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An electronic agreement for the purchase of a house is not currently valid in our law.

We get many varied emails and queries from people all over the country on a daily basis.

Some are straightforward; others really interesting.

At The Legal Advice Office; we received the following query last week

 “I am in the process of purchasing a house in Pretoria, but live in Bloemfontein.

I recently bought my motor vehicle by merely signing certain online documentation electronically, and it was so quick and easy to complete. I asked the estate agent in Pretoria who is acting for the seller if I can use the same technology to purchase the house, but she said that the contract won’t be valid if I sign it electronically. Is this true? Please, could you advise me?”

It is true that legally binding electronic agreements, contracts and transactions and the use of electronic signatures have been increasing in prevalence since the promulgation of the Electronic Communications and Transactions Act of 2002 (“ECT Act”) which regulates electronic transactions in the RSA. As the ECT Act allows for the use of electronic signatures in our daily business dealings, it is important to understand what an electronic signature is and when such an electronic signature can be validly used and be legally binding.

The ECT Act defines an electronic signature as “data (ie. an electronic representation of information in any form) which is attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as his signature in an electronic environment where a physical signature is not possible.”

Where our law requires that contracts must be in writing, the ECT Act recognises that a data message may meet the requirements for being “in writing” and that where the signature of a person is required by law and such law does not specify the type of signature, the requirement is met if an advanced electronic signature is used, which establishes a valid and binding agreement.

This does not, however, mean that all electronic transactions will be legally binding.

The following exclusions are expressly provided for in the ECT Act:

•An agreement for the alienation of immovable property in terms of the Alienation of Land Act of 1981.
•An agreement for the long-term lease of immovable property in excess of 20 years in terms of the Alienation of Land Act of 1981.
•The execution, retention and presentation of a will or codicil as defined in the Wills Act of 1953.
•The execution of a bill of exchange as defined in the Bills of Exchange Act of 1964.

In the case of our client above, the first exclusion relating to the alienation of immovable property (eg. a purchase contract for a house) is applicable as the Alienation of Land Act determines that no sale of land shall be of any force or effect unless it is contained in a sale agreement and signed by all the parties thereto or by their agents acting on their written authority, and thus any contract for the sale or purchase of immovable property is specifically excluded from being valid if entered into electronically.

In summary, a Deed of sale for an Immoveable property must not be signed electronically.

So, although in our client’s case his motor vehicle purchase may have been possible electronically, an electronic agreement for the purchase of a house or any other immovable property which he wanted to sign electronically is not currently valid in our law.

Please visit our website at www.legaladviceoffice.co.za or send us an email to This email address is being protected from spambots. You need JavaScript enabled to view it. and we will respond to your legal queries within 48 hours.

About our author:

Hugh Pollard (Legal Consultant), has a BA LLB and 42 years’ experience in the legal field. 22 years as a practising attorney and conveyancer; and 20 years as a Legal Consultant.

082-0932304 (Hugh’s Cell Number)

This email address is being protected from spambots. You need JavaScript enabled to view it.

www.legaladviceoffice.co.za

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Legal Advice Office

South Africa

Kandelaar Street, Vermont, Hermanus
Phone: +27 (028) 316 2832
Email: info@legaladviceoffice.co.za

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