In Firstrand Bank Ltd t/a Wesbank v Leon Gregory Govender, Wesbank successfully sued its client for the breach of an electronic contract.

Who should care about this judgment and why?

Anyone who uses and enters into electronic contracts.

What could you do about it?

  • Know the requirements for concluding a valid electronic contract.
  • Speed up the sales process by using clickwrap agreements.
  • Maintain evidence of the contract by keeping a copy of the electronic contract and any associated communications, such as emails or messages exchanged during the negotiation process. This documentation can serve as evidence in case of a dispute.

Our insights on the judgment

This case sets a precedent for recognising and enforcing electronic contracts. Understanding the legal framework governing electronic transactions is crucial for individuals and businesses.

More about the case

Facts 

  • Govender failed to pay instalments under a credit agreement with Firstrand Bank Ltd (trading as Wesbank).
  • Wesbank then sued Govender for breaching the credit agreement and sought to repossess the vehicle and damages.
  • In response, Govender argued that he did not conclude a valid electronic contract with Wesbank to finance a motor vehicle. Govender alleged that he only discovered the existence of the contract when he noticed unauthorised debits from his bank account. Govender also alleged that his employer and brother-in-law arranged for the car’s purchase through a loan from Wesbank.  So, Govender argued that since he and Mr Azar shared a company phone, Mr Azar could have accessed the One Time Pin (OTP) and electronically signed the contract.
  • However, Wesbank claimed that the credit agreement was signed electronically in line with ECTA’s requirements. To support their claim, they presented witnesses and provided evidence, including a recorded telephone conversation between Govender and Wesbank’s call centre.

Reasoning

The court’s job was determining whether Wesbank and Govender concluded a valid electronic contract under ECTA. To do so, the court had to consider the electronic contract requirements set out in ECTA. The court also had to consider the lawful recording and use of audio recordings, including telephone conversations under RICA.

Ultimately, the court found that an electronic contract was validly concluded. It confirmed that “data messages or electronic signatures are now recognised in our law as equivalent to a proper basis upon which a written contract can be concluded. Thus, a valid written contract can be concluded electronically”.

Order

  • The purchase and sale of the car will be cancelled.
  • Govender must return the vehicle to Wesbank.  If Govender doesn’t return the vehicle to Wesbank, the court’s sheriff can and must attach and seize the vehicle to return it to Wesbank.
  • Wesbank’s claim for damages will be postponed until after Govender returns the vehicle to Wesbank and it is evaluated and sold.
  • Govender must pay Wesbanks costs.

Details of Firstrand Bank Ltd t/a Wesbank v Leon Gregory Govender

  • Universal citation: [2023] ZAGPJHC 610
  • Case number: 2021/ 25131
  • Full name: Firstrand Bank Ltd t/a Wesbank v Leon Gregory Govender