Browsed by
Category: Contracts

CANCELLATION BY EMAIL

CANCELLATION BY EMAIL

Grantham (Tenant) and Anthea (Landlord) concluded a written lease agreement in respect of a flat situated in Bellville. Grantham was unable to meet certain obligations in terms of the agreement and Anthea suggested in an email that they cancel the agreement. Grantham accepted her proposal and both parties ended their respective emails with their typewritten names at the end of the email. Anthea, however, could not get a new tenant in time and want to hold Grantham liable for the duration of the lease, because she is of the opinion that the cancellation by email is not valid since the agreement required cancellation and variation to be in writing and signed by both parties. She approached MHI Attorneys for advice.

Most standard contracts have a non-variation clause, stipulating that no variation or cancellation would be effective unless reduced to writing and signed by contracting parties. The effect thereof is, should you intend to cancel an agreement, all you have to do is ensure that it is in writing and signed by both parties. However we live in a modern era where electronic communication systems are becoming the standard form to conclude transactions, by utilising emails to negotiate and enter commercial agreements.

These electronic transactions had to be regulated by way of legislation and accordingly the Electronic Communications and Transactions Act 25 of 2002 (“ECTA”) was promulgated to provide for the facilitation and regulations of electronic communications and transactions, and to promote universal access to electronic communications. The question that arises in this instance is whether the alleged cancellation of a contract by email is valid, if it is clearly stipulated in the non-variation clause that cancellation should be in writing and signed by both parties.

In Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2014 ZASCA 178, the parties entered into several written agreements in terms whereof Spring Forest would lease goods from Wilberry. The agreements contained a non-variation clause which provided that variation and cancellation would only be effective should it be reduced to writing and signed by both parties. Spring Forest was unable to meet the certain obligations in terms of the agreement and following negotiations, the parties verbally agreed to cancel the agreements.

The terms of the cancellation and return of the machinery were recorded in various emails between representatives of the parties, with their names appearing at the end of their respective emails.  Spring Forest then entered into a new agreement with another entity (Combined Motor Holding Limited) to conduct the same business. Wilberry applied for an interdict to prevent Spring Forest from conducting its business and argued that the agreements were not validly cancelled. The High Court held that the email communications did not evince an intention to cancel the agreements, but only recorded the negotiations between the parties, and in any event the parties did not specify that their agreements could be cancelled by exchange of emails.

The Supreme Court of Appeal in considering the matter, took cognisance of the provisions of ECTA, specifically section 12 and 13 of the Act. Section 12(a) of ECTA stipulates that a legal requirement for an agreement to be in writing is satisfied if it is in the form of data messages, and data messages can be defined in terms of the ECTA as data generated, sent, received or stored by electronic means. Therefore the emails between the parties were governed by ECTA and the Supreme Court of Appeal held it was not in dispute that the emails between the parties fulfilled the requirement that the cancellation of the agreements must be “in writing”.

The real dispute and/or issue was whether the names of the parties at the end of their respective emails constituted signatures as contemplated by Section 13 of ECTA. Section 13(3) stipulates where an electronic signature is required by the parties to an electronic transaction and the parties have not agreed on the type of electronic signature to be used, that requirement is met in relation to a data message if; (a) a method is used to identify the person and to indicate the person’s approval of the information communicated; and (b) having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated.

The Court held that the parties clearly manifested a written intention to cancel the agreement and it was evident from the respective emails between the parties. Neither the terms of the written agreement or the respective emails stipulated the form that the signature was to adopt, therefore Section 13(3) applied to the cancellation of the agreements. The Court concluded that the typewritten names of the parties at the foot of the emails, were sufficient to identify the users and complied with the provisions of Section 13(3) of ECTA, thereby constituting a signature by the parties.

In the Spring Forest case the court took the approach of being pragmatic and practical about the issue rather than being formalistic, in order to ensure effective interpretation and application of the law.

It is best to consult with your MHI Attorney before concluding written agreements to ensure that your rights are protected.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

 

CONTRACTING WITH MINORS IN A DIGITAL CONTEXT

CONTRACTING WITH MINORS IN A DIGITAL CONTEXT

A1BIn this article, we examine whether contracts entered online by minors, using their parents’ credit cards, are legally binding in the specific context of social media such as Facebook.

Both Common law and legislation deal with the capacity of minors who enter into different types of contracts. According to the Children’s Act, 38 of 2005 a minor is a person between the ages of seven and 18 years. In terms of common law a minor does not have sufficient capacity to incur binding obligations under a contract and must obtain the assistance or consent of their guardian to do so. This consent can be given before the contract is concluded or thereafter, in which case it is seen as ratification of the contract. There are exceptions to this rule, which may be found in various pieces of legislation as well as in common law, such as contracts where the minor obtains only rights and no duties (e.g. a donation).

A minor can escape liability even when they have been bound in terms of the contract (i.e. where the guardian has assisted the minor in the conclusion of the contract, consented to or ratified the contract). This can be done where the contract was prejudicial to him or her at the time that it was concluded. The court may then, on application, set the contract aside and order that each party be placed in the same position as what they were in before the contract had been concluded.

Facebook is currently involved in an ongoing class-action lawsuit. In this lawsuit, a class of parents in America are pressing their claim that Facebook should change how it handles online transactions by minors.

Attorneys for the parents in the above case note that it is important that Facebook has knowledge of a user’s actual age but still treats children the same as adult users when it comes to taking their money.

One of the biggest issues here is that reciprocal performance, being the payment of money via credit or debit card and the child obtaining credits, takes place almost immediately. Therefore, if the parent were to be refunded, the minor would be unjustifiably enriched using the credits.

The system, that Facebook currently employs, is therefore problematic since it takes advantage of children who may not fully understand the contracts that they are entering into when they purchase game credits. Furthermore, should the parents be immediately refunded in the current system, it may lead to situations where the parent consents to the purchases and then after the child obtains the enjoyment from the credits, request that their accounts be credited due to a ‘lack of consent’.

It is therefore clear that this system of payment should be changed. We should obtain clarity on how to deal with this in South Africa once the class-action suit in America has been concluded and a solution has been reached. At present, it seems that there will be no alternative for parents whose children overspend or use their credit or debit cards, without permission. If your child has, a Facebook gaming habit it is a good idea to keep a close eye on your wallet until we have clarity on the recourse available to parents who find themselves in this situation.

Bibliography

  • Children’s Act 38 of 2005
  • Hutchison D, Pretorius C, Naude T, Du Plessis J, Eiselen S, Floyd T, Hawthorn L, The Law of Contract in South Africa, 2nd Ed, (2009) 151-152.

“Facebook to Face US Lawsuit Over Kid’s Purchases” News 24 (3 March 2015) http://www.fin24.com/Tech/News/Facebook-to-face-US-lawsuit-over-kids-purchases-20150312

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

MINDERJARIGES, KONTRAKTE EN DIE DIGITALE ERA

MINDERJARIGES, KONTRAKTE EN DIE DIGITALE ERA

A1BHierdie artikel handel oor die vraagstuk of kontrakte wat deur minderjariges, met hul ouers se kredietkaarte, aangegaan is bindend is met spesifieke verwysing na sosiale mediaplatforms, soos Facebook.

Beide die gemenereg en wetgewing maak voorsiening vir bepalings rakende minderjariges se reg om verskillende tipes kontrakte aan te gaan. Volgens die Kinderwet, 38 van 2005 is ‘n minderjarige, ‘n persoon tussen die ouderdom van 7 en agtien jaar. Volgens die gemenereg het ‘n minderjarige nie die reg om bindende verpligtinge aan te gaan ingevolge ‘n kontrak nie, en moet die hulp of toestemming van die betrokke minderjarige se voog verkry word, alvorens ʼn kontrak aangegaan kan word. Die toestemming kan gegee word voordat die kontrak gesluit word of daarna, in welke geval dit gesien word as bekragtiging van die kontrak. Daar kom uitsonderings op hierdie reël voor, wat gevind kan word in verskeie stukke wetgewing, sowel as in die gemene reg, soos kontrakte waar die minderjarige net regte en geen verpligtinge verkry (bv. ‘n donasie).

‘n Minderjarige kan aanspreeklikheid vermy, selfs wanneer hulle gebind is in terme van die kontrak (d.w.s. waar die ouer die minderjarige bygestaan het ​​in die sluiting van die kontrak, daartoe toegestem het of die kontrak daarna bekragtig het). Dit kan gedoen word in die geval waar die kontrak nadelig is vir die minderjarige ten die tyde van die kontraksluiting. Die hof kan dan op aansoek, die kontrak tersydestel en las dat alle betrokke party in dieselfde posisie geplaas word, as wat hulle was voor die kontrak gesluit is.

Facebook is tans betrokke by ‘n deurlopende klasaksie regsgeding waar ouers in Amerika eis dat Facebook die wyse waarop aanlyn transaksies deur minderjariges hanteer word verander.

Prokureurs stel dat dit belangrik is dat Facebook kennis dra van ‘n gebruiker se werklike ouderdom, maar kinders word nog steeds dieselfde as volwasse gebruikers behandel wanneer geld (die sluiting van kontrakte) betrokke is.

Een van die grootste probleme is dat wedersydse prestasie, synde die betaling van geld via kredietkaart of debietkaart en die kind krediete verwerf, byna onmiddellik plaasvind. Daarom, as die ouer terugbetaal word, sou die minderjarige onregverdig verryk word deur die gebruik van die krediete.

Die stelsel wat Facebook tans gebruik is problematies aangesien dit minderjariges misbruik wat nie die kontrakte wat hulle aangaan, wanneer hulle krediete koop om aanlyn speletjies te speel, ten volle verstaan nie​​. Verder skep die huidige stelsel die moontlikheid van situasies waar ouers, wat onmiddellik terugbetaal moet word, toestem tot die aankope en dan nadat die kind die krediete verkry en gebruik het, versoek dat hul rekeninge gekrediteer word as gevolg van ‘n ‘gebrek aan toestemming’.

Dit is duidelik dat hierdie betrokke stelsel van betaling verander moet word en dat daar duidelikheid verkry moet word oor hoe om hierdie betrokke situasie in Suid-Afrika te hanteer, nadat ’n uitspraak rakende die klasaksie in Amerika gelewer is. Op die oomblik, blyk dit dat daar geen oplossing is, vir ouers wie se kinders te veel geld bestee, of hul krediet of debiet kaarte sonder hul toestemming gebruik nie. Indien jou kind van Facebook speletjies hou is dit dalk ‘n goeie idee om ‘n ogie te hou oor jou beursie totdat daar duidelikheid is oor die verhaalregte beskikbaar vir ouers wat hulself in hierdie situasie bevind.

Verwysings Lys

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

CANCELLATION OF THAT GYMNASIUM CONTRACT

CANCELLATION OF THAT GYMNASIUM CONTRACT

A2blWe have all made New Year’s Resolutions. This year I will start exercising, eating healthy and spend less time at the office and more with the family. In order to fulfil this resolution, you join the local gymnasium as soon as you return from your December holiday. It does not bother you whether the agreement is for two, three or four years. This year you are going to keep that resolution!

Then winter arrives and you spend more time at the office and at the fireside and less time in the gymnasium. By August you recognise the debit order of the gymnasium on your bank statement, knowing full well that you have not been there for at least two months.

The Consumer Protection Act (“the act”) has limited the effect of fixed-term agreements containing automatic renewal clauses for a further fixed term. As the legislator has given a wide definition to the words “goods” and “services”, most fixed-term agreements will fall within the scope of the act. Section 16 of the act provides that any consumer may cancel a long-term agreement with twenty business days’ notice, which notice must be in writing, unless both parties to the agreement are juristic persons.

The act then provides that the supplier may be entitled to a “reasonable cancellation penalty” payable by the consumer for cancelling the fixed-term agreement. What constitutes a reasonable cancellation penalty will depend on the type and nature of the contract.

Lester Timothy of Deneys Reitz Attorneys uses the example of a mobile phone contract, an analogy most of us will understand. A consumer enters into a two-year contract with a mobile phone service provider and simultaneously purchases a handset to be paid by monthly instalments in the course of the two-year contract. The service provider will thus have incurred expenses regarding the handset. Therefore, in the event of the consumer cancelling the contract, it will be acceptable for the mobile service provider to charge the consumer for the outstanding balance of the handset to recover the expenses incurred.

Where a supplier incurs no significant additional cost as a result of the cancellation of the contract, the supplier will have more difficulty to establish the reasonableness of any cancellation penalty unless a discount is given.

You may therefore approach that gymnasium and notify them in writing of your intention to cancel the agreement after twenty business days. Depending on the remaining period of your contract and the wording of the agreement, you will have to pay a reasonable cancellation penalty. However, as the gymnasium did not incur significant additional costs as a result of your cancellation, you will be entitled to a discount on the remaining balance of the agreement.

Negotiate the cancellation penalty fee with the gymnasium. You may be surprised what the offer of an immediate payment as cancellation penalty can do.

And next year, rather buy running shoes, even expensive ones. They will wait patiently in your wardrobe till the following New Year’s Day…

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

KANSELLASIE VAN DAARDIE GIMNASIUMKONTRAK

KANSELLASIE VAN DAARDIE GIMNASIUMKONTRAK

A2blAlmal van ons het al Nuwejaarsvoornemens gemaak. Hierdie jaar gaan ek begin oefen, gesond eet, minder tyd op kantoor bestee en meer tyd met die gesin deurbring. Om jou voorneme uit te voer, sluit jy dadelik na terugkeer van jou Desembervakansie by die plaaslike gimnasium aan.  Dit pla nie eers of die kontrak vir twee, drie of selfs vier jaar is nie. Hierdie jaar gaan jy by daardie voorneme hou!

Met die aanbreek van die winter bestee jy al hoe meer tyd op kantoor en voor die kaggel en minder tyd in die gimnasium. Teen Augustus herken jy die debietorder van die gimnasium op jou bankstaat, terwyl jy goed weet dat jy twee maande laas by die gimnasium was.

Die Wet op Verbruikersbeskerming (“die wet”) beperk die effek van ‘n vastetermynkontrak wat ‘n outomatiese hernuwingsklousule vir ‘n verdere vaste termyn bevat. Aangesien die wetgewer wye betekenis heg aan die terme goedere (“goods”) en dienste (“services”) sal die meerderheid vastetermynkontrakte binne die reikwydte van die wet val. Artikel 16 van die wet maak voorsiening daarvoor dat enige verbruiker ‘n langtermynkontrak kan kanselleer met skriftelike kennisgewing van twintig besigheidsdae, tensy die kontrak tussen twee juridiese persone is.

Die wet maak vervolgens voorsiening vir ‘n redelike kansellasieboete (“reasonable cancellation penalty”) wat deur die verbruiker aan die diensverskaffer betaal moet word weens die kansellasie van die vastetermynkontrak. Wat ‘n redelike kansellasieboete behels, sal afhang van die tipe en aard van die kontrak.

Lester Timothy van Deneys Reitz Prokureurs gebruik ‘n voorbeeld wat by die meeste van ons aanklank sal vind. ‘n Verbruiker sluit ‘n tweejaarkontrak met ‘n selfoondiensverskaffer. ‘n Selfoon word gelyktydig aangekoop, die koopprys waarvan maandeliks oor die tweejaartermyn afbetaal moet word. Die diensverskaffer het dus ‘n uitgawe aangegaan wat betref die selfoon.  Sou die verbruiker die kontrak kanselleer, is dit derhalwe aanvaarbaar dat die diensverskaffer die uitstaande balans van die selfoon as ‘n redelike kansellasieboete hef ten einde sy onkostes te verhaal.

Waar ‘n verskaffer geen noemenswaardige ekstra koste moet dra as gevolg van kansellasie van die kontrak nie sal die verskaffer afslag aan die verbruiker moet gee ten einde ‘n redelike kansellasieboete vas te stel.

Jy kan dus die gimnasium nader en skriftelik twintig werksdae kennis gee van jou voorneme om die kontrak te kanselleer. Afhangend van die bewoording in die kontrak en die oorblywende  kontraktermyn, sal jy ‘n redelike kansellasieboete moet betaal. Aangesien die gimnasium nie beduidende ekstra koste aangegaan het as gevolg van die kansellasie nie, sal jy geregtig wees op ‘n afslag op die oorblywende termyn van die kontrak.

Onderhandel oor die kansellasieboete met die gimnasium. Jy sal verras wees wat ‘n onmiddellike betaalaanbod as ‘n kansellasieboete kan vermag. En koop eerder hardloopskoene volgende jaar, selfs al is hulle duur. Hulle sal geduldig in jou klerekas wag tot die volgende Nuwejaarsdag…

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.