Changing the face of Contractual Agreements

May 28, 2019 | 2019, News

Section 11 (1) of ECTA provides that:
‘Information is not without legal force and effect merely on the grounds that it is wholly or partly in the form of a data message.’

This is a simple sentence but has given a new dimension to contractual agreements as we know them. This section effectively means that data messages are not excluded from being legally binding just because of their form. This allows contracts to be drafted and terminated by means of data messages. Examples of these include an sms, e-mails and WhatsApp messages. Imagine drafting multi-million rand contracts from the comfort of your home via WhatsApp. Imagine no further as it is now possible.

This provision and its effects have already reached the courts. In the case of Sihlali v SABC [2010] ZALC 1; (2010) 31 ILJ 1477 (LC), an employee handed in his resignation by means of an sms. He then argued that this form of resignation is not valid as it was not in writing. The court held that an sms constitutes writing and therefore the resignation was valid.

Technology is changing the way business is being conducted and it is promising that legislation has been developed to keep up with this change. This contributes to making the commercial world simpler and more efficient.