It is self evident that not every commercial transaction requires a written contract. Purchasing goods at your local store does not require a contract, but more often than not, when dealing in business transactions or matters of material nature, a written contract is required to best protect your rights. The agreement is the foundation of the terms of engagement of any transaction.
Before concluding any agreement, it is crucial to understand what you are signing. Basically, you must read and take cognisance of all obligations contained in the agreement. At minimum, the following principles must be understood:-
1. The consideration (payment) for example, the price paid for the supply of, or manufacturing, of goods and services, salary and commission offered, as well as the method and frequency of payment.
2. The parties to the agreement (for example, is the party with whom you are contracting subject to legal and regulatory rules and are they in compliance with those); and
3. Important deal specific contractual rights and obligations (such as your employee rights, your Intellectual Property rights, your personal information, and confidentiality rights).
Of course, the law may very well have a material impact on the validity of the agreement. By means of example, the law may very well deem the agreement invalid.
If a dispute exists and you need to proceed to court, the first document the court will take into consideration, is the agreement. The less the agreement is to your benefit or ambiguous it is in interpretation, the less chance you may have to protect your rights.
It is thus prudent to seek expert legal advice before concluding any agreements, be it as an individual or as a cooperation.
For further information, please contact Alan Alhadeff at Alhadeff Attorneys alan@alhadeff.co.za