The Drafting of Contracts in South Africa by Michele M. van Eck vi SUMMARY The drafting of contracts is mostly viewed as a practical process. Simply put, a contract is an agreement entered into between two or more parties with the serious intention of creating a legal obligation. Such a contract of sale is not valid because it is made without consideration. Legality – The terms of the contract may not be prohibited the law and should not be contrary to public policy. Dale Hutchinson and Others. Breach – parties may agree on the way forward should either party not comply with the contract as a whole or with some of the enforceable clauses. Contracts may be breached by an act or omission. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, for an agreement to be considered a legal binding document, there are some key aspects that need to be in place, such as the fact that it needs to be a written document that is signed by both parties. According to South African legislation, once the buyer and seller have signed an agreement to purchase a property, the seller cannot accept a competing offer from another buyer before registration takes place. The Constitution – This is the most supreme law in South Africa and enshrines the Bill of Rights which contains fundamental rights which must be respected and adhered to at all times.Contractual terms which are not in accordance with the constitution, will not be enforceable. “As with the offer, the acceptance must also be in writing and signed by either the seller or the real estate professional who is acting on his or her written authority. However, if the parties agree that the matters that still need to be talked over are immaterial to the deal, the contract can be created. Having a written contract in place ensures that each party understands what is expected of them and reduces the chance of disputes or misunderstandings further down the road. Having particular regard to the developments in consumer protection law and constitutional jurisprudence, the fifth edition of Contract: General Principles provides a comprehensive guide to understanding the general principles of the law of contract in South Africa (SA). it must be reduced to writing, must be signed or signed in front of a notary and subsequently registered in the deeds office. The language of document must be easy understand and not left up for interpretation. Oral contracts are enforceable, as long as the requirements for … The party did indeed perform, but did not perform as contracted. Formalities In South African law, formalities such as a written contract or the signatures of the Antenuptial Contracts Your Antenuptial Contract (“ANC”) is the most important documents you will sign in your lifetime. Contracts may be governed by various different acts, depending on the type of contract. Unless stated as irrevocable for a certain period, the buyer can withdraw their offer anytime before the seller accepts it. Once the seller has signed the Offer to Purchase document it will be considered a legal and binding document,” says Goslett. The litigation between the erstwhile Scholtz spouses turned on the enforceability or otherwise of a contract of donation, in which the then husband had donated his undivided half share of certain property to his then spouse. According to Goslett, a letter from a seller stating they would like to buy a property for a certain price does not constitute a valid offer. Prescribed formalities The Deed Registries Act prescribes certain formalities, which must be complied with in order to have an antenuptial agreement, which is not only valid against you and your husband, but also valid against everyone else. A contract in South Africa is classified as an obligationary agreement—it creates enforceable obligations—and ought therefore to be distinguished from liberatory agreements (whereby obligations are discharged or extinguished; e.g. To provide the students with a thorough understanding of the essential elements of a valid contract in South African law. University. It is not necessary for the contract of sale to be embodied in one document – it can compile of two, namely the written, signed offer and the written, signed acceptance. Get the best of Private Property's latest news and advice delivered straight to your inbox each week. A valid contract provides protection to both the seller and the buyer. “If the seller decides to reject the offer for whatever reason, the offer ceases to exist immediately and cannot be accepted at a later stage. It can consist of two documents, the written & signed offer and the written & signed acceptance (as long as, in both documents, one refers to the other) and even a verbal agreement; There is no legal prohibition on concluding a contract on a Sunday (this is a common misconception). Copyright © Private Property South Africa (Pty) Ltd. 1997 - 2020. The publication comprises 13 different chapters, which include – There is no legal prohibition on concluding a contract of sale of immovable property on a Sunday. This means that full legal capacity in South Africa is attained at the age of 18. Notices delivered to these addresses by legally recognised means, will be deemed to have been received by the relevant party. This act guards against concepts such as “unconscionable conduct” and “unfair, unreasonable or unjust contract terms and prices”. An obligation in this sense is a legal relationship consisting of a right to performance by the other party, coupled with a corresponding duty to perform “your end of the bargain”. The choice of remedy will be determined by factors such as the type of contract and type of performance, actual damage suffered and whether performance is still possible. The contract will almost always provide that the successful party will be entitled to legal costs on the attorney and client scale. In a contract of sale, for example, there must be certainty about what exactly is being sold and the price to be paid. What makes a sales agreement a valid contract? 1. It is not necessary for the intended husband to be domiciled in the Republic of South Africa to enter into an antenuptial contract for registration in the Republic. Goslett says that all blank spaces on the document must either be filled out correctly or deleted if they are not applicable to the deal. In order for a sales agreement to be considered a legal binding document, there are some key aspects that need to be in place. Buyers should be wary of how the bond clause in an offer to purchase is worded or they could end up in hot water. Remedies that aim to keep the contract in tact: Remedies aimed at cancellation of the contract: Remedies aimed at compensating the innocent party for any loss or damage suffered as result of the breach of contract. An executory contract of donation must be in writing, signed and witnessed. The fixed system of contract freedom – and with the fundamental idea of contracts that are freely closed, should be enforced. Buying a home is a big financial commitment so a buyer should be absolutely certain of their choice before signing an offer to purchase. The female version of ‘testator’ is ‘testatrix’). done under the contract. Whether it’s the settling of disputes, the selling and leasing of residential or commercial properties, the agreement of a loan, or becoming an independent contractor or employee – every day, people all over the world draft and sign contracts. Interpretation – definitions may be included as well as other directions. However, if the contract has been slip into two documents, each document must make reference to the other. To conclude a valid contract the seller’s acceptance of the offer will need to be communicated to the seller. He notes that the agreement also needs to be made between two parties who have the legal contractual capacity to enter into such agreements. Tel: 011 024 1970   Bail: 082 235 5709. There is no general requirement in South Africa that a contract must be in writing. Academic year. Contracts that are not certain are vague, and a court will not uphold them! Nelson Mandela University. What you need to know about digital contracts. Formalities – Certain contracts require compliance with certain formalities, eg. Should this co-operation be necessary and the creditor fails to oblige, the creditor would have committed breach. For the offer to be valid, an Offer to Purchase document must be signed by the buyer and brought to the seller’s attention, either personally, telephonically, by fax or by post. The requirements for a legally binding contract are as follows: Each contract is drafted with the specific needs of both parties in mind. These are: It was stated above that there is no “standard contract” and that each contract is tailor made to suit the parties. If the seller counters the buyers offer – it is considered as a rejection of the buyer’s initial offer. release, novation), real agreements (whereby rights are transferred; e.g. Factors that you should consider when deciding whether to sell your old first. 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