Contractual variations/cancellations/amendments over email

There may be many different reasons why one varies or cancels a contract. As is normal in business practice, contracts are very often amended, varied and/or cancelled. However must must always be wary of the obligations which have been prescribed in the contract. 

This meaning, that should the contract stipulate a manner of amendment/variation/cancellation, one must always take heed of what has been stipulated in order that the amendment/variation/cancellation be valid and binding.

A very common contractual terms prescribes that amendments/variations/cancellations may be done in writing and signed by both parties. The question at hand is whether email correspondence between the parties agreeing to variation/amendment/cancellation is sufficient to fulfill the term in writing and signed.

The Supreme Court of Appeal (Spring Forest Trading 599 CC/Wilberry (Pty) Ltd t/a Ecowash) recently held that correspondence over email cancelling a contract is sufficient for when a contract requires cancellations to be in writing and signed by the parties. The email signature amounts to an electronic signature as it contains the typed names of the parties in terms of the Electronic Communications and Transactions Act.

It is noteworthy that if a contract states that it must be varied in writing, an oral agreement to vary will not stand up in court. So if you orally agree to such, it is best that an email is sent to the other party for them to confirm in writing/by email for the action to be binding. For certainty is still recommended to reduce the agreed to writing and have it signed by both parties.

Whenever dealing with business relationships that are guided by a binding contract, one must always follow the contract and what it (legaly) prescribes.