A contract (agreement), is a voluntary and mutual understanding between two or more parties, which creates enforceable responsibilities and or obligations, for those parties.
In South Africa, unlawful contracts and clauses cannot be enforced. An example of an unlawful clause is if an employment contract has a clause that indicates that an employee only has 10 days of annual leave a year. This clause cannot be enforced as the Basic Conditions of Employment Act provides that someone may not have less than 15 days annual leave a year. Interestingly the contract can however provide more than 15 days annual leave, but it cannot provide less than 15. In certain instances a clause may even be so unlawful that it can render the entire contract invalid.
This is to say that a contract has to be carefully worded and drafted in accordance with legislation to make certain that it is valid and enforceable. This is to say that if the contract is a shareholding agreement or joint venture agreement, it has to comply with the Companies Act and Income Tax Act, and where it is an employment contract, it must comply with the Basic Conditions of Employment Act and the Labour Relations Act.
There are also certain contractual principles or clauses in South Africa that apply whether they are in the contract or not. An example of this is force majuere, which is essentially an "act of god". If this clause is in the contract, this clause would have applied during the Covid-19 Lockdown, but if it was not there, the common law principle of supervening event would have applied, which essentially functions exactly the same. However, both the clause and common law provision may not necessarily be lawful if there was legislation prohibiting such clauses, such as with children in public schools, where the Schools Act creates a statutory duty to pay the school, irrespective of the interruption caused by the lockdown.
- Agreements of Purchase and sale;
- Loan Agreements;
- Shareholding Agreements;
- Only to name a few.
- Advising as to lawfulness;
- Providing meaning and consequences;
- Consideration of Breaches;
- Advising as to cancellation of a contract.
- Holding parties accountable;
- Issuing letters of demand;
- Referring dispute to appropriate forum; or
- Referring it to court; and
- Representation in the forum and or court.