Verbal Loan Agreement South Africa

If two or more parties reach an agreement without written documents, they will enter into an oral agreement (formally known as an oral contract). However, the authority of these oral agreements can be a bit of a grey area for those who do not know the law of contracts. Clearly, the boundary between these “substantive contexts” and other “circumstances” is correct. Indeed, it has been argued that the distinction between substantive and environmental circumstances is incorrect. “Perhaps, as Lewis AJA said in Van der Westhuizen v. Arnold, it is a distinction without distinction.” [137] It is clear that “substantive circumstances” are always allowed, while “circumstances” are only allowed if language treatment is unsuccessful, i.e. where there is ambiguity. However, what divides them on the merits is not clear. The substantive circumstances are “probably important to the parties when they have entered into a contract”[120] while the circumstances have been defined as “what happened between the parties during the negotiations prior to the conclusion of the agreement”. [138] However, it is clear that “what happened between the parties in the negotiations leading up to the conclusion of the agreement” is very often “issues that are likely present for the parties when they have contracts.” In practice, it is so difficult to separate them that “no one knows exactly what the dividing line is between the two categories.” The whole procedure has been “unsinsed by inertia”[131] and the future usefulness of the distinction is called into question. Written agreements should also stipulate that changes to the agreement are not valid if they are not written (and signed by both parties) – preventing disputes over the amended terms of the agreement.

This also prevented arguments of a “he said she said” nature, since everything was recorded. As mentioned above, this can be done by email or other e-mail messages, including Whatsapp, for example, the sender`s name must be signed at the end of the message for it to be valid. However, the integration rule is only a backstop; it comes into force in the absence of a more dominant rule. It does not work when an aggrieved party accuses of fraud, misrepresentation, error, inappropriate influence, coercion or illegality, since in such cases it is the basis of the document that is problematic and not its interpretation.