A contract is succinctly defined as an agreement between two or more parties towards the execution of certain terms. A contract by its nature has fundamental requirements for it to be valid and enforceable. These requirements consist of, firstly, an offer which must be extended by the offeror to the offeree, which offer must be clear and precise and consisting of all terms of the contract. This offer must be accepted in its totality by the person being offered the contract. The parties to the contract must be in total agreement and have what is referred to as a meeting-of-the-minds. This would usually lead to a contract coming into force and which is binding between the parties.

There are however a set of further requirements when it comes to certain types of contracts. Not only this, but where the offer, acceptance, and agreement to the terms do not conform to the standards required, a contract will also be unenforceable.

A breach of contract refers to infringement of the terms and conditions which were agreed upon by the parties in a binding contract. Contracts are binding, however there can be a breach before the contract even becomes in force.

There are countless reasons why a contract was not able to be executed, or why there never was a contract in the first place. The following elements will result in a breach of contract if the contract did not meet the requirements of law and business:

IN WRITING
In most instances, a contract is considered to be enforceable whether written, oral or tacit. Various contracts can be concluded between the parties with a handshake. However, in South Africa, there are a few contracts that must be written to be enforceable: An agreement to sell immovable property (land, house, or building); Suretyship agreements, credit agreements, antenuptial (marriage) contracts, long term leases (over ten years), and contracts for executionary donations, franchise agreements to name but a few. These specific contracts and agreements have statutory specifications to which they must comply, ranging from conforming to the Consumer Protection Act, 68 of 2008, all the way to the Matrimonial Property Act, 88 of 1984.

Should you conclude a contract which fails to meet the specific requirements, it might end up that a Court of law bears the contract to be invalid and unenforceable.

LACK OF CAPACITY
Both parties must have the legal capacity, to agree to the terms of the contract. He or she must have the mental and contractual capacity. This being a wide-ranging requirement, where both parties are to satisfy themselves fully, by doing a due diligence, into whether the other party has the legal capacity to enter into the contract. It is expected that you should satisfy yourself that the person with whom you are entering into a contract with is a major. You are required to satisfy yourself that the other party is mentally capable and able to appreciate all terms to the contract. There are many examples of required capacity for both parties, and it is important to be able to say that you did your due diligence towards whether the other person knows and understands, and is capable of knowing and understanding, the terms of the contract. Where a person is later found to have been unfit or unsound of mind when they entered into a contract, and it was reasonable to have known of their incapacity, this could potentially lead to the entire contract becoming unenforceable. The understanding behind this is that a person unfit or unsound of mind would not be able to understand and thus accept, all the terms of a contract when they entered into it.

DURESS AND UNDUE INFLUENCE
If a contract is entered into through improper means, that contract cannot be enforceable. Parties to a contract must willingly agree to enter into a contract without being coerced, forced, threatened or otherwise placed in a position which does not equate entering into the contract of their free volition. Any party in a contract who is of the opinion that they were coerced, bullied or forced when entering into a contract will be able to raise this as a defence for declaring the contract void and unenforceable. The types of duress can range from being threatened with violence unless you enter into the agreement, all the way to being threatened with a pay reduction from your employer if you do not enter into a new contract. It is important that the meeting-of-the-mind between two parties come about by way of their own volition and freedom of choice to contract.

ILLEGALITY AND FRAUDULENT INDUCEMENT
It might be somewhat self-explanatory to state that if a contract is for the execution or involvement of something illegal, then it can never be enforced. An example being that if person A entered into a verbal agreement for the production and sale of beer towards person B, whilst there is a legal ban on the sale of alcohol during Covid, then it would be held that the contract was unenforceable and unlawful. Some contracts, either oral or in writing, may still not be enforceable, if despite it being legal, it is held to be contra bonis mores (which means against public policy or norms). The societal requirements for some contracts to be done in good faith, and to be executed by way of societal expectations also plays a part in the process of contracting. You must also always keep in mind if you put your contract to the society at large, would they accept it to be a valid contract.
The above culminates to state that entering into a contract is not a clear-cut-case each time. There are specific requirements for all types of contracts which must be followed before (and not just after) the parties conclude a contract. It is important to think ahead and ensure that you have surveyed and satisfied yourself towards all terms and points of the contract.

Mental Health