Wanneer moet ’n kontrak in die teenwoordigheid van getuies onderteken word en is dit ’n formaliteitsvereiste vir ’n geldige en bindende ooreenkoms?
October 1, 2018
Belasting op Toegevoegde Waarde (BTW) – Registrasies, Nulkoersvoorraad en Vrygestelde Lewerings
October 1, 2018

When should a contract be signed in the presence of witnesses and is it a formal requirement for a valid and binding agreement?

During the signing of documents, it is common for two witnesses to sign the document together with the contracting parties. The purpose of this is that if a dispute arises between parties, witnesses can be called to testify that the parties have signed the agreement and that those are in fact the signatures of the parties involved. However, more and more documents are being signed electronically and the parties and witnesses are no longer in the presence of each other during the signing. In some cases, witnesses are not always available to sign the documents, and it is simply omitted to let witnesses sign. 

Considering the above, the question often arises whether it is a formal requirement that an agreement is signed in the presence of witnesses and what its effect is on the enforceability of the agreement.  To answer this question, it is necessary to understand that although it is common practice to reduce agreements to writing, it is often not a requirement for a valid and enforceable agreement between the parties. In most cases, a written agreement is a mere reflection of the prior oral agreement concluded by parties and the terms and conditions thereof. Such an oral agreement is valid and enforceable between the parties, even though it is not in writing, although parties still prefer to set out their intentions in writing, in case a dispute arises in the future.  

In terms of current legislation, it is stipulated that certain agreements must be in writing and that they should be signed by the parties and in the presence of two competent witnesses. Examples of these agreements are: 

  • Wills, as determined by the Wills Act of 1953; 
  • Agreements in terms of which immovable property is disposed of, as determined in the terms of the Alienation of Property Act of 1981; and 
  • Suretyship agreements 

Consequently, it is important to ensure that, if required by law, witnesses must sign the agreement. In cases where this is not a requirement, it is up to the parties themselves to decide whether they should sign the agreement in the presence of witnesses. However, this will not affect the validity of the agreement if it is not required by law. 

Should you have any further inquiries regarding this matter or if we can assist you in getting a verbal agreement in writing to prevent any later possible dispute, please contact Tiaan Jordaan at tiaanj@asl.co.za