E-mails provide secure harness in Cliff case
by Gugulethu Majija,
2016-02-09 05:55:57.0
YOU are negotiating an exciting business deal. There is a back and forth of e-mail correspondence between you and representatives of the other organisation involved in the negotiations.
No written agreement has been signed yet; there are still a few kinks that need to be ironed out before that stage is reached. Then, the deal falls through. Can the undertakings made in the e-mails constitute a binding agreement?
Despite the informal nature of this form of correspondence, e-mails can create binding obligations.
In the recent case of Cliff vs Electronic Media Network, Gareth Cliff claimed that a contractual agreement existed between him and M-Net on the basis of oral and e-mail correspondence between them. He went to court, seeking the permanent reinstatement of his Idols 2016 contractual relationship with M-Net, and for the termination of the agreement to be declared unconstitutional.
Some of the e-mails from M-Net to Cliff contained the logistical arrangements and dates for Idols auditions to be held this year, and Cliff’s image appeared on adverts for the Idols 2016 season.
Judge Caroline Nicholls pointed out that, "If one has regard to the e-mails exchanged between Cliff’s agents and M-Net, it is apparent that there had been previous discussions regarding the 2016 season and Cliff’s participation."
The Electronic Communications and Transactions Act gives legal recognition to transactions concluded electronically by e-mail. Section 22(1) of the act expressly states that "an agreement is not without legal force and effect merely because it was concluded partly or in whole by means of data messages (e-mail)".
Even if parties are merely negotiating a deal, it is incorrect to believe that, just because there is an absence of any written agreement between them, that an agreement does not exist.
In the matter of Spring Forest Trading 599 CC vs Wilberry trading as Ecowash and Another, which involved the cancellation of an agreement via e-mail, it was held that the oral negotiations between the parties were reduced to writing in the form of e-mails and constituted an agreement.
But how will contractually binding e-mail correspondence be differentiated from nonbinding e-mail correspondence? A court will examine the intention of the contracting parties to see if there is an intention to be legally bound.
This can be inferred from the parties’ words or conduct. The e-mail correspondence in the Cliff matter showed a clear intention that he would be a judge on Idols 2016 and the way M-Net conducted itself was proof of this.
The fact that there was a level of certainty involved in the e-mail correspondence also solidified the idea that an agreement was in place. In the words of Judge Nicholls, "both parties conducted themselves as though Cliff’s position as an Idols judge was a foregone conclusion". She therefore found that Cliff and M-Net had entered into a tacit agreement.
Full cognisance of the context of the e-mail negotiations will need to be taken into account when there is a dispute. Where you conduct yourself in a manner in which it can be reasonably inferred that the intention was to enter into a binding agreement with another person or organisation, or that there is no other reasonable interpretation except that a binding agreement exists, then your negotiations via e-mail can be construed as being legally binding.
To reduce the risk of e-mails being regarded as binding contracts, organisations may wish to specifically exclude e-mailed communications from being contractually binding. One solution may be to include a prominent disclaimer along these lines: "The provisions of section 13 of the Electronic Communications and Transactions Act of 2002 are specifically excluded unless this data message is signed using an advanced electronic signature."
• Majija is a candidate attorney at Phukubje Pierce Masithela Attorneys
Gareth Cliff and his legal team after a court found that M-Net was wrong to terminate his position as an Idols 2016 judge. Picture: THE TIMES
YOU are negotiating an exciting business deal. There is a back and forth of e-mail correspondence between you and representatives of the other organisation involved in the negotiations.
No written agreement has been signed yet; there are still a few kinks that need to be ironed out before that stage is reached. Then, the deal falls through. Can the undertakings made in the e-mails constitute a binding agreement?
Despite the informal nature of this form of correspondence, e-mails can create binding obligations.
In the recent case of Cliff vs Electronic Media Network, Gareth Cliff claimed that a contractual agreement existed between him and M-Net on the basis of oral and e-mail correspondence between them. He went to court, seeking the permanent reinstatement of his Idols 2016 contractual relationship with M-Net, and for the termination of the agreement to be declared unconstitutional.
Some of the e-mails from M-Net to Cliff contained the logistical arrangements and dates for Idols auditions to be held this year, and Cliff’s image appeared on adverts for the Idols 2016 season.
Judge Caroline Nicholls pointed out that, "If one has regard to the e-mails exchanged between Cliff’s agents and M-Net, it is apparent that there had been previous discussions regarding the 2016 season and Cliff’s participation."
The Electronic Communications and Transactions Act gives legal recognition to transactions concluded electronically by e-mail. Section 22(1) of the act expressly states that "an agreement is not without legal force and effect merely because it was concluded partly or in whole by means of data messages (e-mail)".
Even if parties are merely negotiating a deal, it is incorrect to believe that, just because there is an absence of any written agreement between them, that an agreement does not exist.
In the matter of Spring Forest Trading 599 CC vs Wilberry trading as Ecowash and Another, which involved the cancellation of an agreement via e-mail, it was held that the oral negotiations between the parties were reduced to writing in the form of e-mails and constituted an agreement.
But how will contractually binding e-mail correspondence be differentiated from nonbinding e-mail correspondence? A court will examine the intention of the contracting parties to see if there is an intention to be legally bound.
This can be inferred from the parties’ words or conduct. The e-mail correspondence in the Cliff matter showed a clear intention that he would be a judge on Idols 2016 and the way M-Net conducted itself was proof of this.
The fact that there was a level of certainty involved in the e-mail correspondence also solidified the idea that an agreement was in place. In the words of Judge Nicholls, "both parties conducted themselves as though Cliff’s position as an Idols judge was a foregone conclusion". She therefore found that Cliff and M-Net had entered into a tacit agreement.
Full cognisance of the context of the e-mail negotiations will need to be taken into account when there is a dispute. Where you conduct yourself in a manner in which it can be reasonably inferred that the intention was to enter into a binding agreement with another person or organisation, or that there is no other reasonable interpretation except that a binding agreement exists, then your negotiations via e-mail can be construed as being legally binding.
To reduce the risk of e-mails being regarded as binding contracts, organisations may wish to specifically exclude e-mailed communications from being contractually binding. One solution may be to include a prominent disclaimer along these lines: "The provisions of section 13 of the Electronic Communications and Transactions Act of 2002 are specifically excluded unless this data message is signed using an advanced electronic signature."
• Majija is a candidate attorney at Phukubje Pierce Masithela Attorneys
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