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Read Before You Sign Is The Key To Avoiding Disputes, Stress And Costs Of Contracts Gone Wrong

Contracts are a part of everyday life, but it is often only when something goes wrong that many people read them for the first time. By then it is too late to do anything but pay up or accept the penalty clauses that are part of ‘the small print’, and walk away knowing that you have learned one of life’s hard lessons, says Old Mutual.

The problem, says John Manyike, Head of Financial Education at Old Mutual, is that most of us are used to signing papers for everything from monthly instalment deals, credit agreements and new cell phone contracts, to joint venture agreements, employment contracts and even insurance offered online or by telephone. So, when a thick wedge of papers is pushed in front of us, we boldly sign without reading or making an effort to understand the terms and conditions of the contract presuming the integrity of parties involved. 

“This is because we usually believe, or are told, that it is a standard agreement. In some cases, we are told that items have been excluded because they are minor and not worth worrying about. We also often trust a company because they have been around for years.”

“The golden rules are that you should read everything, get help if you can’t understand anything and don’t hesitate to demand that terms and conditions on a contract are changed if they make you unhappy. If the would-be supplier protests walk away. There are always other people wanting to provide service.”

Although many companies are committed to writing contracts in plain English many, do not take this approach. In these circumstances, it is a case of ‘signatory be aware’, says Manyike.

Before signing a contract of any type, it is wise to check that:

  • You fully understand the terms and conditions of the contract placed before you. If a contract has a significant impact on you or if you have any doubts about any clause, get an independent legal expert to go through the document and explain each point to you so that you can make an informed decision.
  • The party you are signing the contract with has a good reputation. Ideally, if you know someone who has dealt with the company to seal a deal similar to yours, discuss their experience and find out if they had contractual problems.
  • It fairly reflects the discussions that took place before the point of signing a contract was reached.
  • Is not one-sided and that one party, usually the supplier of services, is not favoured over your interests.
  • You are not rushed into signing. If the other party says the document must be signed immediately, refuse. Insist that you have enough time to examine it, ask questions and if necessary, refer it to an independent expert for checking. After all, it is you who will bear the consequences if a contract is unfair.

“If you know that you are not an assertive person and feel uneasy because you do not have enough legal knowledge to negotiate a contract, get a lawyer to assist you in meetings. Taking a strong position at the beginning of discussions is better than regretting not doing so when it is too late.”

“In essence, a contract is nothing more than a dispute resolution tool to help in keeping the parties honest to the terms of the agreement and an acknowledgement of the rights of both parties. Contracts are only referred to after signing when one of the parties needs to check on what its duties are, or when disagreements arise about conditions of service, costs, and money.  A good contract means that disagreements can be solved, and life can then go on in an atmosphere of trust and respect.

“Having a good working relationship is preferable to constant arguments because a contract is unclear or unfair. In these cases, relationships often crumble, and both parties lose,” says Manyike.

A warning from artists Amanda Black and Zolani Mahola in the fourth episode of the Old Mutual AMPD Studios Live series, adds personal weight to the importance of contracts.

“Be vigorous in understanding everything about the space that you want to be in. You have to learn the ‘ins’ and ‘outs’ of what you are passionate about and exhaust all the avenues that are involved in it. Unfortunately, artists get taken advantage of because we don’t know” says Black.

Artist Zolani Mahola agrees. “One of the biggest mistakes I made in my career was not seeing myself as a business. I did not take the ownership that I should have. I was leaving my business to other people to handle. Now, I am taking ownership and taking advantage of all the opportunities that were available all of the time.

This advice about contracts and their roles in maintaining both personal and business peace of mind were discussion points in the fourth episode of the Old Mutual AMPD Studios Live series, which is broadcast on MTV Base every Wednesday on DStv Channels 322. For more information about the AMPD Studios Live, go to the AMPD Studios website at To join the AMPD Studio community for updates, events, and invitations, join the AMPD WhatsApp line by WhatsAppíng your name to 081 707 66 36.