“The bluntest pencil is better than the sharpest mind” (Unknown) The Festive Season is traditionally a time for giving, and it seems a pity to have to mention the hard realities of the law right now. But, as a recent High Court dispute confirms, things can go horribly wrong if the people involved have different notions on whether what’s being given is a gift, or a loan. “Here’s R400k Ma” – But was it a loan, or a gift? The setting for this
“Externally, trustees cannot disagree. In the external sphere the Trust functions by virtue of its resolutions, which have to be supported by the full complement of the Trust body.” (Extract from judgment below) A recent Supreme Court of Appeal (SCA) judgment provides yet another reminder to tread carefully when contracting with trusts. Your agreements with a trust will be invalid and unenforceable if the trustees acting for the trust weren’t properly authorised to bind the trust. But must trustee resolutions always be
“…data messages or electronic signatures are now recognised in our law as equivalent to a proper basis upon which a written contract can be concluded. Thus, a valid written contract can be concluded electronically.” (Extract from the South African judgment below) ECTA (the Electronic Communications and Transactions Act) means that you can in many cases create legally binding agreements purely electronically – via email, WhatsApp, social media and the like. There is of course both risk and opportunity here. On the one
“The Good, The Bad, and The Ugly” (Spaghetti Western, 1966) A common myth – one that can get you into a whole lot of trouble if you aren’t alive to it – is that verbal contracts are not legally enforceable in South Africa. The opposite is true. With very few exceptions, our law will hold you to all your agreements, whether oral or written. What verbal agreements aren’t binding? Not many. Only a few types of agreement must be in writing to be fully
“… he did not think that he was binding himself ‘to all sorts of fine print that I can’t even read’.” (Extract from judgment below, describing evidence given by the customer during the trial) For suppliers of goods or services, incorporating a strong, clearly worded exemption clause (a clause excluding or restricting your liability to the customer) into your contracts is an essential part of risk management. Just be aware of the restrictions that our laws place on them. As a recent
“Neither a borrower nor a lender be” (Shakespeare) This is a case of a “love relationship” gone wrong but the principles of vehicle ownership apply to any situation in which you lend a motor vehicle to anyone else. A widely-held misconception is that if you are the registered owner of a car, it is yours and you are the owner. Not so, as a recent High Court judgment aptly illustrates – The registered owner unable to reclaim “her” car In what must at the
“To sign a document means to authenticate that which stands for or is intended to represent the name of the person who is to authenticate” (quoted in the case below) We all know that verbal agreements, although fully binding for most types of transaction, are a recipe for uncertainty and dispute. It’s not just a question of trust – even if no one is deliberately dishonest about what was agreed, innocent misunderstandings are common. We have a natural tendency to hear
The COVID-19 crisis has changed everything. Our personal lives have been upended and our businesses hit hard. And with many businesses operating out of leased premises, a great many landlords and tenants are asking themselves what happens if the crisis leaves a tenant unable to pay the agreed rental. What follows is of necessity a general guide only – professional advice specific to your case is essential here. Tenants – your risk As always “With Great Change comes Great Opportunity”, but if you aren’t
“Engage brain before hitting send” (Anon) WhatsApp comes with a host of business and personal benefits, and its use is growing exponentially here as in the rest of the world. Which brings us to a possible downside – binding yourself to a legally-enforceable agreement without really meaning to. First principles: Offer + Acceptance = Contract What makes for a binding contract? In the most simplistic sense, all you need is for one person to make an offer and for another to accept that
Here’s another warning from our courts to make sure that all your contracts are properly drawn to reflect both accurately and fully what you have agreed to. The problem with leaving anything out – or agreeing to something that isn’t then fully recorded in your contract – is a principle in our law known as “the rule of parol evidence”. A recent SCA (Supreme Court of Appeal) decision illustrates the rule in action, and the facts will resonate with the many farmers,
