29.4 Common law
The South African common law is made up of Roman-Dutch law and past court decisions.
Definition
The common law definition of a word or term is its plain English meaning. Courts generally use dictionary definitions to determine the plain English meaning of a word or term.
“Signature” means “the name of a person written with his or her own hand as an authentication of some document or writing” (Shorter Oxford English dictionary).
The important aspects of this definition are that:
· it must be the name or mark of the person signing;
· the person signing must have applied it themselves; and
· the person signing must have intended it to authenticate them.
Our courts used to follow a formalistic approach to signatures where they focused on whether specific factual circumstances existed to decide whether something counted as a signature. Now they follow a functional approach where they focus on the intention behind the factual circumstances to decide whether the person signing intended something to be their signature.
Applies
South African lawmakers are presumed not to have changed the common law unless they do so explicitly.
Our lawmakers haven’t explicitly excluded electronic signatures from the common law of signatures. This means that the common law applies to electronic signatures.
Court decisions
Unfortunately, there are no court decisions about electronic signatures in South Africa. No one has brought a matter involving an electronic signature before a South African judge and had a binding decision made on it, but there are many cases about what form a signature can take. This is useful when considering new forms of signature, like electronic signatures.
SigniFlow
SigniFlow can be used to create electronic signatures that are valid in terms of South African common law.
The electronic signature it creates meets the common law definition of a ‘signature’, because:
· the person signing’s default signature contains their name;
· the person signing applies it themselves by choosing to apply it to a document; and
· the person signing intended it to authenticate them because they log into the system using their credentials to authenticate themselves.
The electronic signatures it creates would also be considered signatures in terms of the functional approach, because our courts would focus on the intention behind using SigniFlow to create an electronic signature on a document to decide that the person signing using the electronic signature intended it to be their signature.
ECT Act
The ECT Act (Electronic Communications and Transactions Act 25 of 2002) became law in South Africa on Friday 30 August 2002.
Section 2 of the ECT Act says that “The objects of this Act are to enable and facilitate electronic communications and transactions in the public interest [...]”
SigniFlow electronic signatures are an effective way of facilitating electronic communications and transactions.
Confirms common law
The ECT Act confirms the common law rules regarding signatures.
Section 13(2) of the ECT Act says that “Subject to subsection (1), an electronic signature is not without legal force and effect merely on the grounds that it is in electronic form.”
The important aspects of this provision are that:
· electronic signatures are valid signatures;
· despite being in electronic form.
This provision enables the use of electronic signatures without forcing it.
Therefore:
· Signiflow electronic signatures are valid signatures;
· despite being in the electronic form of electronic signature data associated with an electronic document;
in terms of section 13(2) of the ECT Act.
Minimalist approach
The ECT Act takes a minimalist approach to electronic signatures. This means that it provides a definition consisting of certain requirements and anything that meets those requirements is an electronic signature. The most important thing about this approach is that it is technology neutral. The ECT Act doesn’t contain a list of technologies that count as electronic signatures – it only contains a list of requirements. This is good because it means new electronic signature technologies will automatically become electronic signatures in terms of the ECT Act without the lawmakers having to update the legislation.
Therefore, SigniFlows electronic signatures are electronic signatures in terms of the ECT Act because they meet the requirements in the definition of an electronic signature as we will explain below.
Signature definition requirements
The ECT Act sets out the requirements for an electronic signature in its definitions.
Section 1 of the ECT Act says that ““electronic signature” means data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature;”
The important aspects of this definition are that:
· an electronic signature must involve two sets of data;
· the two sets of data must have a relationship where they are “attached to, incorporated in, or logically associated” with each other; and
· the person signing must have had the intention that one of the sets of data be their signature.
Section 1 of the ECT Act says that ““data” means electronic representations of information in any form;” Therefore, SigniFlow’s signatures are electronic signatures in terms of the ECT Act because:
· they involve electronic signature data and electronic document data;
· the electronic signature data has a relationship with the electronic document data because it is incorporated in it when the person signing applies their signature to the electronic document; and
· there is a strong argument that the person signing had the intention that the electronic signature data be their signature, because they logged in with their credentials to authenticate themselves, created their default signature, and chose to apply it to the electronic document.
Data message restrictions
The ECT Act has certain restrictions that a data message must comply with to be an electronic signature.
Section 13(3) of the ECT Act says that “Where an electronic signature is required by the parties to an electronic transaction and the parties have not agreed on the type of electronic signature to be used, that requirement is met in relation to a data message if— (a) a method is used to identify the person and to indicate the person’s approval of the information communicated; and (b) having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated.”
The important aspects of this provision are that:
· you cannot use an electronic signature if you have agreed to use another type of signature, for example in a contract;
· the electronic signature technology must somehow authenticate the signatory and show that they approved the signature; and
· this method must be sufficiently reliable in the circumstances.
Section 1 of the ECT Act says that ““data message” means data generated, sent, received or stored by electronic means [...]”
This definition applies to almost all forms of electronic signature, because they all involve electronic communication of data.
All electronic signatures must comply with these restrictions.
Therefore, SigniFlow electronic signatures comply with the ECT Act’s restrictions for data messages to be electronic signatures, because:
· most of the time, the parties will not have agreed to use another type of signature;
· SigniFlow makes the person signing log in with their credentials to authenticate themselves and shows that they approved their signature by recording all the data of how they applied it; and
· this method is sufficiently reliable for most circumstances in our opinion, although a court may decide that a more reliable method is required in certain circumstances – but no South African court has made such a decision at this time.
Signify agreement
Section 13(5) of the ECT Act says that “Where an electronic signature is not required by the parties to an electronic transaction, an expression of intent or other statement is not without legal force and effect merely on the grounds that— (a) it is in the form of a data message; or (b) it is not evidenced by an electronic signature but is evidenced by other means from which such person’s intent or other statement can be inferred.”
The important aspects of this provision are that:
· where the parties to an electronic transaction have not agreed to use an electronic signature;
· an electronic expression of intention is valid;
· despite not being an electronic signature.
Therefore, SigniFlow’s electronic signatures are also electronic expressions of intention as well as being electronic signatures, which means that a person can also use them when an expression of intention is sufficient and a signature is not required.
Advanced electronic signatures
Advanced electronic signatures are legally different from ordinary electronic signatures. They were created by the ECT Act and do not exist in common law.
Section 1 of the ECT Act says that ““advanced electronic signature” means an electronic signature which results from a process which has been accredited by the Authority as provided for in section 37;”
The important aspects of this definition are that:
an advanced electronic signature must meet the signature definition requirements of an ordinary electronic signature; and
it must be from a process accredited by the Department of Communications (who is the relevant Authority).
Section 37(1) of the ECT Act says that “The Accreditation Authority may accredit authentication products and services in support of advanced electronic signatures.”
The Department of Communications has accredited certain organisations to provide advanced electronic signatures in the form of a digital certificate provider based on a face-to-face authentication service of the person wishing to get the advanced electronic signature.
Section 38(1)(e) of the ECT Act says that “The Accreditation Authority may not accredit authentication products or services unless the Accreditation Authority is satisfied that an electronic signature to which such authentication products or services relate— [...] is based on the face-to-face identification of the user. [...]”
These organisations were accredited on the basis of the ECT Act (Electronic Communications and Transactions Act 25 of 2002) Accreditation Regulations, which became law on Wednesday 20 June 2007 in terms of sections 41 and 94 of the ECT Act. (Available at: http://www.saaa.gov.za/index.php/2013-11-26-14-32-21/2013-12-04-09-54-50/finish/1-policy-and-legislations/7-accreditation-regulation.html)
Both sections 41 and 94 of the ECT Act empower the Minister of Communications to make these regulations.
Regulation 13 of the ECT Act Accreditation Regulations contains the technical requirements for the certificate service provider to issue a digital certificate that can be used for advanced electronic signatures.
Therefore, SigniFlow lets users install their own private keys in the form of a digital certificate provided by an accredited Certificate Authority, which can then be used to create advanced electronic signatures. This means that a person signing a document could easily get a digital certificate provided by an accredited Certification Authority, install it on the CoSign server, and use it to apply a valid advanced electronic signature.
Law requires signature
You must use an advanced electronic signature when a law requires a signature.
Section 13(1) of the ECT Act says that “Where the signature of a person is required by law and such law does not specify the type of signature, that requirement in relation to a data message is met only if an advanced electronic signature is used.”
The important aspects of this provision are that:
· when a law requires a signature; and
· a law doesn’t specify a particular type of signature;
· then you must use an advanced electronic signature.
This means that:
· you need not use an advanced electronic signature;
· when a law doesn’t require signature; or
· a law specifies a particular type of signature.
Therefore, you can use SigniFlow as an ordinary electronic signature where an ordinary electronic signature is sufficient or as an advanced electronic signature where an advanced electronic signature is required by law. It provides ordinary electronic signatures as is and provides advanced electronic signatures when used together with a digital certificate from an accredited certificate authority.
Law specifies type
The Income Tax Act 58 of 1962 is an example of where a South African law specifies the type of electronic signature you must use.
Section 66(7B) of the Income Tax Act says that “The Minister may make rules and regulations prescribing the procedures for submitting any return in electronic format and the requirements for an electronic or digital signature contemplated in subsection (7A).”
The Minister made a rule in terms of this provision that a taxpayer’s userID is deemed their electronic signature for the purposes of eFiling. This overrules the provision enabling advanced electronic signatures in terms of the ECT Act and requires a specific type of signature.
Therefore, you cannot use SigniFlow or any other electronic signature solution to sign a document in a scenario like this where the law specifies the type of signature.
Counts as law
The Interpretation Act 33 of 1957 is very old legislation that helps us work out whether something counts as law. We need to work out whether something counts as law to decide whether it is a law that requires signature.
Section 18 of the Interpretation Act says that “In the interpretation of any Act of Parliament, government notice, government advertisement, ordinance, placaat, proclamation, regulation or by-law made under the authority of any law, rule of court, or any enactment having the force of law, which came into operation in the colony of the Cape of Good Hope prior to the thirty-first day of May, 1910, the following expressions shall [...] have the meanings hereby assigned to them [...]”
We can work out from this very broad provision that law includes both:
· primary legislation – like proclamations, ordinances, and Acts; and
· delegated legislation – like regulations in terms of promulgated law and forms in regulations.
Therefore, you will need to use SigniFlow with an advanced electronic signature in the form of a digital certificate from an accredited certificate provider when primary or delegated legislation requires a signature.
Advanced electronic signature presumption
The major difference between the legal effect of an advanced electronic signature and an ordinary electronic signature is that there is an evidentiary presumption that applies to advanced electronic signatures and not to ordinary electronic signatures.
Section 13(4) of the ECT Act says that “Where an advanced electronic signature has been used, such signature is regarded as being a valid electronic signature and to have been applied properly, unless the contrary is proved.”
The important aspects of this provision are that:
· where a person signs something with an advanced electronic signature;
· it is deemed to be a valid electronic signature; and
· it is deemed to have been applied properly;
· unless someone proves otherwise.
This is in contrast with where a person signs something with an ordinary electronic signature, because it:
· is not necessarily a valid electronic signature; and
· has not necessarily been applied properly;
· but someone can prove otherwise.
Therefore, you can choose to use SigniFlow with an advanced electronic signature in the form of a digital certificate from an accredited certificate provider if you want to take advantage of this presumption. Otherwise, you can choose to use SigniFlow as is if you don’t want to take advantage of this presumption.
Transaction types
Company administration
Company administration involves directors and shareholders signing documents necessary to run companies, including board resolutions, shareholders agreements, and share certificates.
Section 6(12)(a) of the Companies Act says that “If a provision of this Act requires a document to be signed or initialed- [...] by or on behalf of a person, that signing or initialing may be effected in any manner provided for in the Electronic Communications and Transactions Act; [...]”
This provision means that you can use an ordinary electronic signature or electronic consent to validly sign any of the documents regulated by the Companies Act.
Therefore, you can use SigniFlow for any company administration documents in South Africa.
Other transactions
Signiflow can be used as an ordinary electronic signature whenever an ordinary electronic signature is sufficient in terms of South African law. It must be used together with a digital certificate provided by an accredited certification authority to create an advanced electronic signature whenever an advanced electronic signature is required in terms of South African law.
Suppliers easily verifiable proof of sign-a-identity, signer intent, and document integrity, which can be validated by anyone using widely available application such as any PDF Reader.