Akira had an interview with a potential employer. They discussed many things, including the salary she would get. Her new employer called to tell her she had gotten the job, and asked her to start the following Monday – they would give her an employment contract to sign then.
Akira was excited, but when she read over the employment contract they had given her, the salary was much less. What could she do now? She didn’t have any proof of the offer the interviewer had made her when he interviewed her in person, or when he called her to tell her she got the job.
Scorpion Legal Protection’s advice
The view is generally that a person is not an employee until he/she starts working, which means that for this situation, we have to look at contract law and not labour law. When an employer offers a position to an applicant and the applicant accepts, then a contract has been concluded. At its most basic, a contract is an agreement between two or more parties, whether in writing or verbally.
A verbal or oral contract is an agreement spoken out loud between the parties involved. This is the type of agreement Akira entered into with her employer, and unfortunately, it is not as easily enforceable as a written contract, even when you have witnesses. If what you are agreeing to is very important, rather get it on paper.
What makes a contract binding?
In South Africa, there are certain elements that a contract needs to have to be considered valid and binding. From a legal perspective, there are many aspects that could affect the validity of a contract, but this can be very complicated and could vary from case to case. There are, however, basic conditions all contracts need to adhere to in order to be considered valid.
- Consensus: When entering into a contract, the parties must agree to everything contained in the contract. This agreement must be voluntary. A contract needs to list all the obligations that each party expects the other to fulfil.
- Capacity: All parties must have the necessary legal capacity to contract. This means that a contract might be found invalid if one or more of the parties is a minor (i.e. younger than 18 years of age), a person disqualified by law (for example an un-rehabilitated insolvent), or if that person is not of sound mind.
- Legality: Once it has been determined that the parties have the capacity to contract, the contract itself needs to be lawful. If what is agreed upon in the contract is illegal, it is unenforceable. For example: if you pay a bribe to somebody who promises to get you a job, you cannot go back and sue that person for breach of contract and claim your money back in the event that they fail to deliver/get you that job, because the agreement itself is illegal.
- Possibility of Performance: The commitments you undertake in the contract must be possible at the time of entering into a contract, meaning a contract will be invalid if a party is unable to fulfil the contractual obligations.
According to case law, a valid and binding contract is considered to have been concluded as soon as the employee accepts the employer’s offer by signing the employment contract. Since Akira has no proof of the verbal contract between herself and the employer, she has no legal recourse. The best she can do is speak to her employer and the person who interviewed her, and try to negotiate her salary before signing the employment contract.
Tip:
- Verbal contracts are extremely difficult to enforce, even if you have a witness. If it’s something important, always get it on paper or on email, and keep a copy of it somewhere safe.
- Never enter into a contract without knowing exactly what you are agreeing to. If you don't understand something that is included in a contract, do not sign it.
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* Terms, conditions, limitations and exclusions apply (click here to view the Legal Membership Agreement). This is only basic advice and cannot be relied on solely. The stories, names, characters and incidents portrayed are used in a fictitious manner.