31 March 2022

Improving Transactions through Functional Equivalence

Submitted by SchoemanLaw Inc

By Cheralco Worship, SchoemanLaw Inc

In this fast-paced digital age we find ourselves in; many people are seeking new ways of sharing information and conducting business transactions in quicker and more efficient ways. Initially, legislation that traditionally required paper-based systems was one of the primary barriers to developments in e-commerce. However, introducing concepts like functional equivalents into law through legislation like the Electronic Communications and Transactions Act 25 of 2002 has helped overcome these barriers.

What is a Functional Equivalent? 

Legislation regulating documents related to trade or communications usually contained requirements such as “original”, “signed”, or “in writing”, which ultimately restricted e-commerce until digital equivalents were recognized. When there is a specific method, technique, procedure or practice in place and you implement a rule or function that provides the same or better outcome as the original method or process, this is called a functional equivalent.

In order to establish a Functional Equivalent, the current function being achieved by the traditional form needs to be examined and then it needs to be determined whether this function can be replicated or reproduced in a digital format. For example, the legal requirement of a signature on a document has introduced its functional equivalent, an electronic signature. This allows for agreements or transactions to be concluded more efficiently while still adhering to legislative requirements, allowing such agreements and transactions to become legally enforceable and confer legal obligations on the parties.


In conclusion, it is essential to obtain the necessary information relating to Functional Equivalents and how they can assist in improving your business transactions. Therefore, consult with a legal professional when evaluating or developing your systems and procedures that support effective digital transactions and agreements. To make sure you comply with the law and protect yourself and others.

Contact an attorney at SchoemanLaw Inc https://www.schoemanlaw.co.za/ for your legal needs!

SchoemanLaw Inc

SchoemanLaw Inc Attorneys, Conveyancers and Notaries Public is a boutique law firm offering its clients access to high quality online legal documents and agreements, together with a wide range of legal services. The firm has an innovative and entrepreneurial mindset that distinguishes it from other law firms. We apply our first-hand understanding of the challenges facing entrepreneurs (regardless of their business size) to develop proven, practical solutions incorporating legal compliance, risk aversion and business sense. We achieve this by offering clients tailored, yet holistic support comprising of legal gap analysis, the design of tailored legal solutions and the practical implementation thereof through training and automation. With your personal interests in mind, our ultimate aim is to implement measures that protect the results of your hard work as effectively as possible.