Insight
October 21, 2026
Contracts form part of the everyday running of a business, from appointing service providers to renting equipment to supplying goods to customers. Yet, once an agreement is in place, it is often filed away and forgotten. Outdated terms, unsigned documents and automatic renewal clauses can expose a business to unexpected costs and legal disputes. In terms of legislation, understanding and managing these agreements is an important part of compliance.
A contract does not become invalid simply because it is old. However, it may no longer reflect how the parties do business or the legal requirements that apply to their relationship. Services may have changed, additional charges may have been introduced, or the business may be dealing with a different company from the one named in the agreement. When the paperwork and the working relationship no longer match, disagreements become harder to resolve.
Outdated agreements can also leave gaps in how personal information is handled. A service provider may now have access to customer records, employee details or financial information that was never contemplated when the contract was prepared. Businesses should consider whether their agreements properly address the requirements of the Protection of Personal Information Act, 4 of 2013, rather than assuming that a general confidentiality clause covers every information risk.
Unsigned agreements create a different problem. There is a common assumption that a contract cannot be binding unless both parties have signed it. In terms of legislation, many commercial agreements can be concluded verbally or through conduct, although certain transactions require specific formalities. A business that accepts services, pays invoices or instructs a supplier to proceed may therefore be bound by an agreement despite the absence of signatures. The wording of the agreement also matters, particularly where the parties intended that they would only be bound once it was signed.
The difficulty is often proving which terms were accepted. One party may rely on a quotation, while the other points to an unsigned agreement containing different payment terms or limitations of liability. Emails and electronic records can help establish what was agreed. The Electronic Communications and Transactions Act, 25 of 2002 recognises the legal effect of electronic communications, subject to applicable requirements and exclusions. Businesses should therefore treat an email accepting a proposal with the same care they would give to signing contractual paperwork.
Automatic renewal clauses are another frequent source of unexpected costs. A business may decide to cancel a service, only to discover that it needed to give notice several months before the contract expired. If that deadline is missed, the agreement may renew on the terms provided in the contract. Staff changes make this particularly easy to overlook: the person who negotiated the agreement leaves, nobody takes responsibility for the notice date, and payments continue.
The Consumer Protection Act, 68 of 2008 provides specific protections for fixed-term agreements where section 14 applies. Suppliers must generally give notice of impending expiry between 40 and 80 business days beforehand. On expiry, the agreement ordinarily continues from month to month unless the consumer directs that it should end or agrees to a further fixed term. However, section 14 expressly excludes transactions between juristic persons, such as companies, regardless of their turnover or asset value. Businesses should therefore check the agreement and the applicable law before assuming that these renewal protections apply to them.
Keeping contracts under control does not require a complicated system. A central record of agreements, responsible staff members and notice deadlines can prevent many avoidable disputes. Reviews should also take place when services, pricing, ownership or information-sharing arrangements change. Any amendments should be properly recorded and comply with the agreement’s requirements for changes.
Contract management is an ongoing responsibility that continues long after an agreement is signed. Regular reviews, clear records and timely attention to renewal dates help businesses understand their obligations and avoid unnecessary costs. Addressing a gap while the relationship is working well is usually simpler and less expensive than trying to resolve it once a dispute has arisen.
