Legal Articles

There are many disputes that come from contracts that were based on verbal agreements between two or more parties.

Although there is no paper trail that can prove a verbal contract, verbal agreements are as legally binding as written and signed contracts.

Verbal Agreement Law in South Africa

Some agreements require written agreements or contracts to be drawn up and signed, for example, antenuptial contracts, sale of immovable property and wills to name a few.

The following are advantages of having a written contact in place based on conversations between parties:

• Creates and maintains trust between parties
• Creates transparency between parties
• Ensures all parties are fully aware of the contents of their agreement
• Stipulates formalities and obligations that must be met in order to be valid
• Serves to help avoid unnecessary disputes between partied involved

Verbal Agreements and Electronic Communication

According to the Electronic Communications and Transactions Act (ECTA) 25 of 2002, all electronic messages are considered to be equivalent to writing.

Therefore, all electronic communication is as legally binding as agreements that are in formal writing on paper.

However, it’s important to note that the ECTA requires data messages to be easily accessible to all parties involved.

Do Verbal Agreements Stand Up in Court?

It’s advisable to always draw up written agreements as verbal agreements offer little to no definitive record of the details of the agreement as discussed.

Lack of evidence and proof of terms of contract makes it particularly difficult to solve in court when disputes arise.

Agreements should include all the relevant information and guidance to partied involved in order to ensure a fair resolution of disputes.

In addition, written agreements should include the following:

• Steps to take in order to cancel the agreement
• What constitutes a breach
• How a breach should be addressed or remedied
• Information regarding how changes may be made to the agreement, if any at all

This prevents disputes based on “he said, she said” as everything is recorded via some form of electronic messages.

However, it’s important to note that the name of the sender must be signed at the end of the message in order for it to be valid.

Such electronic signatures should be specifically mentioned in the agreement as a requirement when amending the agreement.

Van Deventer & Van Deventer Incorporated – Attorneys South Africa

Electronic communication is considered as legally binding as formal written agreements and verbal agreements are also binding in this way.

However, it’s advised to avoid entering into any form of verbal agreements as there is no way of proving the terms of the agreement during disputes.

For more information on the verbal agreement law in South Africa, please feel free to contact our attorneys in Cape Town and Johannesburg today.