011 475 2845 law@leeuwmar.co.za

Can an agreement of sale of land be concluded,

cancelled or amended via email?

In terms of Section 2(1) of the Alienation of Land Act 68 of 1981, no alienation of land after the commencement of Section 2(1) shall be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.

Although the Electronic Communications and Transactions Act 25 of 2002 applies in respect of any electronic transaction or data message, the Act must not be seen as giving validity to any transaction for an agreement for alienation of immovable property.

Our courts’ interpretation has consistently been that all material aspects of sale of property agreement must be reduced to writing and signed by the parties to be valid, and in order to prevent uncertainty, disputes and possible fraud, the courts have applied the requirements of Section 2(1) of the Alienation of Land Act 68 of 1981 strictly.

In Sidali v Mpolongwana (1990) 4 All SA 825 C the court held that an agreement to grant extension of time for payment need not comply with the requirement of the Alienation of Land Act, as the obligation to pay still exist. The Seller merely withholds his right to enforce payment or to cancel the agreement.

The court further held that an oral amendment which amends the real variation of the contract is unenforceable, due to the fact that it did not comply with the formal requirements of the Alienation of Land Act.

In Theron v Minister of transport and Public Works, Western Cape 2014 (2) SA 557 (WCC) the court held that amendments that are not recorded in writing are non-compliant with Alienation of Land Act, as the Act lays down statutory requirements to impose a valid amendment, therefor amendments cannot be effected via electronic data messaging and signature.

In Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2014 (2) SA 118 (SCA) the appeal court considered a series of emails purporting to the consensual cancellation of written agreements between the parties. The agreements required any ‘consensual cancellation’ to be in writing and signed by them. The Electronic Communications and Transactions Act 25 of 2002 gives legal recognition to transactions concluded electronically by email. The dispute between the parties requires the court to consider whether their exchange of emails met the “in writing” and “signed by” requirements of the Electronic Communications and Transactions Act, thereby constituting a consensual cancellation.

The court held that as long as the parties’ intentions are clear from the text used and the communication is “signed” by way of their typewritten names at the bottom of the e-mail message identifying each party adequately, the requirement that cancellation must be in “writing” and “signed by” the parties will have been met.

In addition, such a requirement that cancellation must be effected in writing does not constitute a signature requirement “by law”, as meant in the Electronic Communications and Transactions Act. Therefore an ordinary electronic signature will be sufficient unless the parties have agreed to the contrary.

In light of the above, amendment and cancellations may be effected electronically unless specifically agreed between the parties that no amended or cancellation may be concluded electronically.

It is very important to remember that the material terms of an agreement cannot be amended electronically.