When an agreement contains a non-variation clause, it is settled law that the agreement cannot be altered by oral agreement between the parties. From the locus classicus this mechanism has become known as the Shiffren Straight Jacket and was later confirmed in the case of Brisley v Drotsky 2002 (4) SA 1 (SCA).
In the recent decision of Spring Forest Trading CC v Wilberry (PTY) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA), the Supreme Court of Appeal (“SCA”) had the task of adjudicating on the validity of a cancellation of various agreements between parties by email, following discussions held orally between the parties.
The agreements were subject to a non-variation clause, requiring both parties to reduce cancellation of the agreements to writing and for same to be signed in order to be valid. However, in this case, it was contended that the agreements had been validly cancelled via email correspondence between the parties, using their typed names as signatures.
The SCA had to take section 1, section 13(1) and section 13(3) of the Electronic Communications and Transactions Act No. 25 of 2002 into account, which require that –
- When a signature is required by law from the parties and the type of signature has not been specified, the signature must be an advanced electronic signature in relation to a data message.
- Where the parties require an electronic signature from one another but they have not agreed on the type, the requirement is fulfilled either when –
- a method is used which identifies the person and indicates his approval of the information communicated, or
- the method is regarded as reliable and appropriate in the circumstances, with regard to the information being relayed.
The Court upheld the appeal with costs, citing the difference between a situation where the law requires signature of the parties and one where the parties have elevated signature to a requirement in terms of their agreement. The Court found the latter situation to be the one in point by the reasoning that one cannot interpret “required by law” to include a situation where parties to an agreement impose their own formalities.
Cachalia JA went further to point out that Courts have adopted a pragmatic approach to signatures as opposed to a formalistic one.
The Court also found that the Respondent, having previously relied on electronic communication to respond to clear questions posed by the applicant, was unable to rely on the non-variation clause to argue that the emails were merely commentary on the oral conversations which were previously held.
In conclusion, the Court found that insertion of the full names of the parties at the end of the emailed messages validly constituted a signature for purposes of the agreement and therefore the agreements had been cancelled.
This decision holds value in the modern era and should serve as fair warning to all to ensure that the content of email correspondence be validated before inserting ones standard electronic footer/signature.