Whether you’re buying property, entering a business partnership, or finalising a divorce settlement — one thing’s for sure: contracts are not just paperwork. They are risk documents. And what you don’t understand can cost you dearly.
At Shapiro & Haasbroek Inc., we’ve seen people lose homes, pay hidden penalties, and end up in court battles — all because they didn’t read the fine print. Here are 5 common contract clauses that can cause serious legal and financial problems if left unchecked:
- Vague or Missing Termination Clauses
Most contracts should include a clear “exit strategy.” If the agreement doesn’t specify how and when either party can terminate, you’re effectively locked in — even when the relationship breaks down.
Pro Tip: Look for notice periods, penalty fees, and mutual termination terms.
- Unfair Liability Clauses
Some contracts push all responsibility onto one party — usually the one with less legal knowledge. These “limitation of liability” clauses often shields one party from lawsuits, even if they are at fault.
Look out for: Phrases like “indemnify” or “hold harmless.”
- Ambiguous or Unenforceable Payment Terms
If your payment structure isn’t airtight, you could be left chasing unpaid invoices or facing penalties. Contracts should specify:
- Amounts
- Deadlines
- Late payment consequences
Watch for open-ended timelines like “upon completion” or “when feasible.”
- No Dispute Resolution Clause
When things go wrong (and they do), how will the dispute be resolved? If your contract doesn’t specify arbitration or mediation, your only option may be court — which is slow and expensive.
Best practice: Build in a clause for alternative dispute resolution (ADR).
- Reliance on Verbal Agreements
South African law does uphold verbal contracts — but good luck proving one in a dispute. Always insist on written records, and ensure your contract reflects what was discussed.
If it’s not in writing, it doesn’t exist. Period.
Contracts are meant to protect you — but only if they’re clear, balanced, and legally sound. Before signing anything with legal or financial consequences, take the time to understand every clause and consider the long-term implications. The fine print isn’t just formality — it’s where your rights are won or lost..
