Written Agreements: Clarity is King

Agreements are important.

Written agreements are more important.

Well-written agreements are most important.

We’ve all come across that contract. You know the one. There’re a gazillion clauses all crammed onto one page in a teeny-weeny font that requires a magnifying glass to read it. Assuming you could understand anything in amongst all the cross-referencing, Latin terms and legal jargon. Never mind that the document has been photocopied a few too many times, which means a few crucial sentences have been cropped off. But everyone is in a hurry to get on with their day. So you dutifully scrawl your signature and scurry off to your next appointment. What could possibly go wrong? The entire contract could be scrapped. That’s what could go wrong.

In the case of 4 Wheel Drive v Rattan, the plaintiff tried to claim for damages to a vehicle that they had lent out as a courtesy car. The contract was…. well, not too dissimilar to the one described above.

The contract said a lot of things, in a very round-about kind of way. And assuming that you had the time, inclination and patience to read the whole thing you would soon have found that the document raised more questions than answers. Well-written it was not.

Ignoring all the obscure things that it did say, there was one thing that it didn’t say: it didn’t expressly state that the vehicle was only covered under insurance for 72 hours, and the defendant would be liable for all damages to the vehicle thereafter.

Long story short, the judge decided that there was only one possible way of interpreting this agreement. And that’s by throwing the whole thing in the proverbial trash.

The contract was duly declared to be void and completely unenforceable. And 4WD found itself having to foot the bill for the R560k worth of damages to the vehicle.

So if you want to ensure that your contracts can be enforced against your customers, partners, suppliers and general business associates, then make sure that they are well-written, understandable and include all relevant provisions.

In Summary: Make sure that the terms and conditions of your contracts are clear and unambiguous.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.