DRAFTING OF CONTRACTS HELDERKRUIN

WHAT ARE THE PROCESS IN DRAFTING LEGAL CONTRACTS?

Drafting a legal contract refers to the act of documenting the terms and conditions to a contract and ensuring that such conditions meet the unique requirements of our client. Drafting an effective contract is a multi-step process, including:

1. Determining the legal capacity of the parties– Each party must be sound of mind and a major;
2. Establishing whether there is consensus between the parties – Parties to the agreement must be in agreement about the terms and conditions of the contract and have the intention of concluding a valid and binding agreement;
3. Ensuring that the agreement complies with the legal formalities – Legislation sets out certain formalities which needs to be applied to different types of contracts;
4. Determining whether the terms and conditions of the agreement is legal – For an agreement to be legally binding, its objective can’t be contra bonos mores
5. Ensuring that the performance of the agreement is possible – as soon as performance in terms of the contract is no longer possible, the agreement is considered to be voidable by the parties

2. Partnership Agreements

A partnership agreement is a contract between partners in a partnership which sets out the terms and conditions of the relationship between the respective partners, including but not limited to:

• Percentages of ownership and distribution of profits and losses;
• Description of powers and duties of each partner;
• Duration of the partnership;
• How the agreement can be terminated;
• How a partner can buy/sell their share of the partnership.

3. Memorandum of Incorporation (MOI)

A Memorandum of Incorporation (MOI) is a document that sets out the rights, duties and responsibilities of shareholders, directors and other persons involved in a company. It is a public documents registered with the CIPC.

According to the Companies and Intellectual Property Commission, the MOI is the most important document governing a company. The MOI sets out the rules governing the conduct of the company, as specified by its owners. The Companies Act imposes certain specific requirements on the content of a Memorandum of Incorporation, as necessary to protect the interests of shareholders in the company, and provides for a number of default company rules / alterable provisions, which companies may accept or alter as they wish as long as it is in line with the Companies Act.

4. Lease Agreements

A lease agreement refers to a written agreement between a landlord and a tenant wherein the landlord allows the tenant to have undisturbed possession of the landlord’s property. In return, the tenant undertakes to make timeous payments for such possession. To ensure that each party is aware of their rights and responsibilities, it is advised that a lease agreement be reduced to writing. This also avoids lengthy trials when a landlord needs to evict a tenant.