IP/IT Law: ECT Act And Sale Of Immovable Property

With the introduction and growing use of digital technology in the business world, the South African Electronic Communications Act was enacted in 2002.  The main object of the Electronic Communications and Transactions Act (ECT Act) is to facilitate electronic communications and transactions.  In terms of section 12 of the ECT Act, the lawful requirement that documents or Information must be in writing is met if these documents or Information are­:

  • in the form of a data message; and
  • accessible in a manner usable for subsequent reference.

Section 13 provides for the legal use of an electronic signature. Subsection (1) specifically states that where the signature of a person is required by law, and such law does not specify the type of signature, this requirement in relation to a data message is met only if an advanced electronic signature is used.

This essentially means that contracts concluded electronically will have legal force. This includes agreements concluded online, via email communication, and where a contract is executed through the  use of an electronic signature.

However, the ECT Act has a couple of exceptions.  Included in the exceptions are transactions governed by the Alienation of Land Act 68 of 1981.  Section 4 of the ECT Act sets out the sphere of application of the act, and section 4(3) explicitly states that provisions of the ECT Act do not give validity to the following transactions –

  • An agreement for alienation of immovable property as provided for in the Alienation of Land Act, 1981 (Act No. 68 of 1981).
  • An agreement for the long-term lease of immovable property in excess of 20 years as provided for in the Alienation of Land Act, 1981 (Act No. 68 of 1981).

The sale of immovable property is governed by the Land Alienation Act.  Section 2(1) of this Act provides that no sale of land will be in force and effect unless it is contained in a written deed of alienation signed by the parties or their agents (under the parties’ written authority). An Offer to Purchase is a deed if alienation.

Consequently, when it comes to the selling and long-term leasing of immovable property (“transaction”), one cannot conclude an enforceable contract electronically.  Therefore, the signature must be in pen, defining a person’s distinctive identification as the authorising party granting consent.

Accordingly, a signature, for purposes of the transaction must be one defined as the act of physically signing by hand and does not include by way of data message.

Parties may still communicate terms of their agreements via email and the seller may even be able to communicate his/her acceptance of the offer to the purchaser via WhatsApp, SMS or electronic mail. Execution of the Offer to Purchase shall, however, only be enforceable and valid once the agreement is signed by hand by the parties or their authorised agents.

This article is for general information purposes and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us At DKVG Attorneys for specific and detailed advice.

Author: Tsholofelo Charmaine Mvemve (Conveyancing department)

For more information, contact our IT&IP Law specialist department.

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