Terms and Conditions: Understanding contracts you sign
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Terms and Conditions: Understanding contracts you sign

8 Nov 2019 FINANCE

By Zuko Komisa

Kaya Bizz with Gugu Mfuphi explored the importance of carefully reading contracts when making a purchase or getting into any agreement. This is part of a series of conversations that will be happening every Monday over the course of November.

Nhlahla Mtshali from Landham Love Attorneys took Afropolitans through some of the important factors they must be aware of when it comes to contracts.

Verbal Contracts

In many cases with verbal contracts, many people don’t understand the extent of their liabilities.

“Contracts take various forms, there’s e-signatures; contracts that are signed electronically… which doesn’t make the contract invalid, it is still a valid and binding contract… Equally so a verbal contract can come into existence but unfortunately, with a verbal contract, we don’t have terms and conditions.”

She also emphasised that with verbal contracts it is very difficult to prove their existence and to prove what the agreed terms are; with many instances, it becomes one party’s word against the other.

What every contract should have

Nhlahla Mtshali highlighted five requirements of a valid contract in South Africa and stated that should any of the following be excluded, the contract becomes null and void.

  • Consensus, there must be an agreement by both parties
  • Contractual capacity, minors under 18 aren’t allowed to sign contracts
  • Lawfulness, it needs to be a lawful contract
  • Certainty and possibility for the contract to be concluded
  • Formalities must be followed as prescribed by law

Also Read:South Africa has a new presidential advisory unit. Will it improve policy?

Employee and Employer Contract

One of the most import contracts is a work contract. In many instances, the excitement to start a new role causes many to skip reading the contents of the contract between them and the employer thoroughly.

Listen to the full conversation here:

A few things to consider when you receive an Employee and Employer Contract:

What is the status of your employment?

This is important to consider, are you ‘part-time’, ‘fixed-term’ or an ‘independent contractor’? This as a start will affect your access to the organization’s pension program. It will also inform your tax and insurance implications.

Does your contract answer the all-important question?

  • Key position information, like your job title and the team or department
  • An outline of your remuneration and benefits
  • Policy on the organization’s time off policy
  • Working hours (i.e. overtime etc.) policy
  • Term of the contract
  • Confidentiality Policy
  • Contract termination terms and conditions

All these are important to read thoroughly and understand as they will dictate the rules of engagement and hold both you and your employer accountable for honoring the contract.

Afropolitans also weighed in on some of the contractual disputes they’ve had in the past. Remember to tune in to Kaya Bizz every Monday to this 4 part series happening in November.