Contracts concluded electronically - Are they considered binding? | Legal Articles


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Contracts concluded electronically - Are they considered binding?

Can contracts be concluded electronically? 

The 21st century has seen many advances, especially in technology, which have provided an incredible amount of freedom and accessibility with regards to communication.

electronic contracts South Africa

We no longer need to gather around a table in a formal manner in order to discuss a sale agreement. In fact, electronic communication seems to be the preferred method.

This is not hard to believe, considering almost everybody has some form of electronic device at their fingertips. Furthermore, our busy lifestyles do not always provide us with enough time to attend formal meetings.

Digital contracts South Africa

The burning question however, is whether or not communication, negotiation and more specifically, accepting an offer to purchase electronically is legally valid and binding?

To clarify, the Electronic Communications and Transactions Act 25 of 2002 does not allow for the sale of immovable property or land to be concluded by means of electronic communication such as an SMS or email.

In fact, the Act specifically excludes any electronic sale agreements of immovable property or land from its application.

In order for an offer to purchase land or immovable property to be legally valid, it is required to be recorded in writing and signed by both parties.

Requirements of a valid acceptance

However, it’s important to note that the seller is obliged to communicate their acceptance of an offer to purchase to the buyer and it is acceptable to do so via electronic communication or a phone call, after the agreement has been properly signed.

Van Deventer & Van Deventer Incorporated – Property lawyers in Cape Town

For expert legal assistance with drafting an offer to purchase as well as the legal requirements of accepting such an offer, contact our property lawyers in Cape Town today.

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