Lecture 2. Enabling Electronic Transactions: Basic Principles

Legal Recognition of Data Messages

Data messages may not be denied legal force and effect merely on the grounds that they are wholly or partly in the form of a data message and in the context of contract formation, unless otherwise agreed by the parties, an offer and the acceptance of an offer may be expressed by means of data messages. Where a data message is used in the formation of a contract, that contract shall not be denied validity or enforceability on the sole ground that a data message was used for that purpose (s 11(1) ECTA.

In Sihlali v SABC [2010] ZALC 1; (2010) 31 ILJ 1477 (LC) , an employee who was required by law to tender his resignation in writing sent an sms to his employer stating that he was terminating his employment with immediate effect. Thereafter, he sought to nullify this resignation by arguing that the sms was not ‘writing’ and therefore he had not resigned. The court held that an sms message (a data message) meets the requirement of writing and that the employee had validly resigned.

Information that is incorporated in a data message is valid (section 11 (2) ECTA). Where information that is not in the public domain (or freely accessible) is incorporated into an agreement, such incorporation is only valid if it is-

‘(a) referred to in a way in which a reasonable person would have noticed the reference thereto and incorporation thereof; and

(b) accessible in a form in which it may be read, stored and retrieved by the other party, whether electronically or as a computer printout as long as such information is reasonably capable of being reduced to electronic form by the party incorporating it’ (section 11 (3) ECTA).

These provisions enable the incorporation of information by reference in the digital environment to approximate what happens in the physical environment where this is done using annexures or appendices to written documents. In the digital environment, in numerous instances parties often incorporate information by reference. For example, many employers require their employees to affix or append an email disclaimer to email sent using their work email addresses. The email disclaimer is not spelt out in full, but a link is provided to a webpage where the full disclaimer is available. For example, UCT’s disclaimer is phrased as follows:

“This e-mail is subject to the UCT ICT policies and e-mail disclaimer published on our website at or obtainable from +27 21 650 9111.”

Data messages are also valid expressions of intent or other statements between contracting parties even if they are not evidenced by an electronic signature (section 24 ECTA).