In the recent years, digital technology has brought about significant changes to various sectors of the economy in Tanzania. For example, one can now perform banking transactions via a mobile device, such as, sending money, paying bills and paying taxes through an electronic money platform. Further, government services are also conducted digitally, allowing one to receive government services online and this has now been legislatively recognized through the enactment of the e-Government Act, Number 2 of 2019 which establishes the e-government authority which is tasked with the administration, management and operations of e-government services and provides for the management of electronic data and other incidental matters.
Businesses in the world have become a little hub as the dynamics of conducting business evolve day by day, with everyone being able to reach everyone through an online platform. This, coupled with the challenges of the COVID-19 pandemic, has made the traditional office environment a ‘no-go zone area’. As this becomes apparent, the question therefore most businesses ask is, whether they can enter into valid and binding contracts online, where absolutely everything including execution of documents can also be done electronically?
The Electronic Transactions Act, Number 13 of 2015, Chapter 442 of the laws of Tanzania, as amended from time to time (hereinafter referred to as the“Electronic Transactions Act”) is the primary legislation governing electronic transactions in Tanzania. Generally, electronic evidence and electronic signatures emanate from electronic transactions or transactions which have a component which is done or documented electronically.
In Tanzania, such transactions (except for the admissibility of electronic evidence in Court) were not legally recognized until the Electronic Transactions Act came into force on the 1st September, 2015.
This piece of principal legislation is divided into nine (9) parts geared towards regulating electronic transactions in Tanzania. This legislation provides for the legal recognition of electronic transactions, the use of information and communication technologies in the collection of evidence and the admissibility of electronic evidence. The Electronic Transaction Act also provides for the facilitation of the use of secure electronic signatures in the execution of an electronic transaction and other related matters.
Part II of the Electronic Transactions Act explicitly focuses on the electronic signature legal framework. This part also recognizes that an electronic signature, possess the same legal status as a handwritten signature. The Electronic Transaction Act defines an electronic signature as a “data, including an electronic sound, symbol or process, executed or adopted to identify a party, to indicate that party’s approval or intention in respect of the information contained in the electronic communication and which is attached to or logically associated with such electronic communication.”
Fundamentally, the Electronic Transactions Act further recognizes that, where a law requires that a person’s signature or a seal be entered or affixed to a particular document, and that law does not prescribe the method or form by which such document may be signed or seal affixed, that requirement can be met by applying a secure electronic signature, by the person specifically required to do so. This means that a contract or document cannot be deemed legally unenforceable in Tanzania merely by the fact that it was signed electronically, provided that nothing in any other law restricts the application of electronic signature to that particular document.
In addition, the Electronic Transactions Act also allows for the electronic notarization, acknowledgement and certification of documents by notaries, commissioners for oaths and other people qualified to do such acts.
The Electronic Transactions Act sets out broadly the standard for ensuring safety and security of an electronic signature. This of course, is aimed at hedging against identity theft, fraud and human errors, among others, which may likely occur in the course of procuring and applying an electronic signature to a document.
Arising from the necessity to ensure that the process of applying an electronic signature is secured, the Electronic Transactions Act sets out two (2) standards that must always be met. These are to the effect that, (a) there must be a method used to identify the person and to indicate the intention of that person in relation to information communicated, and (b) at the time the method was used, that method was reliable and appropriate for the purposes for which the information was communicated.
It is important to note that the above requirements do not limit or prevent the parties to a contract from selecting a particular method of electronic signing they wish to use.
Section 7 of the Electronic Transactions Act also sets out standard or specifications for determining whether an electronic signature is secure and these are: -
It should be well noted that the legal consequence of failing to take reasonable steps to verify the authenticity of an electronic signature lies on the person who relies on an electronic signature.
The Electronic Transactions Act, being the primary legislation, has made several consequential amendments to other legislations, to introduce the aspect of electronic transactions therein. The Law of Contract Act, Chapter 345, Revised Edition of 2019 of the laws of Tanzania, as amended from time to time, was amended to recognize the applicability and legality of electronic contracts in Tanzania, while, the Evidence Act, Chapter 6, Revised Edition of 2019 of the laws of Tanzania, as amended from time to time, was amended to provide additional clauses as to the admissibility of electronic evidence in the Courts of law.
By Kelvin Mosha – Associate Kilindu Giattas & Partners
Note: This is not a legal opinion and the contents hereof are not meant to be relied upon by any recipient unless our written consent is sought and explicitly obtained in writing.
