Legal recognition of electronic documentation

Compli-Serve

The Electronic Communications and Transactions Act 25 of 2002 (ECT Act), as amended, does not compel anyone to use or receive information in electronic form, nor does it prohibit anyone specifying requirements for the manner in which they will accept data messages. The ECT Act may therefore not discriminate between papers and electronic documents. Effectively, the ECT Act does not create new ways of doing business; it only facilitates and gives legal recognition to the new ways of doing business, i.e. through electronic documentations.

Section 11 - Legal recognition of data messages

Information that is wholly or partly in the form of a data message is not without legal force and effect merely because of the fact that it is in the form of a data message.

‘Data message’ is data that is generated, sent, received or stored by electronic means and includes voice where the voice is used in an automated transaction and a stored record. ‘Data’ means any form of electronic representations of information.

Information can be incorporated by reference, provided that such information is referred to in a way in which a reasonable person would notice such reference and incorporation and provided further that such information is accessible in a form in which it may be retrievable and stored, whether electronically or in the form of a computer printout.

Please note:
Not all information in the form of data message or referred to in a data message will be given legal force and effect, since s 11 is not intended to override any mandatory provisions in South African law relating to data messages.

Section 12 - Writing

A requirement in law that a document or information be in writing is met if the document or information is in electronic format that is accessible in such a manner that the person retrieving it would be able to use it afterwards.

Generally, all documents and agreements that previously had to be in writing can be generated electronically, except the following:

• Agreements for the sale of immovable property
• A long term lease of immovable property for 20 years or more
• The execution, retention and presentation of a will or codicil
• The execution of a bill of exchange
• Documents/agreements, which by agreement between the parties may not be generated electronically

Le Roux v Hon Magistrate Mr Viana (2007) SCA 173 (RSA): The Supreme Court of Appeal found that judicial notice should be taken of the technological advancements regarding electronic data creation, recording and storage. The SCA also referred to and quoted s 12 of the ECT Act.

Section 13 - Signature

The effect of this section is to give legal recognition to electronic signatures. However, where the law requires a signature, only an advanced signature shall be used. An advanced electronic signature is an electronic signature that can be authenticated only by an agency that has been accredited by the Department of Communications in terms of s37 of the ECT Act.

Where contracting parties failed or neglected to agree on the electronic signature to be used, the presumption is that the requirement of a signature is met if a method is used to identify the person (who has purportedly ‘signed’ the electronic communication) and to indicate such person’s approval of the message. Such an expression of intent can be made by any means from which such person’s intent can be inferred.

The Law Commission said in September 2019 that documents signed electronically – even when a statutory requirement for a signature predates the digital age – have legal force. A Law Gazette report notes that, in the final report of a government-commissioned study of the law concerning the electronic execution of documents, the commission states that in 'most cases', electronic signatures can be used as a viable alternative to handwritten ones. The conclusion emerges in a 124-page study of statute, common and case law. Businesses and individuals already sign millions of contracts electronically every day, from doorstep delivery receipts to multi-million pound currency deals. Despite this, the commission says some parties still have doubts over whether an electronic signature can be used in particular situations. However, the commission dashes hopes at the more gung-ho end of the digital community that remote witnessing, for example over video links, would be valid. 'Our view is that the requirement under the current law is that a deed which must be signed "in the presence of a witness" requires the physical presence of that witness,' it states. The commission also said the government may wish to consider codifying the law on electronic signatures in order to improve the accessibility of the law.

Section 14 - Originals

For purposes of this provision, it should be noted that a computer printout of an ‘original’ electronic document does not constitute an original. An original message remains in electronic form, and it is the first generated copy by the sender or an agent of the sender.

Section 16 - Retention

How documentation is to be retained for those institutions required to keep documentation electronically:

• Accessible so as to be usable for subsequent reference; and
• retained electronically in the format in which it was generated, sent or received, or in a format which can be shown to accurately represent the information generated, sent or received; and
• the origin, destination, date and time sent and received is recorded/retained.

Section 22 - Formation and validity of agreements

The mere fact that an agreement was concluded wholly or partly through data messages does not imply that such an agreement will be without legal force and effect.

The time and place of formation of an agreement, concluded through data messages, will be the time and place where the offeror receives the acceptance of the offer.

Section 23 - Time and place of communications, dispatch and receipt

There is a presumption that a data message has been sent when it enters an information system outside the control of the originator. If the originator and addressee are using the same information system, the presumption is that the message has been sent when it is capable of being retrieved by the addressee.

• A data message must be regarded as having been received by the addressee when the complete data message enters an information system designated and used for that purpose by the addressee and is capable of being retrieved and processed by the addressee.
• A data message must be regarded as having been sent from the originator's usual place of business or residence and as having been received at the addressee's usual place of business or residence.

Please note:
These above deeming provisions apply only if parties involved have not agreed otherwise.

Practicalities of the Act

Business needs to make sure that all client communications, online advertisement and notices comply with the requirements for 'legal' spamming as per the Act.

Business needs to be mindful of which types of databases the Minister will declare as being a critical database. They will then be required to comply with the requirements specified by the Minister for the storage and management of such databases. They will also be required to register such databases and supply the details of the administrator of the database.  (See ss 53 and 54)

Business who wish to store information or company documents, which are required by law to be stored, in electronic format can do so, provided that they comply with the requirements for storage of electronic data.

Business must assess their risk very carefully before they toss out all paper documentation, because: 

• It is not clear from the wording of the Act that where an original is paper based and then is converted to an electronic form and such 'original' is required to be kept in terms of a law, that the requirements of that law is fulfilled by retaining the electronic version only.
• In some cases, such as with cheques or claims forms or the like which require an original signature, where such documents are signed in handwriting, it may be prudent for the business to retain the original paper-based document for use in subsequent litigation proceedings, where it may be necessary to carry out forensic examination of the actual signature for example, to prove forgery.

This summary highlights the most important sections around the legal recognition of electronic documentations and the practical implications in terms of the ECT Act.

This summary is intended to provide general guidance and does not constitute advice relating to specific instances.

An interesting article entitled 'Best practices in document and record compliance' can be accessed here.