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The Law Desk - Understanding Contracts
The Law Desk - Understanding Contracts
Date: 2023-08-30
Whether it's a lease agreement, finalising a major business deal or even staring a new job, the signing of a contract is an integral and unavoidable aspect of our dealings in life. So what is a contract? At its core it is the recording of an agreement between parties which sets out a legally binding framework in which such agreement will operate.
In accordance with the laws of South Africa, in order for a contract to be regarded as valid, the following key elements must be present. The first beingConsensus, this means that the parties to a contract must have a 'meeting of minds' as per the material elements of the contract it is the alignment of the intentions between the contracting parties.
The second element is Capacity, this requires the parties to have the legal capacity to enter into such a contract. The third being Formalities, this element dictates that the agreement between the parties must be in a certain format such as being in writing and signed by both parties.
This element is somewhat flexible and is stipulated by the parties themselves as verbal agreements are indeed recognised and are enforceable in our law. Thus for the third element to be satisfied, the crucial component is that the mode of the formalities of the contract is clear and agreed upon between the parties.
The fourth element is that of Legality, this ensures that the agreement is lawful.Simply put one cannot try and enforce a contract where the outcome of agreement is in itself, unlawful. The fifth element is Possibility, this dictates that the commitments agreed upon have the ability to be performed. The sixth and final element is that of Certainty/Security, this requires that the agreement being entered into must have a clear and determinable content.
This means the content in respect of the expectations and obligation on each party must be fully described. Should any of the six elements be missing, the contract is regarded as invalid and will be unenforceable should a party default. Our law, taking direction from its Roman-Dutch roots, places significant weight on the sanctity of a valid contract with principles "Pactasunt servand" (agreements must be kept) and "Caveat Subscript or" (let the signatories beware) being core elements of contract law. Once a valid contract is entered into by parties, our law goes through great lengths to ensure that compliance is kept.
Itis therefore crucial to ensure that the drafting and reviewing of your contracts are done correctly and professionally from inception in order to ensure your rights are at all times, protected.
By Saeef Khan: Attorney at Fawzia Khan and Associates. Giving You the Power ofAttorney Email saeef@thelawdesk.co.za or call 031-5025670 for legal assistance at competitive rates