COVID-19 has had a ripple effect throughout the business world. The international travel ban has also had a significant impact on travelling and in turn, the conclusion of commercial transactions. Has COVID-19 attributed to the death of the wet signature? Many business owners are now opting for electronic signatures in order to conclude commercial transactions on a global scale.
In light of this, the legality of the electronic signature must be understood. First and foremost, we need to understand that in commercial practice, the function of a signature is to provide evidence of the following:
- the identity of the signatory,
- that the signatory intended the signature to be his signature, and
- that the writing or text to which the signature is associated is adopted or approved by the signatory.
There is currently no legal framework in the Kingdom of Lesotho that regulates electronic communications, i.e. electronic and digital signatures. In the circumstances, the common law position will prevail.
In terms of the common law of Lesotho a distinction is drawn between:
- contracts in which it is a legal requirement for the contract to be in writing and duly signed by the parties concerned; and
- contracts where no such legal requirements exist
In the absence of legislation in Lesotho, the South African position is generally consulted. The South African position maintains that an electronic signature will be sufficient to meet the requirements where a contract must be in writing and signed. Therefore, there will be no need for such a contract to be in writing and duly signed. The parties, therefore, have the freedom to agree pertaining to the requirements, formalities and production of electronic communications.
Furthermore, electronic signatures will be valid provided that the signature is specific to the person signing. That requirement can be satisfied by a message from that person’s computer which includes a scan of their signature or simply adding a typed name, provided it is intended by the person to serve as a signature and acceptance of the content of the message. A contract signed in this way, will be valid and enforceable.
The courts in Lesotho will give evidential weight to a data message and, in such instances, the court will have regard to the following:
- The reliability of the manner in which the data message was generated, stored or communicated;
- The reliability of the manner in which the integrity of the data message was maintained;
- The manner in which its originator was identified; and
- Any other relevant factors.
In light of the fact that the parties have the freedom to contract and agree as to the requirements and formalities to be met in order to make use of electronic communications between them we would advise that the parties contractually agree to follow the same rules as set out in the legislation governing electronic communications within the Republic of South Africa.
The parties can agree to make use of an advanced electronic signature in this regard. Such a signature will be regarded as an advanced electronic signature provided that the following requirements are met:
- The signature is uniquely linked to the user;
- The signature is capable of identifying that user;
- The signature is created using means that can be maintained under the sole control of the user;
- Will be linked to the data or data message to which it relates in such a manner that any subsequent change of the data or data message is detectible; and
- The signature is based on the face-to-face identification of the user.
In the event where the parties are not willing to agree to the use of an advanced electronic signature it is our opinion that in order to ensure the validity of the electronic communications the following minimum requirements will have to be met:
- A method is used to identify the person and to indicate the person’s approval of the information communicated; and
- Having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purpose for which the information was communicated.
In collusion, E-commerce has given us the ability to conclude agreements electronically and this has paved the way for the commercial world to carry on without any restrictions.
This article was written by Albertus Kleingeld. Albertus is a director at Kleingeld Mayet. He regularly acts as a litigator in the High Court and advises on commercial and corporate matters including the formation of corporations. Albertus has acted for a wide range of clients that include multinational-corporations, government institutions, non-governmental organizations, private individuals, listed and unlisted companies. Her experience stretches across corporate, commercial, company and cannabis law in various sectors both in South Africa and Lesotho.