Page 39 - Q&A
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Electronic signatures – valid or fantasy?


            May 2020
            “In my business I have a lot of business contracts that need regular updating
            and amendments. Under the lockdown, things have been quiet, but now that
            my clients are re-opening their businesses the request for new contracts and
            updates are flowing in again. Many of my clients are still not prepared to meet
            personally  to  sign  or  are  in  other  provinces  which  makes  physical  signing
            difficult. I can courier the contracts, but it gets cumbersome and expensive and
            I’m looking into electronic signing but am unsure as to how valid a contract   Commercial
            signed electronically is?”

            The Covid-19 pandemic has highlighted the growing demand for e-commerce
            and accompanying electronic solutions to doing business. Entering, amending
            and  changing  contracts  are a  vital part of  any economy and  traditional
            approaches to contracting does not align well with a more electronic orientated
            business environment where people want to work and do business from
            anywhere, anytime and on any device. Hampering this by limiting contractual
            arrangements to physical interactions makes no sense and the law needs to
            follow suit to enable contracting to also be more ‘mobile’. But has it?
            A common misconception regarding contracts is that they must be in writing
            to be binding and valid. Our law does not generally require special formalities
            for concluding enforceable contracts and a contract does not need to be
            in writing and signed by the parties to be legally valid. There are exceptions
            which may require formalities for certain types of contracts such as, for example,
            suretyship agreements, leases with a duration of more than 10 years, sale of
            immovable property etc.
            On the other hand, verbal contracts are simple and convenient, especially
            when parties cannot meet face to face. But verbal contracts are difficult and
            complicated to enforce in the event of a dispute as there is generally no clear
            record of the agreement details. One way to overcome this is to have a recording
            of the verbal agreement, but again it must be clear who the parties are and
            the recording will need to be carefully stored for use in the event of a dispute.

            So, is just writing down the terms of an agreement sufficient, or must it be signed?
            Again, if not signed, it becomes difficult to prove that an agreement or the terms
            were intended between the parties. As such, an unsigned agreement has little
            purpose as the act of signing the final version of a contract creates certainty
            as to the provisions the parties agree to be bound to. So, if signing is a good
            thing, do I need the original signed version of the contract for it to be valid?

            There is still a general misconception that only an original handwritten
            signature on an original document is valid. This is not the case. Copies of
            electronic  contracts,  faxed  and  e-mailed  versions  of  contracts,  as  well  as





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