment introduces doubt and uncertainty on the validity of electronic signatures to sell immovable property.

Until the law changes, a Seller and Buyer should sign offers to purchase in wet ink to avoid any doubt.

Amending my will

 

A client has recently had a baby and asked me how she goes about changing her will. 

A will ensures that the person that winds up your estate distributes your assets to named beneficiaries after you pass, according to your wishes. 

If there are changed circumstances such as the birth of a child or the death of a beneficiary, you can write a new will or amend the existing will by supplementing your current will with a codicil. 

Codicil 

A codicil is a way to make minor changes to a will but is not appropriate for significant differences when a new will is better. Codicils must be signed by two witnesses, just like a will. 

Amend your will after a divorce. 

The Wills Act provides that if you die within three months of the divorce, a legacy to your divorced spouse will fall away as though the spouse had passed away before you executed the will. 

The Act gives you three months after your divorce to change your will by removing your ex-spouse as a beneficiary and appointing someone else in his place (in a new will or codicil). If you do not, he will inherit, despite the divorce.

 

Can I run a business from a residential property?

A client asked about the pros and cons of operating her business in a residential district. 

What does the law say about running a business from your home in a non-commercially zoned residential area? 

So many people now work from home because of the pandemic. If you are a day-trader, writer, or artist, the impact on the neighbourhood would be negligible. However, if the business is against the law (such as prostitution) or creates a noise nuisance (like an auto-body shop) the impact on the neighbours would be quite objectionable. 

You must check the conditions in your title deed. It may contain a clause like: “this erf shall be used for residential purposes only and no trade or business or industry whatsoever shall be conducted thereon”. 

If so, even If you are a writer working from home, this may be deemed to be a business that falls foul of that restrictive condition. However, it is highly unlikely that a neighbour would complain. 

On the other hand, the court heard an application for an interdict where a construction company opened an administrative office in a suburban area manned from 8 AM to 4:30 PM on weekdays by a staff of four (with the occasional visitor). The judge ruled that “the use or continuation to use the property for any business or trade other than for residential purposes constitutes an illegal act” and granted the interdict, even though the office caused no nuisance to anyone in the neighbourhood. 

To ensure that you can operate your business from a residential property, you must not only look at your title deed but also the zoning.  As a home business operator, you must ensure that the use of the property is in line with the zoning regulations applicable to your property. A Town Planner can advise you if your home-based business complies with your Local Authority’s Municipal Planning By-Laws. Should the property not be zoned for your type of business, the Tow Planner may apply for a rezoning. The process is very longwinded and expensive. 

Without your local authority’s approval for a rezoning of the property, you will not be able to lawfully conduct your business on the property. If you do, you may face a High Court application for an interdict and fines from the local authority.

 

What is the effect of a clause discouraging infidelity in a prenup?

Clients often ask me to include a clause in a marriage contract that will discourage the husband’s infidelity.

General principals

Spouses are generally free to include any provision in their antenuptial contract (ANC). However, the provision may not be contra bonos mores (against the good morals of the public), against nature, reason, public policy, prohibited by any law or purports to take over the powers of the court. Clauses of this nature will be null and void. An ANC may not include clauses that are unreasonable, against public policy or unlawful:

 

• Unreasonable clauses include ones: 

• prohibiting a spouse from working. 

• forcing a spouse to live in a particular area. 

• stating that marital disputes must be referred to arbitration. 

• obliging a spouse to adopt the religion of the other spouse. 

• stating that the parties will not live together as man and wife after the marriage. 

• stating that neither spouse shall have the right to ask for an order of forfeiture or share in the accrual of the other’s estate, following a divorce.

• Against public policy: 

• Clauses enforcing a change of religion, gender or race or prohibiting any association. 

• A clause permitting the parties to commit adultery.

 

• Unlawful: 

• Clauses allowing or forcing a spouse to commit a crime. 

Effect of a clause discouraging infidelity

May an ANC include a clause to deter the husband from being involved in an extramarital affair in the future? 

Case law suggests that one must interpret this type of clause in context. For example, the parties had been divorced before because of the husband’s involvement in extramarital affairs.   

An example of such a clause: 

‘Should it be proven that A be the cause of a future divorce through an extramarital relationship, he will (here reflect an obligation on the husband to give the wife a fixed property, pay her a cash amount, etc.)’ 

The court will enforce this clause as it seeks to preserve the marriage by discouraging another extramarital affair by the husband.

 

Corporate governance – a summary

 

By Welcome Gogobo

Corporate governance is the system of rules, practices, and processes directed and controlled by an organisation or industry.

It essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community.

Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure to increase accountability and facilitate prudent management. Compliance is the process through which companies demonstrate that they have conformed to specific requirements in laws, regulations, contracts, strategies, and policies.

What Is Governance, Risk Management, and Compliance (GRC)?

The overall purpose of GRC is to reduce risks and costs and duplication of effort. It is a strategy that requires company-wide cooperation to achieve results that meet the three essential functions' internal guidelines and processes.

The three elements of GRC are:

·         Governance, or corporate governance, is the overall system of rules, practices, and standards that guide a business. 

·         Risk, or enterprise risk management, is identifying potential hazards to the business and acting to reduce or eliminate their financial impact. 

·         Compliance, or corporate compliance, is the set of processes and procedures that a company has to make sure that the company and its employees are conducting business legally and ethically.

Today's organisations work harder than ever to adapt to a rapidly changing world. They require effective corporate governance that can help them increase their accountability and avoid significant disasters while being more responsive to stakeholder concerns and more transparent with investors. From the technical responsibilities of a board to the nuances of guiding an organisation through contemporary challenges, the corporation gets a comprehensive overview of the role of corporate governance and gains critical insights into the realities of board service. 

The need for compliance documentation

The regulatory context demands a high level of transparency and accountability from all corporate businesses. A rigorous and disciplined compliance process supports and sustains the corporate governance and risk management systems and structures that direct the business activities.

In general, the compliance function must assist in implementing related compliance documents that protect the integrity of the organisation's compliance program and provide evidence that the organisation is compliant with applicable laws, regulations, and program requirements.

In effecting and managing this, one needs a compliance process to implement a compliance risk management whereby a compliance universe is determined, and the applicable laws and regulations are rated, managed, and monitored.

The approach is to roll out the compliance risk approach guided by the phases for its implementation.

These are:

·         Compliance risk identification

·         Compliance risk assessment

·         Compliance risk management

·         And Compliance risk monitoring