Insist on a non-variation clause

Private Property South Africa

Leave nothing to chance by insisting on inserting a non-variation clause in all your property contracts.

Although it has been stated time and again that any changes to a contractual agreement should be reduced to writing, it seems that there are still instances where people conduct their affairs based on verbal arrangements. Unfortunately, when things don’t work out as planned, verbal arrangements tend to backfire.

When it comes to contracts, South African law firm DTS Attorneys says it’s important to include a non-variation clause which provides that no variation of the agreement is of any force or effect unless it is in writing and is signed by all parties. A recent high court case resulting from a property dispute illustrates why this is the case.

‘The restaurant that fell on hard times’

A restaurant owner who rented a premises in terms of a lease agreement containing a standard non-variation clause fell on hard times and ran up rental arrears. The landlord cancelled the lease and gave written notice to the tenant to vacate the premises. When the tenant refused to vacate, the landlord approached the court for an eviction order.

The tenant’s defence was that it had been verbally agreed with the landlord that a reduced rental set at 25% of the daily takings would be paid. The tenant argued that it had complied with this alleged “compromise agreement” and that it should not therefore be evicted. The tenant also argued (citing public policy considerations and the certainty principle amongst other legal principles) that an oral agreement should suffice under the circumstances.

Unfortunately for the tenant the court saw otherwise and commented that when parties to a contract impose restrictions on their own powers to vary the contract “they do so to achieve certainty and avoid later disputes.” The court granted the eviction order and gave the tenant five days to vacate the premises.

The upshot is that it is clearly imperative to protect your interests and avoid ambiguity by having a contract that contains a non-variation clause, worded correctly to suit your particular needs. Without it, you could end up arguing through a succession of courts. Moreover, comply strictly with the clause no matter how great the temptation may be to accept verbal undertakings and agreements from the other party. Onerous as it may seem, compliance with the formalities in this instance is essential.

Even if by some chance your agreement allows verbal amendment or cancellation, still reduce everything to writing to avoid uncertainty and dispute down the line. And beware casual correspondence regarding contracts. You could inadvertently amend or cancel an agreement by email or other electronic messages which can amount to both a ‘written’ and ‘signed’ agreement. As such, when dealing with matters of this nature, it’s wise to hire the services of legal professionals to avoid any ambiguity which could cost you dearly in the long term.

Some of the points listed in this article originally appeared in LawDotNews and are reproduced with the kind permission of DTS Attorneys Port Elizabeth and DotNews.

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