Contact Us

Please leave this field empty.

Kudos/Complaints

What is the legal effect of sending an SMS, instead of a letter, fax or email, to give notice or enforce a contract?

A colleague of mine, Andrew Marshall, of Dingley Marshall Attorneys, wrote this most interesting article: http://www.dingleymarshall.co.za/notice-sms-law/, which he’s happy for me to share.

A “data message” like an SMS has the same status in law as a letter or other “real world” medium of communication. Although there is nothing in law to prevent using SMS, we would recommend avoiding it for anything important, because of the problem of proving receipt.

“We have all received SMSes from businesses offering their services to us. Often when these messages are unsolicited we consider them to be spam and block the number, or even complain to WASPA or perhaps the DMASA about them. But if we are in a commercial relationship with one of these businesses, can they use SMS to send us notice or to enforce a contract?

The General Rule

As a general rule the law recognises “data messages” (as they are called) such as SMSes as if they were in “written” form. As section 11(1) of the Electronic Communications and Transactions (ECT) Act puts it, “Information is not without legal force and effect merely on the grounds that it is wholly or partly in the form of a data message.”

If the law requires that a document or information be in writing, then that requirement is met if a data message is used, and the data message is “accessible in a manner usable for subsequent reference” (s 12 of the ECT Act).

This means that a “data message” like an SMS has the same status in law as a letter or other “real world” medium of communication.

So far so good, but does that mean that a business can send notice of breach if I haven’t paid my monthly account for example? Well that, as lawyers are fond of saying, depends. If the law has particular requirements for notice, then those requirements will trump the general law that the ECT Act sets out.

Before delving in into the detail, let us quickly look at receipt of SMSes. How can a sender show that an SMS has been received? Under the ECT Act it would probably be sufficient to show that the SMS has been received by the recipient’s mobile network service provider and can be accessed by the recipient. There is no case-law on this so this interpretation is not certain, and given that the mobile network service providers can be sticky about providing access to their logs, proof would be an issue. On an alternative interpretation one might need to show that an SMS has been downloaded onto the recipient’s cellphone, but this of course presents the same problem. The sender could certainly keep its own record of SMSes that it has sent, or it could draw logs from its OWN mobile network service provider to show transmission, but it could battle to prove receipt.

With that in mind let us examine a few areas of law.

Requirements of the National Credit Act

If the National Credit Act (NCA) applies to the underlying contract, such as a loan or a hire-purchase agreement, a credit provider wishing to enforce the contract must deliver a notice to the consumer setting out the consumer’s default and drawing the consumer’s attention to his or her rights. This letter of demand needs to comply with section 129 of the NCA, which prescribes the form and content of letters of demand for credit agreements.

Section 129 letters must be delivered to the debtor by the creditor, or an attorney acting on his/her behalf, before any legal proceedings can commence. Failure to do so is fatal to any legal proceedings where credit agreements are concerned. The letter itself must be delivered to the debtor at an address set out in the original credit agreement, or subsequently provided to the credit provider.

The NCA is silent on what medium should be used to deliver the document however. The available case-law deals with delivery by registered letter. If notice is not sent by registered mail, the NCA stipulates that notice has only been properly served on a debtor when it has been delivered to that person. However it is difficult to prove delivery of an SMS, as we discuss above. As a result, SMS is probably not an appropriate medium for delivery of these letters.

Delivery of any other document that must be provided to the debtor is dealt with under section 65 of the NCA. While the listed mechanisms include email, SMS is not included. Therefore, it appears that the NCA does not recognise SMS as a valid delivery method for these documents.

Note however that the NCA specifically states that “statements of amount owing” and “statements of settlement amount” CAN be sent by SMS.

Consumer Protection Act

Attorneys drafting the “notices” clause of an agreement normally state that notice is deemed to have been received by a party under certain circumstances. So for example if a notice is sent by registered post it could be deemed to have been received five days after posting, or if faxed it may be deemed to have been received on the date of transmission. This removes the necessity of proving receipt.

If the Consumer Protection Act (CPA) applies to an agreement, and the agreement is with a natural person (as opposed to a company for example) then it is presumed to be an unfair contractual term if a supplier deems that a consumer has received a communication, unless that communication is sent via registered post.

As a result if the CPA applies to a transaction, a supplier can certainly send a consumer an important notice via SMS if it really wants to, but it cannot assume that the consumer has received that notice. The supplier would have to prove receipt, which can be awkward.

General Contractual Notices

Note that the above is by no means an exhaustive treatment of the law. For example we have not examined the law relating to short-term insurance. However if a supplier wants to send you notice by SMS and the agreement is not covered by the NCA or the CPA, or any other relevant statute that we have not covered, then the position would be as follows.

The supplier can certainly send you notices in terms of the agreement between you, or even terminate that agreement using SMS if the agreement specifically allows it to. If the agreement deems the recipient to have received an SMS once it is sent, then the supplier would not have to prove receipt of the SMS.

If the agreement does not say when an SMS is deemed to be received, however, the supplier would have to prove receipt. As a result we would recommend that SMS not be used for any important contractual notice.

What if there is no written contract, or the contract does not mention SMS as a medium? There is nothing in law to prevent using SMS, but we would recommend avoiding it for anything important, again because of the problem of proving receipt.

Can invoices be sent by SMS? This is a bad idea for two reasons. The first is once again the problem with proving receipt. The second is that SARS has particular requirements for VAT invoices which an SMS does not meet.

There is no reason why a statement of account sent by SMS would not be acceptable, however.

Dismissal by SMS

As an extra titbit, can your boss fire you by SMS? There is certainly case-law to the effect that a notice of resignation sent by SMS is valid, and it seems that this would also apply to notice of termination sent by an employer. Naturally this assumes that the other requirements set out in our labour law have also been met.”


[]
1 Step 1
Was This Article Helpful?
pick one!
Name
Previous
Next
powered by FormCraft

Contact Us

CONTACT US

Tel: +27 (0)11 646-0335
Email: info@bmalaw.co.za

Bregman Moodley Attorneys Join Mailing List
Bregman Moodley Attorneys Newsletter Archive
Bregman Moodley Attorneys Join Mailing List
Show Buttons
Hide Buttons