Legal implications of digital signatures

During the Covid-19 lockdown, estate agents, attorneys, buyers and sellers had to find alternative methods for signing sale agreements and other documents, while face to face meetings were not permitted.

Digital signatures emerged as the ideal solution and many property sales have been concluded in this manner. However, these may be found to be invalid in terms of current legislation.

1. Wet signature

Anything other than a 'wet signature' is precluded under the Alienation of Land Act (ALA) (Act 16 of 1981). However, this is often overlooked at the moment, with many people signing electronically, placing agreements at risk of being invalid. We would love this to change - it would make life so much easier for everyone involved in the sale and transfer of property, even the deeds office can benefit from technological advances. As an ink signature is needed on powers of attorney to pass transfer at the deeds office.

2. Digital signature

A recent article on the Van Deventers Law site says: "According to the Electronic Communications and Transactions Act (ECTA) (Act 35 of 2005), there are various ways of achieving the same level of authenticity and proof of agreement without having to provide a signature in person.

• Draw your signature using a stylus or your finger on devices that allow for this to create a digital signature directly in the document.

• Upload an image of your hand-written signature, which can be converted into a .png file to be placed over the signature line in the document.

• Use your mouse or cursor to draw your signature.

• Type in your signature using your keyboard, then select a font that is most similar to your hand-written signature.

When a contract or agreement stipulates that parties to the contract must provide a signature as proof of agreement and, no further requirements are stated regarding signatures, any of the above-mentioned methods of signing are acceptable. Where it is required by law that a document must be signed by a party, an Advanced Electronic Signature (AES) is required. This is defined in the ECTA as 'an electronic signature which results from a process which has been accredited by the Department of Communication in terms of the ECTA.

3. Exceptions

The ALA states that agreements for the sale of land must be written and signed in ink. This is confirmed by ECTA who stipulates that the use of a digital signature does not apply to agreements concluded in terms of the ALA. Van Deventer Law interprets this to mean that "a buyer is allowed to complete an offer to purchase and sign it in ink before scanning it via email to the seller or estate agent who will then forward it to the seller. The seller is then required to print the agreement and sign it before scanning it and sending it back to the agent. Standard rules regarding counteroffers will apply."