Pretoria - In keeping with changing times and the electronic age, the court has made it clear that a valid written contract could be concluded electronically.
The court said data messages or electronic signatures were now recognised in our law as equivalent to a proper basis upon which a written contract can be concluded.
These remarks by the Gauteng High Court, Pretoria, were sparked by an application launched by Wesbank against Leon Govender for the return of an expensive sports car. The bank said Govender had fallen in arrears with his monthly payments.
It emerged that the financing agreement was not concluded face to face with Govender, but rather via an electronic process, in which Govender signed electronically for the deal.
Govender claimed it was not him who bought the car, but his now deceased brother-in-law, who used his ID and other particulars to purchase the BMW X5 M-Sport vehicle for more than R1.5 million with finance from Wesbank.
Govender said he never went to the dealership, nor did he sign any documents there or speak to any of the sales representatives.
Wesbank said the contract was signed electronically through an iContract system that used a one-time password and communication via email or SMS. It further argued that there was also a voice recording where Govender made arrangements to pay through the monthly debit of his bank account.
The total purchase price was R1 553 249, payable in monthly instalments of R17 902.
Judge E Molahehi commented that the Electronic Communications and Transactions Act, whereby contracts are concluded electronically, is now well established in our law.
The plaintiff contends that it has complied with its obligations under the contract, in particular, that of having delivered the vehicle to Govender in accordance with the terms of the agreement. It further avers that it had to institute these proceedings because the defendant breached the contract by failing to make the full and/or punctual payments of the amount due under the agreement, and is accordingly in arrears in respect of the instalment owing.
Wesbank’s finance and insurance manager testified that in the present instance, Govender would have arrived at the dealership and been assisted by a sales consultant in identifying and choosing the vehicle he wished to purchase.
She further testified that Wesbank’s watermark stamp in the middle of each contract page proves that he signed the contract electronically. This, according to her, means that Govender received an SMS or email containing a link to register his details on the documents from the bank.
After that he would have received a number generated by the electronic system known as the one-time PIN, which allowed him to choose his communication with the bank, namely through email or SMS. The PIN would also allow him access to the iContract.
This process would allow Govender to produce his ID documents and other relevant documents after he entered the PIN in his phone, ensuring that he was the only one who would have access to the contract.
Both the bank’s finance manager and its attorney were satisfied that it was Govender who had concluded the electronic contract.
Govender in turn said that he discovered the existence of the contract when his bank account was debited. He further testified that he found that the debit was for the payment of the vehicle purchased by his brother-in-law.
According to him, the latter took his ID book, salary advice slips, and insurance documents and arranged for the purchase of the car from the dealership through the loan from the bank.
Govender said that upon discovering that a vehicle had been purchased and had been paid through a debit order from his account, he confronted his brother-in-law, who owned up that he had purchased the vehicle in Govender’s name.
According to Govender his brother-in-law undertook to ensure that the funds were placed in his bank account to cover the vehicle payment. He did not deny having had possession of the cellphone through which the PIN was posted, but said that it was a company phone to which his brother-in-law also had access. This means that Mr Azar could have activated the OTP and electronically signed the contract.
He conceded that the ID document and the driving licence used as part of the necessary documents in the purchase of the vehicle belonged to him.
Judge Molahehi rejected Govender’s arguments and said it was clear that he was the one who had entered into the agreement, which was binding.
He ordered Govender to return the vehicle, or if he did not, that the sheriff must fetch it and return it to the bank.
Pretoria News