Jan 2007

UNDERSTANDING THE LAW CONTRACTS - ARE WRITTEN OR SPOKEN

A contract is an agreement between two or more parties. It can be spoken or written and can usually be enforced by law.Contracts will always be part of our lives.

A contract is a binding agreement between two or more parties for doing or not doing certain things. Most contracts can be enforced by law.

Whether you buy a loaf of bread or a house, you enter into a contract. If you do not get the bread after paying R5 for it, the shopkeeper would have broken a contract with you.

Marriage contract

Many people think that a legal contract, must be in writing. But this is wrong. Not all contracts have to be written.

Travelling to work in a taxi or eating at a restaurant are forms of contracts that are not in writing.

But employment, buying a house or a car and credit agreements for buying things like clothes or furniture have to be in writing. Renting something from someone, insurance contracts, contracts for services and marriage contracts must also be written.

Contract of sale

A contract of sale is a document between a buyer and seller setting out terms and conditions.

The law says the seller is responsible for a hidden fault in a product. But if you buy something "voetstoots" or "as it stands", you agree to buy the product as it is. This means it is sold at the buyer’s risk and the seller is not responsible for any faults.

Credit agreement

A credit agreement is a contract where goods or services are given in return for money paid over a specific time.

Sometimes you can take the goods home, like when you buy furniture. But the goods remain the property of the seller until the buyer has paid all the money.

Such agreements used to be known as "hire purchase agreements", but they are now called "instalment sales agreements".

'Cooling off' period

The law says with a credit agreement the buyer has a ‘cooling off’ period of five days. This means the buyer has five days from the day the credit agreement was signed to have a change of mind.

During this time goods can still be returned and the agreement cancelled. However, the contract must be signed at the buyer’s home or away from the seller’s business for the ‘cooling off’ right to work.

If you have to cancel a contract, do it in writing and get a con-firmation letter.

Proof of terms

When there is a written contract the parties who enter into the contract know what their responsibilities are. If there is a problem, a written contract would give proof of the terms and conditions.

When entering into a contract, always make sure what the terms and conditions are. Don’t just sign a contract without knowing what you are signing for.

- Ndivhuwo Khangale

For more information on contracts, call 086 166 2837

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