DRAFTING OF CONTRACTS

Drafting of contracts in South Africa is the process of translating the parties’ agreed commercial terms into a clear, lawful and enforceable document that defines performance, allocates risk and states what happens if obligations are not met. A sound agreement must reflect genuine consensus, contractual capacity, legality, possibility of performance, sufficiently certain terms and any formalities required for that type of transaction; South African law does not require English-law “consideration” as a standalone validity element. Burger Huyser Attorneys’ Commercial Law / Contracts practice drafts and reviews contracts, shareholders’ agreements and lease agreements and assists with acquisitions and disposals.

What Professional Contract Drafting Should Achieve

Professional drafting converts a commercial conversation into a document that can be understood, performed, measured and, if necessary, enforced. Before clauses are written, the attorney identifies the correct contracting parties, their legal status, signatory authority and the commercial objective of the deal. Each clause family then defines deliverables, standards, dependencies, payment triggers and deadlines precisely enough to reduce avoidable disagreement.

A good draft allocates foreseeable risks deliberately rather than allowing a generic precedent or a copied clause to decide the allocation by accident. It builds in practical mechanisms for changes, delays, non-performance, disputes, termination and the consequences of ending the relationship, and it uses plain, consistent language and a logical structure without sacrificing legal precision. Length is not the measure of quality: a fit-for-purpose agreement is preferable to a long template containing irrelevant or conflicting clauses. Burger Huyser Attorneys’ Commercial Law / Contracts team builds contracts around the actual transaction rather than recycling a standard form.

Drafting, Vetting, Negotiation Support and Amendments Compared

Service	What the attorney does	Typical starting material	Main output
Bespoke drafting	Builds an agreement around the transaction, parties, risks and applicable law	Instructions, term sheet, proposal, correspondence and supporting schedules	A new contract prepared for review and negotiation
Contract vetting or review	Tests a supplied draft for legal, commercial and drafting risk before signature	The counterparty’s draft or an existing template	Written advice, issue list and/or marked-up draft
Negotiation support	Helps formulate and document proposed changes while keeping the commercial objective in view	Draft, comments and agreed negotiation parameters	Redlines, revised clauses and an agreed final form
Amendment or addendum	Changes selected terms without unintentionally disturbing the rest of the agreement	Signed agreement and the parties’ agreed changes	Signed variation, addendum or restated agreement
Contract health check	Reviews an agreement already in use against operational experience and legal change	Current contract, disputes, change history and performance records	Prioritised corrections and updated drafting

Scope should be clarified at the outset: drafting does not automatically include tax advice, technical due diligence, negotiation attendance, regulatory filings, implementation or later dispute representation unless agreed. “Vetting” is not proofreading — it should test enforceability, risk balance, internal consistency, missing protections and whether the document matches the actual deal.

Requirements for a Valid Contract Under South African Law

Requirement	Drafting check	Risk if mishandled
Consensus	Do the parties genuinely agree on the same material terms, and does the document accurately record that agreement?	Mistake, misrepresentation, duress or unresolved terms may undermine enforceability
Contractual capacity	Can each individual or legal entity contract, and does the signatory have authority?	The agreement may not bind the intended party
Legality	Are the purpose and provisions lawful and consistent with public policy?	An unlawful provision or agreement may be unenforceable
Possibility of performance	Can the promised performance legally and practically be carried out?	An impossible obligation may fail
Certainty	Are material obligations, price mechanisms, deliverables and timelines sufficiently determinable?	Vague terms create interpretation and enforcement disputes
Required formalities	Does this agreement need writing, signature, witnessing, notarisation, registration or another prescribed step?	Failure to comply can invalidate the agreement or limit its effect

Many oral agreements can be binding, but proof is harder and some transactions have statutory formalities. The Alienation of Land Act 68 of 1981 requires that a contract for the sale of immovable property be in writing and signed by the parties or their duly authorised agents, and the General Law Amendment Act 50 of 1956 requires a contract of suretyship to be in writing and signed by the surety (or by an agent authorised in writing), identifying the principal debtor, the creditor and the terms of the suretyship. South African courts interpret these requirements strictly. An attorney should always check the formalities for the exact transaction rather than relying on a general “electronic signatures are valid” statement.

The Attorney-Led Contract Drafting Process

1. Take instructions and define scope — identify the parties, transaction, desired outcome, decision-makers, deadlines, budget sensitivities and whether drafting, review or negotiation support is required.
2. Gather and verify source material — review term sheets, proposals, emails, company records, existing contracts, policies, specifications, licences and prior amendments so the draft reflects the real bargain.
3. Check parties, capacity and authority — confirm legal names, registration or identity details, signatory authority, required resolutions and any role played by guarantors, sureties or third-party beneficiaries.
4. Map the commercial deal and risks — record who must do what, by when, to what standard, for what price, with which dependencies and what should happen in foreseeable failure scenarios.
5. Identify applicable law and formalities — assess common-law validity, transaction-specific legislation, regulatory requirements, execution rules and any industry standards.
6. Prepare and quality-check the first draft — use a logical clause sequence, consistent defined terms, aligned schedules and plain language; test cross-references, dates, amounts, formulas and internal remedies.
7. Review with the client and negotiate — explain material risk allocations, obtain commercial decisions, mark up proposed changes and keep a clear version history rather than editing clauses without an audit trail.
8. Finalise execution requirements — confirm the final parties, annexures, signature method, counterparts, dates, conditions precedent and who must retain originals or reliable electronic records.
9. Manage the agreement after signature — diarise renewals, notice periods, price reviews, milestones and conditions; record variations in the agreed form and review the contract when law or operations materially change.

Key Clauses to Design Around the Particular Transaction

Clause family	Questions the draft should answer
Parties, recitals and definitions	Who is bound, why are they contracting, and are key terms used consistently?
Scope, deliverables and standards	What goods, services or outcomes are required, what is excluded, and how will acceptance be measured?
Price, payment and tax	How is the amount calculated, when is it due, what documentation triggers payment, and how are VAT, interest or disputed invoices handled?
Timing and dependencies	Which dates are fixed, what depends on another party’s input, and what follows from delay?
Warranties and undertakings	Which facts or performance standards is each party prepared to stand behind, for how long and subject to what limits?
Liability, indemnities and insurance	Which losses are allocated, excluded or capped, and is the allocation lawful, insurable and commercially proportionate?
Confidentiality, data and POPIA	What information is protected, who may use it, how must personal information be handled, and what survives termination?
Intellectual property	Who owns existing and newly created IP, what is licensed or assigned, for which territory, duration and permitted purpose, and how are fees or royalties calculated?
Change control	Who may request or approve changes, and how do changes affect price, scope and timing?
Force majeure and changed circumstances	Which events trigger relief, what notice and mitigation are required, and when may prolonged disruption lead to termination?
Breach, cure and remedies	What constitutes breach, whether a cure notice is required, and when damages, specific performance or cancellation may be pursued?
Term, renewal and termination	When does the agreement start and end, does it renew, what notice applies, and what obligations survive?
Dispute resolution and jurisdiction	Must parties negotiate, mediate, arbitrate or litigate; where; under which rules; and can urgent court relief still be sought?
Boilerplate and execution	How are notices delivered, may rights be assigned, how are variations made, what is the governing law, and how may counterparts or electronic signatures be used?

Not every clause belongs in every contract; the drafter should select and tailor clauses to the deal, because irrelevant boilerplate can create contradictions or unintended obligations. Schedules, service descriptions and technical specifications must align with the body of the agreement — they are part of the risk allocation, not administrative attachments.

Contract Types and Their Distinct Drafting Priorities

Contract type	Priority issues to address
Services agreement or SLA	Scope, service levels, dependencies, acceptance, fees, response times, service credits, change control and exit assistance
Sale or supply agreement	Product specification, quantity, price, delivery, transfer of risk and ownership, inspection, rejection, warranties and Consumer Protection Act implications where applicable
Lease agreement	Premises or asset description, rental and escalation, deposit, use, maintenance, damage, improvements, utilities, renewal and termination
Employment contract	Role, remuneration, working arrangements, policies, confidentiality, IP, restraints and compliance with South African labour legislation
Shareholders’ or partnership agreement	Governance, reserved decisions, funding, profit or dividend arrangements, deadlock, transfers, exits and restraint provisions
NDA or confidentiality agreement	Protected information, exclusions, permitted recipients and use, security, compelled disclosure, duration and return or destruction
IP licence or assignment	Identification of the IP, ownership, scope, territory, exclusivity, sublicensing, royalties or price, enforcement and recordal requirements where relevant
Acquisition or disposal agreement	Subject matter, price adjustment, conditions precedent, due diligence, warranties, indemnities, approvals, completion mechanics and post-completion obligations

Use the type list as issue-spotting, not as permission to transplant a standard form without adapting it. A service-level agreement is a specialised service contract: measurable service commitments must connect to reporting, remedies and the underlying commercial relationship. Burger Huyser Attorneys’ specialist consultant J’Retha van Rensburg supports this Commercial Law / Contracts work, and the firm’s directors coordinate the broader transaction where corporate, family-law or litigation input is also required.

Statutory and Regulatory Checks That May Affect the Draft

Not every statute applies to every contract. A bespoke legal review determines which compliance layers belong in the draft. The framework that most often influences a South African commercial agreement includes:

• Consumer Protection Act 68 of 2008 — assess whether it applies to the transaction and parties, then address plain language, fairness, prohibited terms, disclosure and consumer remedies where relevant.
• National Credit Act 34 of 2005 — check whether payment structures, deferred payment, interest, guarantees or related arrangements bring the transaction within a regulated credit framework.
• Companies Act 71 of 2008 — verify corporate capacity, signatory authority, required board or shareholder approvals and transaction-specific requirements.
• Electronic Communications and Transactions Act 25 of 2002 — assess whether electronic contracting and signature methods are suitable and whether an exclusion or another statute requires different formalities.
• Protection of Personal Information Act 4 of 2013 — allocate responsible-party and operator obligations, processing purpose, security, incident handling, cross-border issues and return or deletion of personal information where relevant.
• Labour legislation — align employment-related terms with applicable minimum standards and avoid assuming the contract can waive statutory rights.
• Competition law, tax, VAT and FICA — identify where exclusivity, restraints, pricing, transaction structure, customer verification or reporting needs specialist input.

Electronic signatures are recognised under the Electronic Communications and Transactions Act 25 of 2002, but the Act excludes certain transactions (including contracts of suretyship and documents that require notarisation or witnessing) from advanced electronic-signature recognition. The attorney must check the specific transaction against those exclusions rather than relying on a generic “e-signatures are valid” statement.

Common Drafting Failures and Why Templates Are Not Enough

• One-size-fits-all precedents and copied standard clauses can hide the reason for a provision, carry over the wrong party names or law and allocate risk in a way nobody intended.
• Ambiguous obligations, inconsistent defined terms and vague quality standards make performance difficult to measure.
• Omitting price mechanics, payment triggers, dependencies, timelines, acceptance criteria or termination consequences leaves predictable disputes unresolved.
• Naming the wrong legal entity or failing to verify signatory authority can prevent enforcement against the intended counterparty.
• Missing signatures or transaction-specific formalities can create proof problems or invalidate agreements that require formal execution.
• Schedules and annexures often conflict with the main agreement when copied from operational documents without a legal consistency check.
• Overly broad, one-sided or unlawful clauses can be unenforceable and may damage the commercial relationship even before a dispute arises.
• A remedy clause should not promise automatic cancellation or specific performance; the available remedy depends on the contract, the breach and South African law.
• Uncontrolled edits and informal variations create multiple competing versions; the contract should state how amendments are authorised and recorded.
• A signed contract can become outdated when operations, pricing, law or the parties change, so renewal and review dates should be managed.

For any of these failure points, an attorney-led vetting exercise will pick them up before signature. Burger Huyser Attorneys’ contract vetting service includes written advice, an issue list and marked-up clauses designed to convert a counterparty draft into an enforceable, balanced agreement.

Cost, Turnaround and Preparing to Instruct an Attorney

There is no defensible one-price answer for contract drafting in South Africa. Scope and cost depend on the transaction value and complexity, the number of parties and documents, regulatory work, urgency, negotiation rounds, due diligence, schedules and whether specialist tax, competition, IP or labour input is needed. Turnaround should be agreed after the attorney sees the source material; the engagement should distinguish a target date for the first draft from the later negotiation and signature timeline, which depends on client and counterparty response times.

Ask for a written scope covering deliverables, assumptions, exclusions, fee basis, expected review rounds and who is responsible for commercial and technical information. Bring or send the following to the consultation:

• Correct party details and registration or identity documents
• Signatory and resolution information
• A term sheet or written deal summary
• All existing drafts, side letters and amendments
• Proposals, quotations and relevant correspondence
• Pricing and payment mechanics, including VAT treatment
• Technical schedules, specifications or policies
• Desired deadlines and any known disputes
• A prioritised list of non-negotiable terms and acceptable risks

Avoid promises that an attorney can make a transaction “risk-free” or guarantee enforcement; the service should identify, explain and manage legal risk while preserving the client’s commercial objective.

Ready to instruct on a contract? Burger Huyser Attorneys’ Commercial Law / Contracts practice drafts and reviews contracts, shareholders’ agreements and lease agreements and assists with acquisitions and disposals. To scope an instruction, contact the Linden/Randburg head office at 49 First Avenue, Linden, Randburg on 011 888 0246 or 061 516 6878, Monday to Friday from 7:30am to 4:30pm, with the existing draft and agreed commercial terms ready for review. The firm was named Commercial Law Firm of the Year 2025 – South Africa in the 5 Star Lawyers Awards 2025, reflecting its multi-specialist capability across commercial, family-law, litigation and related practice areas.