FINANCIAL AND CONTRACTUAL ASPECTS:
Contract know how:
Contract: a legal agreement intended to create rights & duties between 2 parties when offer
is made & terms & conditions are accepted
Written verbal or silent (eg. Accepting money without disputing in exchange for your
old cellphone)
Contract is valid if…
1. Mutual consent - offer plus an acceptance
2. Person is 18 years old and of sound mind
3. Legal
4. Signed and initialed by both parties and signed by a witness
5. Consent and agreement are voluntary
6. Can perform the contractual obligations
Once contract is signed it is legally binding
Breach of contract: breaking a contract (one party did not do what they promise to do
Legal options for a breach of contract:
o A court orders the guilty person to do as they promised, or they’re
fined/sentenced to jail.
o An interdict from court can prevent guilty person from doing something.
o Can sue other party for damages.
o contract can be cancelled
Consumer protection act: (CPA) has specific provisions for protecting the consumer in credit
agreements & other contracts
companies cant automatically renew fixed term agreements- must give option of
continuing contract, changing its terms or cancelling it
right to cancel contract- 20 working days’ notice given in writing but still pay right
amounts owing (may be charged cancellation fee)
for repairs- a quote must be given and must approve it, any further repairs beyond
the initial estimate must begiven first
right to good quality products, in good working order, free of defects and fit for its
purpose- supplier must inform you about any defects
voetstoots no longer applies except when buying a home
Important guidelines:
- Contract terms and conditions must be explained in such a way that you understand
it
- Read contracts and agreements carefully before signing (Once signed, you are legally
bound)
- Ask questions and for disclosure of the final cost of item such as interest and
compound interest etc.
, Types of contracts:
Employment contracts - Agreement between employer
& employee which must be
signed by both parties plus 2
witnesses
- Protects both parties in terms
of service conditions and
contractual promises
Insurance policies - Agreement between consumer Household insurance: against damage to
and insurance company property and house contents (theft)
- If consumer has experienced
damage/loss of insured goods, Motor vehicle insurance: against loss/damage
insurance company will pay to vehicle (theft)
out a lump sum of money
Medical aid/hospital plan: against medical
expenses and hospitalization
Life insurance: after death of insured
person, lump sum of money is paid to a
beneficiary
Credit agreements - Agreement between consumer Mortgage loan: money borrowed from bank
and credit provider to buy property. Agreement is made to pay
(bank/shop) back the purchase price plus interest over 20-
- Loans used to buy items on 30 years in fixed instalments. Consumer owns
credit whilst agreeing to pay the property once contract is signed but only
amount borrowed plus interest legally owns house once all installments paid
Bank loan: consumer borrows money from
bank and promises to pay back amount
borrowed in full plus interest in fixed
installments over fixed period
Instalment sale/hire purchase: for buying
goods. E.g., large appliances and furniture.
contract Is signed between store and
consumer. 10% deposit or full purchase price
is paid plus fixed instalment over set time
frame. goods are
received by consumer immediately after
signing contract and paying deposit. The
goods are 'hired' until paid back in full. If
consumer defaults in payment - the store can
take back the goods!
Lay-by: A contract between consumer and
store where goods are bought. Deposit is paid,
and fixed instalments are paid over 6 months
until the full price is paid.
No interest is charged! The consumer receives
Contract know how:
Contract: a legal agreement intended to create rights & duties between 2 parties when offer
is made & terms & conditions are accepted
Written verbal or silent (eg. Accepting money without disputing in exchange for your
old cellphone)
Contract is valid if…
1. Mutual consent - offer plus an acceptance
2. Person is 18 years old and of sound mind
3. Legal
4. Signed and initialed by both parties and signed by a witness
5. Consent and agreement are voluntary
6. Can perform the contractual obligations
Once contract is signed it is legally binding
Breach of contract: breaking a contract (one party did not do what they promise to do
Legal options for a breach of contract:
o A court orders the guilty person to do as they promised, or they’re
fined/sentenced to jail.
o An interdict from court can prevent guilty person from doing something.
o Can sue other party for damages.
o contract can be cancelled
Consumer protection act: (CPA) has specific provisions for protecting the consumer in credit
agreements & other contracts
companies cant automatically renew fixed term agreements- must give option of
continuing contract, changing its terms or cancelling it
right to cancel contract- 20 working days’ notice given in writing but still pay right
amounts owing (may be charged cancellation fee)
for repairs- a quote must be given and must approve it, any further repairs beyond
the initial estimate must begiven first
right to good quality products, in good working order, free of defects and fit for its
purpose- supplier must inform you about any defects
voetstoots no longer applies except when buying a home
Important guidelines:
- Contract terms and conditions must be explained in such a way that you understand
it
- Read contracts and agreements carefully before signing (Once signed, you are legally
bound)
- Ask questions and for disclosure of the final cost of item such as interest and
compound interest etc.
, Types of contracts:
Employment contracts - Agreement between employer
& employee which must be
signed by both parties plus 2
witnesses
- Protects both parties in terms
of service conditions and
contractual promises
Insurance policies - Agreement between consumer Household insurance: against damage to
and insurance company property and house contents (theft)
- If consumer has experienced
damage/loss of insured goods, Motor vehicle insurance: against loss/damage
insurance company will pay to vehicle (theft)
out a lump sum of money
Medical aid/hospital plan: against medical
expenses and hospitalization
Life insurance: after death of insured
person, lump sum of money is paid to a
beneficiary
Credit agreements - Agreement between consumer Mortgage loan: money borrowed from bank
and credit provider to buy property. Agreement is made to pay
(bank/shop) back the purchase price plus interest over 20-
- Loans used to buy items on 30 years in fixed instalments. Consumer owns
credit whilst agreeing to pay the property once contract is signed but only
amount borrowed plus interest legally owns house once all installments paid
Bank loan: consumer borrows money from
bank and promises to pay back amount
borrowed in full plus interest in fixed
installments over fixed period
Instalment sale/hire purchase: for buying
goods. E.g., large appliances and furniture.
contract Is signed between store and
consumer. 10% deposit or full purchase price
is paid plus fixed instalment over set time
frame. goods are
received by consumer immediately after
signing contract and paying deposit. The
goods are 'hired' until paid back in full. If
consumer defaults in payment - the store can
take back the goods!
Lay-by: A contract between consumer and
store where goods are bought. Deposit is paid,
and fixed instalments are paid over 6 months
until the full price is paid.
No interest is charged! The consumer receives
