Overview of electronic signature law and its legality in South Africa
Wouldn’t it be great if you could just sign your documents in a couple of clicks and allow your customers to do the same? Why, of course! It’s evident that the use of electronic signatures speeds up your sales process and saves you a ton of money.
In fact, most companies spend upwards of $80 per employee per year on paper alone. And that figure doesn’t include additional materials needed to print like ink cartridges and printer maintenance. An eSignature tool can eliminate these costs once and for all.
So what exactly are eSignatures? An electronic signature is your John Hancock made with specific digital software or electronic device. You’ll also usually include the initials and full name along with the signature of the signatory. eSignatures are aimed at authenticating agreements, documents, transactions, and other legal papers without using a physical pen or wet-signature.
eSignature legality summary
Electronic signatures in South Africa are approved under The Electronic Communications and Transactions Act (ECTA) instituted in 2002. The South African law adheres to the EU Directive on electronic signatures. Any company operating in the South African market can use eSignatures as a signing method, and they are treated equally as handwritten signatures. Still, there are some critical restrictions determined by the South African law system.
More importantly, the eSignature law in South Africa does not imply mandatory signing of contracts to make them valid. The agreement is enforced when two or several parties agreed on terms orally, in writing, or electronically. However, an electronic signature is a must if you need to provide evidence in court.
Let’s summarize the points mentioned above:
Can I use eSignatures for business in South Africa?
Yes, you can sign your documents without ink and pen in almost all business-related cases.*
Are eSignatures court-admissible in South Africa?
Yes, an eSignature can act as either full-fledged or partial evidence in court depending on its level of assurance.
What is the legal model of an eSignature in South Africa?
South Africa common law uses the two-tiered legal model and assigns electronic signatures the same status as hand-written ones.
* The list of exceptions will be provided in one of the next paragraphs.
Types of an electronic signature in South Africa and their use case
The Electronic Communications and Transactions Act regulates the kinds of electronic communications and transactions in South Africa by common law. There are two levels of assurance with different requirements. Let’s take a closer look at the existing types of eSignatures.
1st Level of Assurance: Standard Electronic Signatures
According to ECTA, a standard electronic signature (further referred to as SES) is ”data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature.” SES may be a scan of the signatory’s handwritten signature or be drawn using digital tools. It serves as evidence that parties reached an agreement if no other requirements are specified.
The electronic signature law recognizes SES as valid if it:
- Identifies the signatory (or the document’s sender) and indicates his/her approval of the information contained in the document
- Is appropriate for the document at the time of signature
- Is time-stamped
Standard electronic signatures (SES) are the most widely used eSignatures when it comes to business purposes. These types of signatures are also the most unreliable method to verify the document due to relatively high risks of counterfeit.
The most common use cases of SES are:
- HR documents (employment contracts, privacy notices, non-disclosure agreements, etc.)
- Short-term real estate documents (lease agreements for residential and commercial real estate lasting less than 20 years)
- Consumer agreements (new retail account opening documents, order confirmations, purchase offers, invoices, etc.)
- Commercial agreements between corporate entities (non-disclosure agreements, sales & distribution agreements, procurement documents, invoices, etc.)
2nd Level of Assurance: Advanced Electronic Signatures
An advanced electronic signature (often referred to as AES) is an SES verified by an accredited authority. These types of signatures have a higher level of credibility due to the compliance with the specific requirements. AES should be:
- Uniquely linked to its signatory and be able to identify him/her
- Created under the sole control of the signatory
- Based on the face-to-face identification of the signatory
- Protected in such a way that it is possible to notice any change of the data or data message contained in the document
The Electronic signatures law in South Africa specifies the AES as a type of signature required in the following cases and documents:
- A suretyship (General Amendment Act, 1956)
- Signing as a Commissioner of Oaths (Justices of the Peace and Commissioners of Oath Act, 1963)
Also, ECTA outlines the cases when documents can’t be verified with an electronic signature. They are:
- Contracts for transfer or sale of immovable property (sectional titles and mortgage bonds)
- Wills and codicils
- Bills of exchange
- Deeds and long-term leases for a period of more than 20 years
- The license of intellectual property, employee invention agreements, and IP transfers
- All mentioned documents above should be signed by hand with a physical wet signature.
PandaDoc and eSignature law in South Africa
PandaDoc is among the most advanced software which offers numerous features to improve paperwork. About 9,000 companies worldwide have grown their business and sales processes with our help. For instance, Bonusly saved 3 hours per week per employee and reduced their document creation time by 70%. The use of PandaDoc eSignatures played a vital role in their team’s success.
Even though electronic signatures have been recognized in a majority of countries, electronic signature laws vary from country to country, so you should ensure that civil law in South Africa allows you to utilize eSignature technology.
PandaDoc electronic signature technology meets the requirements of eSignature laws in 42 countries including South Africa. Apart from providing clients with eSignature solutions, PandaDoc also simplifies the creation of the documents themselves. Effortlessly craft proposals, contracts, quotes and even non-disclosure agreements with an electronic signature of your choice (you can use both SES and AES).