“It makes no difference whether that operator writes… with a steel pen an inch long attached to an ordinary pen holder, or whether his pen be a copper wire a thousand miles long. In either case the thought is communicated to the paper by use of the finger resting upon the pen: nor does it make any difference that in one case common record ink is used, while in the other case a more subtle fluid, known as electricity, performs the same office”– Justice Sargent
Traditionally, a signature is understood as a uniquely stylized and undeniable depiction of one’s name marked on a paper with ink (wet signature). What is lost in this understanding is that a signature invokes within it, a process, and that the process serves specific purposes.
The United Nations Commission on International Trade Law stipulates three functions of a signature : it identifies the signatory to the document (identification function), ascertains the involvement of the person executing the document as well as their authority and capacity (evidentiary function) and attributes the involvement of the signatory to the process and their authentication of its contents (attribution function).
The advancement of technology and globalization have fashioned the rapid growth of e-commerce where transactions and contracts are concluded electronically. This in turn raises legal questions on the validity of electronic signatures (e-signatures).
The Electronic Communications and Transactions Act 25 of 2002 is aimed at facilitating and regulating the use of electronic communication and transactions in South Africa. The ECTA defines an electronic signature as data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature.
The European Commission defines an e-signature as an electronic indication of an intention to agree with the contents of a document or set of data to which the signature relates as well as the signatory’s intent to be bound by the terms of that document.
There are 3 types of e-signatures: standard electronic signatures (SES), advanced electronic signatures (AES) and qualified electronic signatures (QES). The ECTA only specifically refers to standard electronic signatures and advanced electronic signatures.
A standard electronic signature (SES) is data in electronic form which is logically attached to or associated with the other data and intended to be a signature. This includes email signatures, scanned signatures or signatures drawn using digital tools. A valid standard e-signature must be time stamped, must identify the signatory or sender and must indicate their approval of the contents of the document.
The ECTA provides that a standard e-signature can be used for documents where no other legal requirements are specified for the execution of the document for instance, in short term lease agreements, employment contracts, non-disclosure agreements, invoices and procurement documents.
In Spring Forest Trading 599 CC v Wilberry, the court stressed the importance of differentiating between a situation where the law requires a signature (where an advanced e-signature must be used) and a situation where parties between themselves add the formality of a signature (where a simple e-signature would be valid). The issue in this case was whether the cancellation of a written contract via email fulfilled the requirements contained in the ECTA. The agreement between the parties contained a non-variation clause providing that no variation or consensual cancellation would be effective unless reduced to writing and signed by both parties. The SCA held that a written agreement can be cancelled via email.
The ECTA defines an advanced electronic signature (AES) as an e-signature which results from a process that has been accredited by the South African Accreditation Authority in terms of Section 37 of the ECTA. This definition is vague, however, it reveals that the intention of the legislature was that an advanced e-signature must fulfil additional requirements to those of a standard e-signature.
A valid advanced e-signature must be uniquely linked to and capable of identifying the signatory, must be created in a way that is under the control of the signatory and it must be linked to the document in such a way that any changes to the data are detectable. The most commonly used technology able to provide these features is the use of a public-key infrastructure (PKI), which involves the use of certificates, cryptographic keys and biometrics signatures and authentication OTPs. An advanced e-signature therefore confirms the security and integrity of the document.
The ECTA provides that an advanced e-signature must be used in the following circumstances:
- where a law requires that an agreement or document must be in writing and signed, but does not specify the type of signature to be used;
- where a law requires information to be presented or retained in its original form;
- where the parties have agreed that an advanced electronic signature will be used;
- where a law requires a document to be sealed, notarised, acknowledged, commissioned under oath or certified.
A qualified electronic signature (QES) possesses the same characteristics as an advanced e-signature and is the electronic equivalent of a wet signature. It is created by a qualified signature creation device and is based on a qualified certificate for e-signatures.
The ECTA is a brilliant piece of legislation which is in tune with e-commerce, unfortunately, the Act discordant with dinosaur provisions in several statutes which are insistent on the continued use of wet signatures.
The use of e-signatures is precluded in the execution of wills and other testamentary writings, in contracts relating to the alienation of immovable property, in long term lease agreements in respect of immovable property in excess of 20 years, in the execution of bills of exchange such as cheques and in agreements pertaining to intellectual property (license of intellectual property, employee invention agreements, and intellectual property transfers). Further, although the ETCA provides for the commissioning of documents under oath using advanced e-signatures, the Regulations to the Justices of the Peace and Commissioners of Oaths Act provide that a deponent shall sign the declaration in the presence of the commissioner of oaths.
Section 13(2) of the ECTA provides that the use of an e-signature on a document does not automatically render that contract or document invalid. There is a rebuttable presumption in our law that an e-signature is regarded as valid and as having been applied properly.
In common law, for a signature to be valid; the name or mark of the person signing must appear on the document, the signatory must have applied it personally (or through a duly authorized agent) and with the intention to sign the document. A signature denotes the signatory’s intention to endorse the contents of the document as well as their intention to be bound by the contents of the document and the legal consequences which might flow from the execution of the document. That intention is not diminished by the use of an e-signature.
In Howley v Whipple, the court recognized that a signature is an expression of intent, and its legal validity is not strictly based on whether such signature was made via ink on paper. In Barwick v Government Employee Insurance Co, the court noted that if a law requires a record to be in writing, an electronic record would satisfy that legal requirement.
The major recurring concern on the use of e-signatures is that e-signatures obliterate the certainty as to the identity of the signatory. The overreliance on ink and paper is inflated as advanced e-signatures can be more secure than wet signatures. Advanced e-signatures confirm the security and integrity of the document while identifying the signatory. E-signatures can be verified with an audit trail and their use reduces both hard and soft costs while increasing efficiency and decreasing the carbon footprint through automated workflow. More so, documents which are uploaded to an e-signature service with digital signatures are protected from alteration.
Before ink and paper, signatures were set in stone and clay tablets. It is time that archaic provisions in certain legislation which insist on the use of wet signatures are amended to be in harmony with the ECTA. The development of human civilization is not static, it is a process. Every facet of human life evolves, changes, adapts, improves and enhances. The world is going paperless… so should the signatures.
Sources: Howley v Whipple 48 N.H. 487 (N.H. 1869); Barwick v Government Employee Insurance Co 2011 Ark. 128 (Ark. 2011); Spring Forest Trading 599 CC v Wilberry 2015 (2) SA 118 (SCA); Massbuild (Pty) Ltd t/a Builders Express, Builders Warehouse and Builders Trade Depot v Tikon Construction CC and another  JOL 48548 (GJ); Regulation (Eu) No 910/2014 Of The European Parliament and of the Council on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market and Repealing Directive 1999/93/EC
This will always be my favorite