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Department of Commercial Law
University of Cape Town
Electronic Transactions Law
ELECTRONIC CONTRACTS
INTRODUCTION


Electronic Transactions Law

Electronic contracts are wholly or partially negotiated &
concluded through data messages (e.g. email, sms,
websites)
They may be negotiated and concluded by natural
persons (as principals or agents) or by electronic agents
(automated transactions)
However the following transactions may not be
concluded electronically:
1.
Sale/long-lease of land
2.
Wills
3.
Bills of Exchange
s4(3) & Schedule 1 ECTA
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CONTRACT IN SA LAW

1.
3.
4.

Offer & Acceptance = Meeting of minds/consensus between
parties
The parties must have contractual capacity
The agreement must be both legally and physically possible
The agreement must comply with any formalities prescribed by
law
Electronic Transactions Law
2.
Essentalia for valid contract:
Validity may be affected by misrepresentation, mistake
or duress
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TIME AND PLACE OF CONCLUSION OF
ELECTRONIC CONTRACTS

Electronic Transactions Law
NB re Jurisdiction, Applicable Law, Lapsing of
Offers.

Information/Expedition/Reception/Objective
Theories

s22 ECTA: reception theory applies to electronic
transactions
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ECTA- RECEPTION THEORY

Case: Jafta v Ezemvelo KZN Wildlife [2008] JOL
22096 (LC)
Electronic Transactions Law
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Sending: s23(a) :
a data message, must be regarded as having been sent
by the originator, when it enters an information system
outside the control of the originator or, if the originator
and addressee are in the same information system,
when it is capable of being retrieved by the
addressee.
Reception: s23(b) :
a data message must be regarded as having been
received by the addressee when the complete data
message enters an information system designated or
used for that purpose by the addressee and is capable
of being retrieved and processed by the addressee.
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ECTA- RECEPTION THEORY: PLACE OF
RECEIPT
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
Electronic Transactions Law
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s 23(c): ‘a data message must be regarded as having
been sent from the originator’s usual place of
residence or business and as having been received by
the addressee, at the addressee’s usual place of
residence or business’.
s25: attribution of data message (originator himself/
authorised agent/automated system programmed by
self or authorised agent) *Automated Transactions
s 26(1): the agreement is valid upon receipt of the
acceptance and it is not necessary for the addressee to
acknowledge receipt.
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ONLINE AGREEMENTS
Categories:

Contracts for sale of goods

Contracts for the supply of digitised products

Contracts for the supply of services/facilities

Manner of Acceptance:
o
Terms and Conditions: Shrink Wrap, Click-wrap and
Browse-wrap contracts which refer to the way in which
the contracts are concluded more so than the content
thereof.
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Electronic Transactions Law
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SHRINK WRAP & BROWSE-WRAP
CONTRACTS
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2.
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Electronic Transactions Law
1.
SHRINK WRAP: e.g. software licenses printed on paper,
placed within the shrink-wrap of the software package
itself.
Purchaser bound upon opening of packaging
May be voidable if buyer’s attention not drawn to terms
and conditions
BROWSE WRAP: binds the user of a website to a contract
created by the user's mere browsing of the website.
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CLICK-WRAP CONTRACTS

Electronic Transactions Law
agreements built into
Internet web pages. The
purpose of these
agreements are wide
ranging, but they are
commonly used for:
• Accepting term of use,
e.g. regulating access to
websites with an adult
content
• Containing exclusion
clauses, in an effort to
limit or deflect liability
from the site owners or
administrators
• License agreements
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TERMS AND CONDITIONS
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Electronic Transactions Law
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Binding if not read?
What is the position in
SA Law?
Ticket cases – Durban’s
Water Wonderland (Pty)
Ltd v Botha and
Another 1999 1 SA 982
A
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reasonable
measures to bring
the content thereof
to the attention of
the client

terms and
conditions therein
contained constitute
binding contractual
terms.

opportunity must be
given to accept or
decline

highlight unusual or
unexpected terms
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AUTOMATED TRANSACTIONS S20 ECTA
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A party (X) interacting with an electronic agent to form an
agreement is not bound by the terms of the agreement
unless those terms were capable of being reviewed by a
natural person representing that party (X) prior to
agreement formation. (S20(d))
Electronic Transactions Law
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an electronic transaction conducted or performed, in whole
or in part, by means of data messages in which the conduct
or data messages of one or both parties are not reviewed by
a natural person in the ordinary course of such natural
person’s business or employment
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AUTOMATED TRANSACTIONS S20 ECTA
no agreement is formed where a natural person (X)
interacts directly with the electronic agent of another
person (Y) and has made a material error during the
creation of a data message and—
(i) the electronic agent did not provide that person (X) with an
opportunity to prevent or correct the error;
(ii) that person (X) notifies the other person (Y) of the error as
soon as practicable after that person (X) has learned of it;
(iii) that person (X) takes reasonable steps, including steps
that conform to the other person’s (Y) instructions to return
any performance received, or, if instructed to do so, to
destroy that performance; and
(iv) that person (X) has not used or received any material
benefit or value from any performance received from
the other person (Y).
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Electronic Transactions Law
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ENFORCEABILITY
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Actions / Applications – applications inappropriate for
damages
Problems with damage claims – legal costs, uncertainty
of outcome, determining quantum, damage may be less
than cost needed to recover it
Uniform Rules of Court Rule 5 – service of summons
outside South Africa: time consuming and frustrating
process
Electronic Transactions Law

Interpretation of terms and conditions, including
disclaimers, exclusions & limitations of liability
(traditional contract law approach)
Seeking damages for breach
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ENFORCEABILITY
Damages
Specific Performance
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Section 43 –
Cancellation
Section 44 –
Cancellation
during cooling off
period
Section 43(5) –
Damages or loss
incurred due to
payment system of
supplier


Defendant not in SA
– how to enforce?
Complications iro
Uniform Rules of
Court Rules
ECTA: Section 46 –
statutory rights to
specific performance
to customers in some
internet related
transactions.
Electronic Transactions Law
ECTA’s Influence on
recovery of
damages:
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Electronic Transactions Law
Electronic Transactions Law compiled by Caroline B
Ncube is licensed under a Creative Commons AttributionNonCommercial-ShareAlike 2.5 South Africa License.
To view this a copy of this license visit
http://creativecommons.org/licenses/by-nc-sa/2.5/za/
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