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Success. Understood TM

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Success. UnderstoodTM

no games, JUST LAWTM
Success is the only OptionTM
your attorneys.

Contracts and business – the tail wags the dog.

It is said that doing business without a contract is stupid business. Never have truer words been spoken.

Nonetheless, it is remarkable that in 2021 so many court cases are filed in regard to businesses not doing business with proper contracts in place. Contracts and business go hand in glove.

Invariably, this results in many lost opportunities, ill-will and frequently the liquidation of companies with the consequent loss of investments placed by investors, particularly in start- up companies.

Why is it then that so many businesses go under due to not making use of proper contracts or any contracts at all?

Evidently, factors such as the type of business entity involved, the size of the business, the kind of business operation and the nature of the business owner, sufficient equity, credit lines, focused efficient labour, effective costs management, to mention a few determines the inclination to do business properly with contracts, or foolishly without.

The understanding of risk aversion is another crucial factor as is the amount of investment by the business owner in the business itself. After all, it is quite easy to play around and take substantial risks with investors’ money as opposed to your own.

Whether it be for lease agreements in regard to office space, office equipment, motor vehicles, or other agreements (in regard to employees, procurement of supplies, licencing, intellectual property, franchising, merchandising, marketing, advertising) the value of a proper contract cannot be underestimated or under-utilised by any entrepreneur. Furthermore, dealing adequately in contracts in regard to legislation that affects all businesses in general terms is also imperative, such as the following legislation:

  1. Companies Act 71 of 2008;
  2. Close Corporations Act 69 of 1984;
  3. Labour Relations Act 66 of 1995 & Basic Conditions of Employment Act 75 of 1997;
  4. Financial Intelligence Centre Act 38 of 2001 & POPI Act 4 of 2013;
  5. National Credit Act 34 of 2005;
  6. Income Tax Act 58 of 1962;
  7. Value-added Tax Act 89 of 1991;
  8. Insolvency Act 24 of 1936;
  9. Business Rescue in terms of Companies Act 2008;
  10. Liquor Act 59 of 2003;
  11. Trust Property Control Act 57 of 1988;
  12. Skills Development Levies Act 9 of 1999;
  13. Unemployment Insurance Contributions Act 4 of 2002;
  14. Occupational Health & Safety Act 85 of 1993;
  15. Electronic Communications & Transactions Act 25 of 2002;
  16. Electronic Communications Act 36 of 2005;
  17. Films and Publications Act 65 of 1996;
  18. Copyright Act 98 of 1978;
  19. Trade Marks Act 194 of 1993;
  20. Consumer Protection Act 68 of 2009;
  21. Competition Act 89 of 1998;
  22. Customs and Excise Act 91 of 1964.

These Acts invariably impact upon any business by imposing obligations and duties in many respects which should be catered for in business contracts or agreements whenever applicable. In addition, there are a multitude of provincial, municipal by-laws which may also be applicable depending on the type of business being conducted.

After all, in the final analysis, is there anything worse for a business person’s reputation than going bankrupt or being prosecuted for contraventions of the law? Not only does this place the business in jeopardy but also the investors’ investment, employees’ jobs and the credibility of the business owner.

ASHLEY SLAMAT ATTORNEYS – Success is the Only option™ ASHLEY SLAMAT ATTORNEYS – Copyright.