The one contract clause that could save you R30,000

Not all contracts are standard, and not all clauses are unchangeable. Scrutinise every single clause in your contracts to ensure they are favourable to your business operations.

Practical aspects of litigation - if you can't afford to reach your opponent, you can't take action against them.

The one contract clause that could save you at least R30,000:

One of the first principles in litigation is that, usually, the Plaintiff must sue the Defendant in the jurisdiction in which the Defendant lives or does business.

Practically, that means if you’re in Pretoria, and you contract with a supplier in Cape Town – if that supplier breaches contract, you have to sue them in a Cape Town court, not Pretoria. Over the course of a trial, that can easily cost an extra R30,000 – R50,000.

One of the exceptions to that is where the parties contractually agree to a jurisdiction.

You could add a standard clause like this:

“The parties agree to the exclusive jurisdiction of the Magistrates Court for Pretoria Central for the resolution of any disputes arising out of or in connection with this Agreement, notwithstanding the monetary value of any claim.”

Agreeing to litigate in the Magistrate’s Court can also save on legal fees compared to the High Court – although there are pro’s and cons to consider there too.

Drafting a contract properly and favourably from the start: R5,000 – R10,000

Losing money on a deal, and in the ensuing lawsuit because the contract didn’t support your operations: R100,000+.

Small changes to your contracts can mean the difference between losing or saving significant sums of money in litigation. It pays to draft and negotiate all contracts carefully – even the small print or boilerplate clauses which some think are unimportant, or unchangeable.

The above information is for illustrative purposes only and does not take into account your specific circumstances. It therefore cannot constitute legal advice. Please contact us for comprehensive advice to address your circumstances. Under no circumstances should any person use the above information in an attempt to circumvent the provisions of legislation or contract, or to cause damage to any other person. Always ensure you and your company are in compliance with the law in all dealings.

The information is accurate as of the date of publication.