Electronic signatures and the sale of immovable property

The Electronic Communications and Transactions Act, 25 of 2002 (the ‘Act”) defines an electronic signature as data – “an electronic representation of information in any form”, which is attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as his signature in an electronic environment.

The Act and our case law allow agreements concluded by exchanging emails, WhatsApp and SMS.

Section 4(4) of the Act does not allow digital signatures for use, amongst others, in the execution of a will or in an offer to purchase immovable property, stating that “this Act must not be construed as giving validity to any transaction mentioned in Schedule 2”. Schedule 2 lists various transactions that may not be concluded electronically, namely:

  • Agreements for the sale of immovable property.
  • Long-term leases of land exceeding 20 years.
  • A will.
  • Bills of exchange (one cannot have an electronic cheque).

Thus, a Deed of Alienation for the sale of immovable property still has to be physically signed in “wet ink” (where a signature is manually signed, using the liquid ink of a pen).

In Borcherds v Duxbury the court heard a dispute over whether or not a digitised photograph of the Seller’s original “wet signature” and initials, imported into software known as DocuSign, actually validated the Seller’s acceptance of an offer to purchase. The judge found that it did.

This judgment conflicts with the legal position set out in section 4(4) of the Act. Instead of giving clarity and guidance, the judgment introduces doubt and uncertainty on the validity of electronic signatures to sell immovable property.

Until the law changes, a Seller and Buyer should sign offers to purchase in wet ink to avoid any doubt.

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