Contract Non-Variation Clause

Is cancellation of a contract by email valid?

The tenant of leased premises purported to cancel a lease through the exchange of emails. A non-variation clause in a lease required that cancellation be in writing and signed by parties.

Then landlord sought and was granted an interdict by the High Court in that the emails did not comply with section 13(1) of the Electronic Communications and Transactions Act 25 of 2002 (the ECT Act) because the section requires an advanced electronic signature to be used on an email when a signature is required by law – as specified by the non-variation clause in this case – and no such signature appeared on the emails.

On appeal, the SCA in Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and another had to decide if cancellation by e-mail was valid. It held that Section 13(3) of the ECT was applicable as the typewritten names of the parties at the foot of the emails, which were used to identify the users, satisfied the requirement of a signature and had the effect of authenticating the information contained in the emails.

The real dispute was whether the names of the parties at the foot of their emails constituted signatures as contemplated in sections 13(1) and (3).

The Act distinguishes between instances where the law requires a signature and those in which the parties to a transaction impose this obligation upon themselves. Where a signature is required by law and the law does not specify the type of signature to be used, section 13(1) says that this requirement is met only if an “advanced electronic signature” is used. Where, however, the parties to an electronic transaction require this but have not specified the type of electronic signature to be used, the requirement is met if a method is used to identify the person and to indicate the person’s approval of the information communicated. In this case, the non-variation clauses were agreed upon by the parties and were not imposed by law. Having regard to the purpose for which an advanced electronic signature was required, it was apparent that it did not apply to the private agreements between these parties. The Court held section 13(1) to be inapplicable and section 13(3) to be applicable. The typewritten names of the parties at the foot of the emails, which were used to identify the users satisfied the requirement of a signature and had the effect of authenticating the information contained in the emails.

The appeal was upheld with costs.

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