Jun 27

The Validity of Electronic Signatures

The Fiduciary Institute of South Africa Recently Published this Interesting Court Case

The plaintiff (F) claimed the return of a 2016 model BMX X5, as well as damages resulting from breach of the purchase and sale agreement between them by the defendant (G).

F’s case was that G purchased the BMW and that a proper purchase and sale agreement was concluded, complying with the provisions of the National Credit Act, 34 of 2005, specifically section 129(1)(a). The purchase price of more than R1.5m was to be paid in 72 instalments of over R17,000 per month, with a balloon payment at the end. Despite the vehicle having been delivered, G later stopped paying the monthly instalments.

G’s defence was that he never entered into the agreement which was signed online or electronically, and that the agreement did not comply with the provisions of section 13 of the Electronic Communications and Transactions Act, 25 of 2002 (ECTA). G alleged that his (now deceased) brother-in-law, A, abused his personal details and ID document to conclude the agreement with F.

In evidence two witnesses testified on behalf of F and both insisted that the processes they followed leaves no room for any misunderstanding or any abuse of the process of electronically signing the agreement. G did not produce any supporting evidence to his claims that A concluded the contract.

The court (Molahehi J) held that beyond G’s allegations about A’s conduct there are no further supporting facts for this version and that the probabilities also favour F’s version, as G kept on paying the instalments until eight months after A’s death. The process for the electronic signing of the agreement complied with the provisions of sections 12 and 13 of ECTA, and the recording of the telephone conversation during which the contract was entered into complied with section 4 of the Regulation of Interception of Communications and Provision of Communication-Related Information Act, 70 of 2002 (RICA).

The court ordered the agreement to be cancelled and G to return the BMW to F. The determination of the damages to be paid by G was postponed until after the vehicle was recovered, evaluated and sold.


The judgement deals with a contract which was concluded without a signature “in wet ink”, but which falls under the provisions of ECTA. Members are reminded that bills of exchange, agreements for the sale of immovable property, agreements for the lease of immovable property exceeding a term of twenty years, and wills (the execution, retention and presentation thereof) cannot be done electronically under the provisions of ECTA and has to be in writing in hard copy.