In South Africa and perhaps in most parts of the world, we have a problem with reading and understanding the contract before signing. In fact, 80% of people sign a control without reading the terms and conditions and what they are getting themselves into. It can either be a contract between a seller and a buyer, tenants, a new job, etc.
There are many independent contractors who may enter into a contract, either verbally or written to do some work for a company or an individual. People who are self-employed can also enter into a verbal or written contract. A commercial contract is when you agree to do a job in exchange for money.
A commercial contract is legally enforceable regardless of the type of contract, whether written or if it was a verbal agreement. When coming to entering into a contract, it is best to get professional advice or involve your lawyer.
What is a contract?
A contract is an agreement between two parties for the purpose of performing a specific activity or acts creating a legal obligation binding both parties. Parties are bound to perform their agreed duties; it can be to render payments or delivering goods.
There are types of contracts that include oral/verbal contracts, written, standard form and period contracts.
What to consider before signing a contract
Before signing a contract understand the nature of it and what does it mean to sign a contract. Does it mean you are employed, or you are an independent contractor? – understanding such facts will raise aspects such as ‘Tax implications’, insurance, that form part of sealing the employment contract deal.
Courts prefer a written contract done a verbal contract – verbal contracts are risky, and you can support your verbal agreement with messages, quotes, etc.
If you don’t understand the language of the contract, have it translated, or if you don’t understand the meaning of signing a particular contract, seek professional advice. REMEMBER TO ALWAYS READ THE FINE PRINTS.
Ensure the basic information appears on the contract, such as business name, registration number, and all information explaining your purpose, duties, position and your status.
Ensure they have mentioned payment arrangements, and be careful when you will only be paid when the contract ends not unless it’s a short contract such as a 3-months contract.
A valid contract requires 3 main things:
- In a mutual agreement, both parties must share an understanding of what the contract constitutes.
- Offer and Acceptance from both parties, the other one offer while the other one accepts, and thus, both will be bound by a contract, as such, they have a legal obligation.
- Something of value must be exchanged, known as ‘Consideration’.
Get a lawyer or professional advice before signing any contract