We are often approached by clients who have signed 12-month, 24-month or even 60-month contracts with service providers, and who feel that they are not getting adequate service levels. We are then asked to get them out of the contract.
Sadly, it happens far too often that clients sign contracts without understanding the terms clearly, and without realising that the terms could be negotiated.
For example: Joe is approached by a service provider offering to provide phone lines to Joe’s business. In pitching the service, the salesman makes a number of verbal promises to Joe, but then presents him with a “standard contract” which does not contain the same promises, but which does contain the following clause in the fine print:
“This agreement represents the entire agreement between the parties, and there are no warranties or representations, expressed or implied, between the parties except those expressly set forth in this agreement.”
A fair and very common clause, but one which will make it very difficult for Joe to prove that the service provider made other promises which it should stick to.
Joe doesn’t think to negotiate the terms of the contract, or to insist that the service provider set out exactly what levels of service it will provide. He doesn’t fully understand the contract, but thinks everything will probably be fine, and signs it anyway.
After 8 months, Joe is fed up with the poor quality of service he has received, and wants to cancel the contract. Unfortunately, he discovers that he has bound himself to a 60-month contract period with the service provider, at R2,000.00 per month. To make matters worse, there are no clear terms in the contract setting out exactly what services the company would provide to him, and now Joe will have a hard time proving what services he was entitled to. If Joe cancels the contract, he may face a lawsuit for payment of the remainder of the contract period (52 months x R2,000.00 per month = R104,000.00).
Litigation becomes very expensive, and Joe may now find himself paying over ten times more in legal fees than he would have, had he asked us to help him review the contract first before signing it.
How can you protect yourself from an unfair contract?
Before signing the contract, get an attorney to help you review it.
This is by far the most cost-effective way to protect yourself. An experienced contract attorney will:
help you understand the complex legal terms in a contract;
advise you whether to accept or reject certain terms; and
suggest terms of your own to protect your rights and interests.
It is far better to go through the inconvenience of thoroughly understanding a contract before you sign it, than to have to fight with the provider and go through litigation later to try get out of a contract.
Ask the other party to give you all verbal representations made in writing, as part of the contract.
Remember: although, in practical terms, some providers will not be willing to negotiate the terms of their contracts, and may tell you the contract is “standard” or “not negotiable”, there is no law that says that a contract cannot be negotiated. Consider either insisting on negotiating certain terms, or vote with your feet by considering other service providers.
If you have already signed the contract, there may be ways you can get out it (“cancel”):
1. Try to cancel the contract amicably.
It’s sometimes easier to have an honest, upfront conversation with the other party and explain to them calmly that you are not happy with the service. Present concrete examples of why you believe the other party has not lived up to your expectations. You may find that there has been a miscommunication, or that they improve the service in order to retain you as a client.
If you have tried this without success:
2. Consult with us to find out if there are substantive or technical reasons by which you can cancel the contract.
There may be evidence you can rely on to prove you should be entitled to cancel, or, there may be technical grounds which render the contract invalid or unenforceable. For example:
You may have a remedy in terms of legislation like the National Credit Act or Consumer Protection Act;
There may be legal requirements prescribed by other legislation for certain types of contract (e.g: lease agreements) which have not been complied with, thereby rendering the contract invalid;
The contract may be based on a mistake, fraud or misrepresentation, entitling you to cancel; or
It may be impossible to perform under the contract for some reason.
Contract law can become highly technical, and you should consult with a contract attorney before risking an expensive lawsuit. If you are considering signing a contract, let us help you understand it first. To find out more or to arrange a consultation with one of our contract attorneys, call us on (012) 004 1296 or email us at firstname.lastname@example.org.