The South Gauteng High Court has ruled that electronic signatures are legally binding in a case pitting vehicle loan provider Wesbank against its client Leon Govender.
In the case, Wesbank demanded that Govender return a vehicle it financed for failing to comply with the contract.
The contract was concluded electronically in terms of section 13 of the Electronic Communications and Transactions Act.
Law firm Michalsons explains that an electronic signature is data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature.
Wesbank, in this action, was seeking an order directing Govender to return the motor vehicle − described as a 2016 BMW X5 XDrive 30D M-Sport A/T.
It further sought that he pays for the damages consequent to the breach of the purchase and sale agreement between the parties.
Court documents, seen by ITWeb, show the total purchase price, including finance charges, payable by the defendant was the sum of R1 553 249.10, which amount would be payable in monthly instalments of R17 902.50, payable from the first day of November 2016, for a period of 71 months, subject to interest thereon calculated at a variable interest rate of prime minus-1.5% per annum.
Govender filed a notice to defend the claim and, in his plea, denied having entered into the sale agreement with Wesbank, which was signed online or electronically.
He further contended there was no compliance with section 13 of the Electronic Communications and Transactions Act.
The defendant pleaded that the vehicle sale was concluded with his deceased former employer and brother-in-law, Claude Azar, without his consent.
He disputed having signed the electronic contract upon which the plaintiff claimed ownership of the vehicle and the right for its return.
Govender said he discovered the existence of the contract when his bank account was debited. He further testified that he found the debit was for the payment of the vehicle purchased by Azar, who took his identity book, salary advice slips and insurance documents, and arranged for the purchase of the car from the dealership through the loan from Wesbank.
He said upon discovering that a motor vehicle had been purchased and paid through a debit order from his account, he confronted his brother-in-law, who owned up that he had purchased the motor vehicle from the plaintiff in the defendant’s name.
According to Govender, Azar undertook to ensure the funds were placed in his bank account to cover the motor vehicle payment.
However, he did not deny having had possession of the cellphone through which the OTP was posted, but contended it was a company phone to which Azar also had access. This means Azar could have activated the OTP and electronically signed the contract, he contended.
Describing the legal consequences of an electronic contract, Judge Edwin Molahlehi said under the Electronic Communications and Transactions Act, “…data messages or electronic signatures are now recognised in our law as equivalent to a proper basis upon which a written contract can be concluded. Thus, a valid written contract can be concluded electronically.
“The same requirements as those applicable for a valid contract under the common law apply to contracts entered into online, or those concluded through data messages.”
He adds 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 it to permit data message is met only if an advanced electronic signature is used.
In the court documents, the judge notes the explanation as to how Govender managed to pay for the vehicle before the death of Azar is unsustainable.
“The contention of the defendant that the evidence relating to recording telephone conversation with the call centre should not be considered because he was not warned that it might be used in court is also unsustainable.
“He did not dispute that he was informed the conversation was recorded. He volunteered the information that is destructive to his case based on the contention that he is not the one who concluded the sale agreement with the plaintiff. In this regard, it is quite clear from the recordings that he conceded he had concluded the contract and that he sought an arrangement to pay for the motor vehicle.”
In conclusion, Molahlehi said: “There is overwhelming evidence that the defendant concluded the credit agreement for the purchase of the vehicle from the plaintiff.
“He breached the contract by failing to pay the monthly instalments. The plaintiff is accordingly entitled to cancel the contract and claim the return of the motor vehicle, including payment of damages consequent to the breach of the contract.”
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