Do electronic signatures create valid contracts in Namibia? A look at the new Electronic Transaction
As more international business is conducted and as the world moves towards a paperless society, everyone is geared towards leaving behind the old fashioned process of concluding contracts. Namely, the process of getting all parties to the contract in the same room, and at the same time, to sign and initial every page of the document. Or long queues of customers standing outside offices for hours to sign up for a product/service.
Electronic signatures are one of the solutions that allow contracts to be concluded from any place and at any time. No need to travel, no need to ship or file documents and no need to queue up - making for increased contract speed and lower transaction costs. Examples of electronic signatures include: a hand-signature created on a tablet using your finger, a signature at the bottom of your email, a typed name, a biometric hand-signature signed on a specialized signing hardware device.
Despite being a very convenient option, technology like this has also proven itself to be subject to manipulation, duplication and hacking. With the above risks in mind, the question becomes, can parties still be bound by a contract signed via electronic signature under Namibian law? and if so, how do we protect from the pitfalls of this mechanism?
Section 20 of the newly enacted Electronic Transactions Act 4 of 2019 gives us insights into this. This section allows for any reference in any law, contract or any other legal instrument to a signature or the signing of a document to be construed to include a reference to a recognised electronic signature.
Although the above is straightforward, there are exceptions to the use of electronic signatures that exist as protective mechanisms for signatories.
The first exemption to the validity of an electronic signature is if a contrary intention appears from the law or document concerned. This allows for parties who have been misled to avoid being bound by an electronic signature.
The second exemption to the validity of an electronic signature is if a unique contract or law is incompatible with the use of an electronic signature. For example, deeds and wills are documents that require a handwritten signature and are invalid without such.
The one word that requires special attention in this Act is the word "recognised" as far as the Act speaks of "recognised electronic signatures". It creates an inherent risk of an unrecognised electronic signature rendering a contract void or voidable.
The questions that arise are, how do we get an electronic signature recognised? what is the verification process? and what remedies are available if the electronic signature is not recognised? The Act makes provision for The Minister to make regulations outlining the requirements with which an electronic signature must comply to be a recognised electronic signature. This will go a long way towards developing mechanisms for the authentication of electronic signatures.
However, these requirements and processes have not yet been developed and thus there is a gap in the law here. All eyes are on the Minister regarding how strict the regulations will be once they are enacted and how they will shape this aspect of contracting.
Despite the above, parties are free to use an electronic signature that is not a recognised electronic signature if parties agree to such use by specially crafted contractual clauses or if a law provides for such use.
It is clear that Namibia law is quickly catching up to the use of digital technology and the internet. As local businesses push for more efficient means of concluding transactions and providing services to customers, the use of technology will play a vital role for the foreseeable future. The first companies to incorporate these digital tools will lead customer acquisition in younger segments of the market, and see increased efficiency in operational aspects of their business. The business case for implementing technology of this nature has already been settled, all that is left is for business to safely navigate the legal framework as it unfolds.
About the Author
Zach Kauraisa holds an LLB and an LLM(Cum Laude). He is currently a Candidate Attorney at Koep & Partners in Windhoek Namibia. For inquiries, email: email@example.com