Why Using Foreign Contract Templates in South Africa Can Backfire
It has never been easier to download a contract template online. A quick search brings up countless employment agreements, shareholder agreements, or service contracts, often drafted in the UK, US, or Europe. At first glance, it looks like a great way to save time and money.
But here’s the problem: a contract written for a foreign legal system can cause more trouble than it solves in South Africa.
Different Legal DNA
One of the biggest differences lies in the idea of consideration.
In the UK, a contract usually isn’t enforceable unless each party gives “something of value” in return. This is why UK contracts are full of wording like “in consideration of the mutual promises contained herein…”. Without it, the contract may fail.
In South Africa, consideration is not part of our law at all. What matters is whether there was agreement, lawful cause, and an intention to be bound. A contract can be valid even if only one side is receiving a benefit.
That means many UK-style clauses are either meaningless here, or they create confusion about whether the contract is binding.
Other Pitfalls of Using Foreign Templates
Jurisdiction Clauses
Many overseas templates automatically say disputes must be resolved in London, New York, or another foreign court. As discussed in an earlier article, under South African law, those clauses are not always enforceable, especially in employment and consumer matters.Employment Contracts
UK employment agreements are built around British law. They don’t reflect South Africa’s Labour Relations Act or Basic Conditions of Employment Act, which apply no matter what the document says.Terminology Gaps
Words like “warranty”, “best efforts”, or “indemnity” carry different meanings under South African law than in foreign case law. That can leave important rights uncertain.
The Practical Consequences
A contract might end up unenforceable in our courts.
Businesses can spend thousands litigating over clauses that simply don’t make sense in South African law.
Employees or contractors may succeed in CCMA disputes even where a foreign-style contract says otherwise.
A Safer Approach
Foreign templates can be a useful starting point, but they should never be used wholesale. At a minimum, they need to be reviewed and adapted to South African requirements. The safest option is to have contracts drafted locally, tailored to your business.
Final Word
What looks like a quick win, using a free or foreign template, often costs more in the long run. South African law has its own requirements and quirks. Ignoring them risks leaving your contract worthless at the very moment you need it.
At Salitan Attorneys, we review, adapt, and draft contracts so that they work under South African law. Whether you’re setting up employment agreements, shareholder arrangements, or service contracts, we’ll make sure your contracts do what they’re supposed to: protect you.
📩 Contact us today for advice on your contracts.
