How to Deal with an Unfair Agreement

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Have you been presented with an unfair agreement (like an IT Contract or a commercial lease agreement) to sign by a vendor, service provider or landlord? For example, when you license software, procure cloud storage, buy hardware, rent premises, rent copiers or need lifts serviced. Often these agreement are badly drafted and very one sided in the other party’s favour. In the past, people have given these agreements to their legal advisor or attorney to review and comment on. The review often results in a lot of suggested changes. Making it fair requires almost a rewrite of the agreement. It goes back to the other side’s legal advisor and before you know it, you’re playing a game of legal ping pong.

A solution for an Unfair Agreement

We have come up with an idea that works well. It involves sending the counterparty an email at the beginning of the negotiation dealing with the impact of the Consumer Protection Act on agreements (like leases). It can make the vendor (or landlord) make the changes and reduce your legal fees. And result in a fair contract in which you are protected.

If your turnover is less than R2 million, you simply respond as follows:

Hi,

Our attorneys have reviewed your agreement and in their view, it is badly drafted and one-sided in your favour.

Our turnover is less than R2 million and we are therefore a consumer that enjoys protection under the Consumer Protection Act (CPA). Please could you make your agreement complaint with the CPA.

If you are not prepared to give us the protections that Parliament has decided that smaller organisations should be given by law, we will have to reconsider contracting with you.

Kind regards

If your turnover is more than R2 million, you simply respond as follows:

Hi,

Our attorneys have reviewed your agreement and in their view, it is badly drafted and one-sided in your favour.

Our turnover is more than R2 million and we are therefore not a consumer that enjoys protection under the Consumer Protection Act (CPA). However, we see no reason why we should not have the same protections that you are required by law to give to smaller organisations. Please could you either make your agreement complaint with the CPA, or send us the version of the agreement that is compliant with the CPA and that you ask smaller organisations to sign.

If you are not prepared to give us the same protections that Parliament has decided that smaller organisations should be given by law, we will have to reconsider contracting with you.

Kind regards

By | 2017-03-30T13:22:28+00:00 October 7th, 2010|Categories: IT Contracts|Tags: , , , , , |