South African Law on Verbal Agreements: Understanding Your Rights and Obligations
In South Africa, verbal agreements are legally binding under certain conditions. As a professional, the purpose of this article is to provide you with a comprehensive guide on the legal framework governing verbal agreements in South Africa.
What is a verbal agreement?
A verbal agreement is a contract that is made orally between two or more parties. It is a contract that is not reduced to writing and is not signed by the parties involved. Verbal agreements can be as simple as a gentleman`s agreement or as complex as a business transaction.
Is a verbal agreement legally binding in South Africa?
Yes, verbal agreements are legally binding in South Africa. They are governed by the common law principle of « pacta sunt servanda, » which means that agreements must be kept. However, for a verbal agreement to be enforceable, it must meet certain criteria.
Firstly, the agreement must be clear and unambiguous. The terms of the agreement must be agreed upon by all parties involved, and there must be no confusion about what is expected of each party.
Secondly, there must be an intention to create a legally binding agreement. In other words, the parties must have intended to create a legal relationship, and not just a casual conversation.
Thirdly, there must be consideration. Consideration is something of value that is exchanged between the parties. For example, if two friends agree that one will mow the other`s lawn, the consideration is the lawn-mowing in exchange for something else of value, such as the payment of a dinner.
When is a verbal agreement unenforceable?
Even though verbal agreements are legally binding in South Africa, there are certain situations where they may be unenforceable. Here are some examples:
1. Statute of frauds – Certain agreements must be in writing to be enforceable. For example, sale of immovable property or long-term leases exceeding one year.
2. Illegality – An agreement that is illegal or against public policy is unenforceable. For instance, an agreement to commit a crime or an agreement that violates human rights.
3. Misrepresentation – If one of the parties misrepresents the facts or conceals information, the agreement may be unenforceable.
4. Lack of capacity – If one of the parties lacks the legal capacity to enter into an agreement, such as a minor or someone who is mentally incapacitated, the agreement may be unenforceable.
What are the benefits of a written agreement over verbal agreement?
While verbal agreements are legally binding, a written agreement provides more certainty and clarity. A written agreement helps to avoid misunderstandings and disputes by setting out the terms and conditions of the agreement. It also provides evidence of what was agreed upon in case of a dispute.
In conclusion, verbal agreements are legally binding in South Africa under specific conditions. However, it is essential to ensure that agreements are clear, unambiguous, and supported by consideration. To avoid disputes, it is also recommended to reduce agreements to writing whenever possible. As a professional, I hope this article has provided valuable insights into the legal framework governing verbal agreements in South Africa.