The Electronic Communications and Transactions Act, Act 25 of 2002 (“Act”) provides for the facilitation and regulation of electronic communications and transactions and recognises the validity and enforceability of agreements concluded via data messages.
Before the Act came into operation, it was uncertain whether the exchange of electronic data messages between parties could result in the creation of legally binding agreements between parties. The question was whether the exchange of such messages could impose legal duties and obligations on persons who were not capable of adequately conveying their true intentions via such messages or whether such person actually intended to enter into / conclude a legally binding agreement in the first place. The Act provided answers to the aforementioned questions.
The Act provides that a legally binding agreement can come into existence between persons through the exchange of data messages should the formal requirements (essentialia) of a contract still be satisfied. Such an agreement will be deemed to have been concluded at the place and time that an offeror receives confirmation of acceptance of an offer from the offeree.
A practical example of where these requirements have not been met, is in the unreported case of Kgopana v Matlala argued in the Supreme Court of Appeal (“SCA”). In this matter, Kgopana sent a data message to Matlala (the mother of one of his children) via “WhatsApp” messenger, wherein he stated that he would give each of his children R1 million if he received R20 million. This message was sent in response to a message which Kgopana received from Matlala stating that she already knew that Kgopana had won the National Lottery. Matlala did not respond to Kgopana’s reply.
Matlala later issued summons against Kgopana for payment in the amount of R1 million and alleged that a legally valid and binding agreement came into existence between them. Previously when the matter was before the High Court, it ruled that a legally valid and binding agreement was created and that Kgopana should make payment to Matlala. This ruling was overturned by the SCA and it found that Kgopana did not agree to pay the R1 million, but instead related to what he would do in a hypothetical future event of him receiving R20 million. The SCA further underlined that Matlala did not accept the alleged offer, nor did she immediately request / claim payment. The SCA found that Kgopana lacked true intention to contract.
The principle which remains is that, under different circumstances (if intent was indeed expressed), it is possible for a legally valid and binding agreement to come into existence in the exchange of data messages.
People should therefore take care and exercise caution when making or accepting an offer during a ‘conversation’ via data messages.