Frequently asked questions: contracting in the Digital Age

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Q: After a recent job interview, I received a job offer by e-mail. I consequently accepted the offer in the affirmative by return e-mail. Has a contract of employment been concluded?

A: When determining whether the return e-mail was an acceptance of the job offer, reference must be made to the common law. The common law requirements for a valid acceptance of an offer are as follows:

  1. The acceptance must be clear, unequivocal and unambiguous;
  2. The acceptance must correspond with the offer;
  3. The acceptance must be made in the mode prescribed by the offeror; and
  4. The offeree must communicate acceptance of the offer to the offeror.

Based on the case of Jafta v Ezemvelo KZN Wildlife 2008 JOL 22096 (LC), with similar facts, the court held that the affirmative content of the return e-mail by the employee will constitute a clear, unequivocal and unambiguous acceptance of the offer, which correspond with the offer from the employer. Since the employer had made the offer by e-mail, it is in order for the employee to reciprocate accordingly. The fourth requirement of communicating the acceptance of the offer will also be met if the return e-mail is sent affirming acceptance.

When determining whether the employer received the e-mail accepting the offer, the Electronic Communications and Transactions Act 25 of 2002 (“ECT Act”) must be applied. The ECT Act adopts the reception theory for receipt of electronic communication, meaning that contracts are formed at the time when, and place where, the offeror receives acceptance of the offer, but acceptance of the offer does not have to come to the knowledge of the offeror for a contract to arise. This theory applies to prevent any disadvantage to the offeree by not knowing when the offeror knows about the acceptance.

A data message (including and e-mail) is regarded as having been received when the e-mail, firstly, enters the addressee’s information system, and secondly, is capable of being retrieved. Therefore, the e-mail will be regarded as having been received by the employer when it is in the employer’s inbox and is capable of being retrieved, even if the employer has no knowledge of it being in his inbox.

If all the above requirements have been met, a valid contract of employment would have been concluded.

Q: Is it possible to digitally sign an agreement and have that digitally signed agreement accepted in a court of law?”

A: The passing of the Electronic Communications and Transactions Act 25 of 2002 (“ECT Act”) initiated the basic premise that digital communications are no less valid than paper based communications. According to the ECT Act, 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.

The ECT Act differentiates between an electronic signature and an advanced electronic signature. An advanced electronic signature is required where a law requires that a document be signed.  Very few documents require a signature by law, however if any documents or matters pertaining to litigation, conveyancing and administration of estates is conducted electronically, these documents require advanced electronic signatures.

Where there is no legal requirement for an advanced electronic signature, a “normal” electronic signature can be used to sign contracts, letters, and other documents. An electronic signature may include a PIN or password, smart card, scanned signature, voice message and biometric or finger scanning. Parties to a commercial agreement may choose to contract electronically and may determine which form of electronic signature they require in order for the agreement to be properly signed. Where an electronic signature is used where the parties have not specified the form of electronic signature to be used, the ECT Act requires that the electronic signature must be capable of identifying a person and their consent, and having regard to all relevant circumstances, be reliable and appropriate for the purpose for which the information was communicated.

Therefore, an electronic signature on a contract is just as valid as a handwritten signature. When signing a contract, your signature is a means to identify you as the signatory, and signifies your willingness to be bound by the terms of the contract.

Article provide by M. Prem Inc. M. Prem Inc. is a law firm specialising in business law and business development. We specialise in contract negotiation and preparation; mergers and acquisitions structuring and facilitation; regulatory and corporate governance compliance; enterprise and supplier development intervention. Our philosophy is to prevent dispute and resolve conflict thereby limiting financial loss and promoting business growth.

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