How to Start 2023 on the Right Legal Footing - Part One
There is something wonderful about everything that’s new.
It’s like everyone is given an opportunity to start on a clean slate. Whether it’s embarking on a new year and all the exciting things that the year has in store for you. Perhaps it is starting a new job, buying a new house, moving in with your significant other or getting married.
All marvelous beginnings to what could be, happy, memorable moments in your life.
And if that’s the case, we bet you are going to want to start everything – including the new year – on the right legal footing. After all, nothing can derail your good intentions if you have no legal foot to stand on. Right?
We say this because most relationships – be it romantic, personal to you or professional – have in one way or another, a contract governing the relationship between you and the other person (like an ante-nuptial contract) or you and a particular circumstance (like buying a house or a car).
So, to better prepare you for everything that’s “new” in your life, we thought we would discuss certain contracts that you may come across – what they are for and what they may entail, so that you are better prepared for all the “new” coming your way by ensuring that your contracts are up to scratch.
A reminder - What is a contract?
“a contract can be seen as a “promise that is enforceable by law”. This “promise” refers to certain obligations - on both parties – to either do something or a promise to refrain from doing something. These obligations are then enforced by law. Whether the parties are mutually agreeing to do something or to refrain from doing something, mutual intention is key. A mutual intention will arise due to the offer to contract, consideration of the offer and then either acceptance or rejection of the offer. These can be seen as the essentials to the creation of a contract.”
A contract is therefore a formal, written document which governs the relationship between two or more people in order to specifically achieve, obtain or prevent a specific occurrence or thing. To ensure a valid contract exists there are three requirements –
- Consensus - the parties must agree on all the material aspects (rights and obligations) that will arise from the terms of the contract. Simply put, the parties need to be “on the same page”. There must be a formal offer made and there must be a formal acceptance of the offer. In other words, there must be an intention to be legally bound by the contract.
- Capacity – all the parties to a contract must have the ability to understand the nature and consequence of entering into the contract i.e. parties must understand the result of being legally bound to a contract, either due to age or mental capacity. There must be no impediment to entering into a contract. In South African law, every living person and/or legal entity is presumed to have the capacity to contract unless limited or excluded due to age or other factors.
- Formalities – certain formalities of a contract must be respected. These “formalities” can arise either because they have been prescribed by law or perhaps because the parties have stipulated that certain formalities be met. Being reduced to writing and signed by the parties are examples of standard formalities.
With that done, we can now move on to specific contracts that you may come across, especially when starting or buying something new.
A new job
Going through the “Sunday Scaries” aka panic, anxiety and stress, can take on a whole new meaning when you are starting a new job on top of a new year at the start of a new week. Eeeeek!
There is a mix of excitement at the prospect of your new job at a new company where you can make your mark with a healthy addition of fear - fears of ability and imposter syndrome kick in. And you start to forget why you agreed to all of this in the first place.
You would not be alone in this. In fact, according to various articles and studies (found here, here and here), the number of people suffering from imposter syndrome and feeling like a fraud are as high as 8 out of every 10 people, 3 in 5 workers or as much as 82% of people (according to the aforementioned articles/studies) suffer from imposter syndrome and work fear.
And while we are not in a position (professionally speaking) to address this part of starting a new job, we can advise you as far as your employment contract is concerned – something every new employee should be entering into with their new employer.
An employment contracts is a signed agreement between an employee and their employer. The point of the employment contract is to set out the rights and responsibilities of each party, in a way that sets out – clearly – the working relationship between them.
What does this mean?
Well, an employment contract will provide each party with a clear understanding of what they are expected to do or provide in so far as the employment contract is concerned i.e. what does the job entail and what will be paid for this work (very simplistically). In other words, what are the obligations of each party.
What should an employment contract contain?
An employment contract must contain all relevant (and therefore detailed) information about both the employer and the employee. This will include –
- full names,
- company details,
- phone numbers
- the effective date i.e. the date of commencement of employment and the arising responsibilities of each party,
- duties of employment,
- details of salary and payment date,
- details around a possible termination of employment (as well as the processes involved), as well as,
- possible breaches of the contract.
There is a lot to consider here and going full-steam ahead and signing on the dotted line before you have had a chance to properly think things through or have someone qualified to review the contract for you – could have rather harsh and detrimental effects further exacerbating your “Sunday Scaries” in a way that should (and can) be avoided. At all costs.
Let’s be honest, you are starting a new job, you have anew opportunity to make your mark. Let’s do everything we can to ensure that you start your new job on the right legal footing.
Should you require assistance with your employment contract – ensuring it not only protects you but also ensures that all is fair, get in touch with one of our suitably qualified attorneys – we are more than happy to assist and support you as you embark on your new employment journey.
A new living arrangement
You and your partner have decided to take the next step – it’s time to move in together!
The excitement is real, love is in the air and you and your beloved are feeling all the feels. The one niggly thing – you are not quite ready to get married (and if you were, you would be looking at marriage contracts – read our article on that here). Yet. But you still want to ensure that both you and your partner know “what’s what” – who pay’s the rent, who pays for water and electricity – who is responsible for what.
And we get that. It’s a big step to take, so ensuring that each of you know what your rights and responsibilities are, is key to ensuring that your new living arrangement is a happy one.
But before we get into that, we need to get something off our chest first. We need to clear up a misunderstanding.
We are not entirely sure where this notion of “common law marriage” arose. Seriously. It’s not based in any law in South Africa – so where does it come from? We are baffled.
Nevertheless, there appears to be a long-standing misconception circulating in South Africa that two people who live together – for a long period of time – as husband and wife or in a same-sex relationship, somehow enjoy the same rights, responsibilities and yes, sometimes “benefits” as a couple that has been married in or out of community of property (you can read our article on this here) or have entered into a Civil Union under the Civil Union Act No. 17 of 2006 (the “CUA”) which came into force on 30 November 2006 or the 2020 Civil Union Amendment Act, which was gazetted on Thursday 22 October 2020 and came into effect immediately.
But this is simply not the case – no way, no how.
So, moving in with one another, no matter how serious your relationship is or how long you have been together or indeed how long you have lived together, does not automatically entitle you to anything. Not under South African law.
Therefore, to formalise a living relationship, a cohabiting couple can undertake to enter into a formal, written contract themselves – what is referred to as a cohabitation agreement.
This type of agreement is entered into between a couple that has decided to take that “next step” and move in with one another or indeed a couple that is already living together. In it, they can set out their respective rights and obligations during their relationship. This agreement can also formally regulate the financial (and other) consequences should the relationship come to an end - either because the parties parted ways, or one of the parties passed away.
What are some of the things that can be contained in a cohabitation agreement?
- Who is responsible for paying the rent.
- Who is responsible for the household expenses such as Wi-Fi or groceries (as examples).
- Who is responsible for the water, power, and utilities bills.
- If the parties decide to purchase a property, whose name is it in? Or is it jointly owned?
- What is the situation if the couple decides they no longer want to live with one another? What happens to the property (whether it’s purchased by one of them or jointly, especially if it’s jointly) – the specifics here need to be set out.
- Will there be a duty to maintain one another? If so, this needs to be specifically set out.
- As no automatic rights or obligations arise out of this agreement, it’s important to set out specific things – especially if there is joint ownership of movable items. Who owns what, who brought what into the relationship (so they can take it out), what did they purchase together and how will it be divided? Remember there is no automatic right to ownership of anything owned by the other party – so be specific.
Please remember – with cohabitation, there is no reciprocal duty of support between the parties (like there could be with a married couple – remembering which marital regime they chose). And specifically stating this is important for three reasons –
- If one of the parties maintained the other during the cohabitation situation, the party who maintained the other one won’t be able to claim back that money spent once the relationship has ended.
- There is no enforceable or automatic right to claim maintenance from one another, either during cohabitation or after the relationship has ended.
- Everything the parties agree to – arising from living together – must be explicitly set out in the cohabitation agreement and agreed to (by means of signature) between the parties.
Another important aspect to keep in mind here -
A cohabiting couple does not possess any right to assets in one another’s deceased estate. The only way this can arise is if it’s set out – again explicitly – in a Will (you can read our article on Wills here).
Furthermore, cohabiting parties are not automatically regarded as an heir or dependant of a deceased, as a married spouse would be. In fact, as we have set out previously, if a deceased does not leave a valid Will behind, the Intestate Succession Act 81 of 1987 will apply. This Act sets out that the beneficiaries are, first and foremost, a spouse or descendants or both jointly. Should there be no spouse or descendants, the estate is “left to” and divided among more distant relatives.
Explicitly setting out that a cohabiting party is entitled to assets from a deceased estate by making specific provision for this in their Will is – as a natural conclusion - crucial.
All that said and done, the contents and nature of a cohabitation agreement depend entirely on the specific circumstances of the parties to the contract. Remembering that it must be lawful, not against public morals, must be reasonable, possible and not entered into by means of duress (again, you can read up on our article on Contract Law here).
Should one of the parties fail to perform in terms of the obligations as set out (and freely agreed to) in the contract, then a normal breach of contract would occur and a party would be able to proceed to claim performance based on those grounds (for further info on breach of contract, read our article here).
Should you require assistance with your cohabitation contract – ensuring it not only protects you but also ensures that all is fair, get in touch with one of our suitably qualified attorneys – we are more than happy to assist and support you as you embark on your new living arrangement.
If you have any questions on the information we have set out above or have a personal issue which you want to discuss with a suitably qualified legal professional, please don’t hesitate to contact us at NVDB Attorneys.
We are a law firm that considers honesty to be core to our business. We are a law firm that will provide you with clear advice and smart strategies - always keeping your best interests at heart.