DIY law in South Africa: Guidelines for drawing up your own contract
While people may draw up their own contracts, specific information must be included for them to be legally binding, which means it may be wise to use an attorney.
*This feature was compiled by Helene Viljoen, attorney and director of law firm Helene Viljoen Incorporated.
“A man who is his own lawyer has a fool for a client.” This age-old saying, especially popular among lawyers, indicates that taking care of your own legal affairs is not generally advised – even if you are a qualified lawyer.
When it comes to drafting contracts that could have a far-reaching effect on those involved, experts advise roping in a professional. That said, there are many South Africans who prefer to draw up and manage their contracts themselves.
This article sets out the basic principles of South African contract law and provides a checklist for thorough drafting.
- What is a contract?
A contract is an agreement between two or more parties, entered into with the clear intention of creating legal obligations.
- Does an agreement have to be in writing to be valid?
Not necessarily. There are statutes stipulating that some contracts must be in writing to be valid. One example is the Alienation of Land Act 68 of 1961 in terms of which all contracts for the sale, donation and exchange of land must be in writing. Other oral contracts may be enforceable once the requirements for a valid contract have been met.
That said, it is best to stick to written contracts as a rule of thumb. Practically speaking, it is easier to prove the existence and content of a written agreement than it is of a verbal one.
- If I am considering drawing up a contract, where do I start?
Firstly, ensure that the parties entering into the agreement have the capacity and ability to do so. Those who have been declared insane or mentally unfit to manage their own affairs will, for example, not have contracting capacity.
Secondly, those entering into the agreement must know exactly what they are agreeing to. They must agree to the contract’s terms and conditions. These terms and conditions must be lawful, and their requirements practically possible, to render them enforceable.
Thirdly, the specific type of contract entered into will come with its own set of requirements. For example, in a contract to supply services, the work to be done, time schedule and applicable payment provisions should be dealt with.
- Standard considerations to remember
Regardless of the type of contract you are dealing with, certain basics will always be important. For example, the parties must be clearly identified and described. Agreements must be dated. The duties of each party must be properly defined, and the appropriate guidance given on the execution of duties. If any conditions are to precede the start or end of the agreement, this must be indicated.
The duration of the agreement should be stipulated, as well as circumstances that would constitute a breach of the contract, in which case appropriate responses to the breach should be set out. The document may also set out scenarios warranting premature termination of the agreement.
Lastly, space must be provided for the signatories to sign the contract. It is often advised that this be done in the presence of witnesses. Remember that signatories who represent either party must be duly authorised to do so.
- Checklist
While each contract will come with specific requirements, and contents should be deliberated on a case-by-case basis, the below checklist will guide you in ensuring that all the necessary details are included.
| Content | Description |
| Parties | Identify and describe the parties accurately. |
| Preamble | While not a technical requirement, a preamble may serve as an introduction to the agreement, briefly setting out what the purpose of the agreement is. |
| Definition and interpretation clause | In the context of a specific contract, it may be necessary to define certain key terms to avoid confusion or misinterpretation.
Guidance on contract interpretation also contributes to legal certainty. |
| Attachments | If an agreement comes with attachments or appendixes, remember to state this and identify the attachments. |
| Essentialia | Different types of agreements come with different essential elements. For example, in a contract to supply services, the work to be done, the time schedule and the payment provisions should be dealt with. |
| Naturalia and exceptions | Naturalia are terms that apply automatically to specific types of contracts. Exceptions must be agreed to in writing.
For example, in a contract of sale, the risk would normally pass to the purchaser once there is agreement on the item sold, the price, and the fulfilment of any applicable conditions. If the parties wish to come to a different arrangement on when the risk passes, this exception must be recorded in writing.
If you are unsure about the naturally present terms of any specific agreement, contact your attorney for clarity. |
| Incidentalia | Incidentalia describes terms that the parties wish to include in their contract over and above essentialia and naturalia.
For example, in an agreement of sale, the parties may want to make special arrangements regarding delivery. This will qualify as incidentalia.
When considering incidentalia, you may want to ask: How are we going to execute this agreement practically? Which logistics do we need to put in writing? Are there any specific points we need one another to agree on?
Putting these aspects in writing will increase legal certainty. |
| Conditions | Does the agreement, or a part of the agreement, come into effect or terminate only once a specific condition has been met?
If so, explain this. |
| Breach | What would constitute a breach of the agreement, and how will the parties respond to such a breach? |
| Cancellation | If any circumstance would give either party the right to cancel the agreement, this must be clearly stated. |
| Liability and indemnity | If the parties wish to limit their liability or provide indemnification against liability in certain circumstances, this must be clearly articulated. |
| Guarantees and warranties | If either party is willing to give a warranty, this is explicitly included in the agreement. |
| Entire agreement, amendments, and relaxations | Many contracts contain a clause by which the signed agreement forms the only binding contract between the parties, stating that amendments will only be valid if reduced to writing and signed by both parties. The same clause may indicate that a party’s failure to enforce the terms of the agreement does not result in such terms having been waived. |
| Addresses for notices or domicilia citandi et executandi | Indicate an address where important notices in terms of the agreement must be delivered, as well as the appropriate methods of delivery. |
| Force majeure | The impossibility of performance may be brought about by the forces of nature or a so-called act of God. When this happens, force majeure arrangements indicate how the parties are to respond. |
| Governing law and jurisdiction | Contracts typically contain an indication of the law applicable to it, and the courts that would have jurisdiction over disputes arising out of or in connection with the agreement.
In South Africa, a contract would usually state that it is governed by South African law, and that South African courts will have jurisdiction over it.
The parties may wish to narrow this down to the jurisdiction of any specific court, such as a party’s local magistrate’s court. |
| Alternative dispute resolution | Sometimes, the parties may wish to resolve disputes by way of arbitration or mediation. If this is the case, details are agreed to in a dispute resolution clause. |
| Confidentiality | When parties enter into an agreement, they tend to share confidential and proprietary information. Confidentiality clauses protect their interests by prohibiting the divulging of such details. |
| Date | A contract must be dated. If the parties sign it on different dates, the date on which the last signature is affixed will be the date of the agreement. |
| Signatures | Agreements typically conclude with a signature clause. The parties or the duly authorised representative of each party sign the agreement, usually in the presence of an identified witness or witnesses. |
Disclaimer: Information provided in this article does not constitute legal advice, nor should it be construed as such.
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