Contract law is a cornerstone of our legal framework, regulating a multitude of transactions and relationships, both in the professional and personal spheres. Contracts are the bedrock upon which promises are established, duties are defined and disputes are settled. This can range from the handshake agreements of days long gone, to the highly complex paperwork of contemporary corporate interactions.


Not only do legal professionals need to understand the foundations and finer details of contract law, but any person involved in the trade of goods, services, or promises must also posses this vital ability. An unshaken ability to understand the basics of contract law enables you to handle these encounters with assurance and clarity, regardless of your role in the process – whether you are a freelancer negotiating terms with your customers, a business owner drafting agreements with various suppliers, or just a consumer entering daily transactions. 

In this article, we take a tour of the fundamentals of understanding contracts, examining the main ideas, components and finesses. We seek to demystify this complex legal aspect by providing basic insights and helpful advice along the way, covering the basic elements of a legitimate contract. This article seeks to assist you in understanding the complexities of contract law. By the end, you’ll have a fresh understanding of the significance of contract law in day-to-day life, as well as the assurance and clarity to enter into contracts. So, let’s explore the fundamentals of contract law and shed light on how to approach contracts. 

One of the main reasons people often fall onto the butcher’s block of contract law, is because they are unaware that they are entering into a contract, because contracts are all around us, like Cape Town tourists in December. 

As excellently illustrated by François Smuts in his book “South-African Law: What You Should Know”, contracts are much more present than we tend to think about. The simple instance of installing a TV satellite and merely signing with the technician, renting a car, buying property, signing up for a new medical aid. Every contract is not necessarily one with fine print and more legalese than a standard law textbook. Essentially, a contact is an agreement between two or more people. 

Contracts cover a wide variety of topics, contracts for various purchases, hire, receiving or providing services, insurance, to establish a trust, etc. Even though each type of contract has their own additional requirements, some remain steadfast regardless of the type of contract, these requirements are contractual capacity, consensus, possibility, certainty, formalities, and legality.


Contractual Capacity
Persons with contractual capacity posses the ability to transact business independently and with such persons one can negotiate freely. Upon reaching the age of majority (18), an unmarried person will legally acquire full contract capacity 

For a contract to be valid, there must be consensus (i.e. ‘meeting of the minds’ between those seeking to enter the said contract). This consensus must cover all material terms of the contract. There must have been an intention between the parties to enter into the contract and have the terms be binding between them. It requires a clear and certain offer as well as an unconditional and unequivocal acceptance. 

The commitment undertaken must be performed, as well as have the possibility of being performed upon the agreement being entered into. Should it be objectively impossible of being performed, the contract will not create any legal obligations. 

The terms and conditions of the contract must have clarity and be precise. All involved parties must have a clear understanding and interpretation of the terms. A contract serves as a complete and final agreement, there is no room for ambiguity or misunderstanding. 

The formalities of a contract can be stipulated by the parties themselves, or they can be prescribed by law. For example, the contract must be in writing and undersigned by all involved parties. 

The agreement sought to be entered into must be lawful, it must not be prohibited by statute or common law. 

What do you think?
Understanding certain key concepts of contract law are quintessential to grasping the complex network of agreements that govern these professional relationships. Nonetheless, consulting a legal professional is essential to avoid any legal problems and to provide you with the highest level of protection and clarity in contractual relationships. Armed with a vast array of information, seeking the advice of a legal expert will give you the confidence and a know-how guide to allow you to successfully understand, interpret and enforce contracts.

The content does not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. Kindly contact us on or 021 556 9864 to speak to one of our attorneys.


Naomi Engelbrecht

Naomi Engelbrecht

Naomi Engelbrecht joined CK Attorneys as a Candidate Attorney in 2024.

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