Is your standard non-variation clause as watertight as you think? With the prevalence of electronic communication in everyday business, agreements are increasingly being amended or cancelled, whether intentionally or inadvertently, through digital exchanges.
In Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash [2014] ZASCA 178, the Supreme Court of Appeal held that emails satisfied the writing and signature requirements of the Electronic Communications and Transactions Act, 2002, and that agreements could accordingly be validly varied or cancelled by way of such communications between the parties.
The practical effect is that where a non-variation clause requires amendments or cancellation to be reduced to writing and signed by both parties, but the agreement is silent on the type of signature to be used or the meaning of "writing", an exchange of emails agreeing to amend or cancel the agreement will constitute a valid and effective variation or cancellation.
To avoid disputes regarding the terms of a variation or cancellation, ensure that your non-variation clause clearly defines what is meant by “in writing" and "signed”, taking into account what is appropriate for the parties and the nature of their agreement.
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