THOUGHT OF THE WEEK Can one sign a sale agreement of land electronically?

In times often described as the “digital era” and with present quarantine measures making signing of contracts in the presence of both parties particularly difficult, many people ask whether a sale agreement of land can be signed virtually, in other words, with a digital signature. The answer is no – but see below.

The Electronic Communications and Transactions Act (ECTA) allows for the following:

(i) It is generally in order to conclude agreements via electronic communications. For example, you can enter into a valid and binding agreement to sell your laptop or enter into a lease agreement via email if:

- the correspondence clearly indicates the terms of the agreement;

- there is an intent to come to a binding arrangement;

- and the relevant emails clearly belong to and is sent by the parties involved.

(ii) Should there be a statute in place requiring signature before a document will be considered legally valid, but the statute does not specify that the signature must be in writing, ECTA dictates that an advanced electronic signature (AES) may be used. (An AES is a special ‘electronic’ signature – a scanned image of a handwritten signature, or ‘digital’ signature – which, in certain instances, may replace the traditional pen and ink manner to sign documents. In order to use such a signature on a document, one first has to have the AES accredited with an accreditation authority in South Africa.)

(iii) If by law it is specifically stated that a written signature is required, an AES will not suffice (e.g., the assignment of copyright in terms of the Copyright Act, which that Act requires to be in writing). Certain agreements are however specifically excluded from the above, importantly, agreements concluded in terms of the Alienation of Land Act.

This does not exclude the signing of a sale agreement with the use of email. For example, if A was to make an offer to buy B’s property, A can print the offer, sign it in pen; scan and email it to B. If B accepts the offer, he can print the offer, sign the offer in acceptance and scan the signed agreement back to A. Thereby a valid and binding agreement of the sale of land is concluded.