The words a contract turns on.

Exempted Micro Enterprise: a business under the turnover threshold, which gets a B-BBEE level by sworn affidavit rather than verification.

An affidavit instead of a verification certificate saves real money and time. The threshold and the level depend on which code applies, and construction has its own sector code.

B-BBEE Codes of Good Practice; Construction Sector Code

Scorecard elements rewarding spend with, and support of, black-owned suppliers and small enterprises.

For a client, ESD points are a commercial reason to buy through a verified black-owned panel rather than a compliance cost. For a supplier, they are a reason a buyer will take the meeting.

B-BBEE Codes of Good Practice

A misrepresentation of black ownership, management or control to obtain a B-BBEE benefit.

A criminal offence, not a scorecard problem, and conviction bars the firm from contracting with the state. There is no version of it that is worth the contract.

B-BBEE Act 53 of 2003, s 13O and s 13P

Qualifying Small Enterprise: the tier between EME and generic, with a reduced scorecard.

Crossing the turnover threshold from EME to QSE changes your compliance cost overnight. Worth knowing where the line is before the year you cross it.

B-BBEE Codes of Good Practice

The conflict when each party's standard terms claim to govern the same deal.

Your quote's terms versus their purchase order's terms. Whoever fires last before performance usually wins, so the acknowledgement of order is the document that matters.

Common law

The threshold question deciding whether the Consumer Protection Act applies to a transaction.

A homeowner or a body corporate may be a consumer; a large juristic person is not. The same limitation of liability clause behaves completely differently against each. This is why the client pack needs two variants.

Consumer Protection Act 68 of 2008, s 5

Standardised international trade terms allocating cost, risk and responsibility between buyer and seller.

The word after the price changes who pays for freight, insurance and duty and where risk passes. Imported plant and materials are priced on this and most quotes never say it.

ICC Incoterms rules

A clause keeping ownership of goods with the seller until payment in full.

The difference between recovering your materials and joining the queue of concurrent creditors when a client goes under. Cheap to include, valuable exactly once.

Common law

The requirement that terms limiting risk, assuming risk, or imposing an indemnity be specifically drawn to a consumer's attention.

Burying a limitation in small print does not work against a consumer. It must be conspicuous and separately acknowledged, or it fails.

Consumer Protection Act 68 of 2008, s 49

A promise to answer for another's debt.

Void unless in writing and signed by the surety. A director's verbal assurance that they stand behind the company is worth nothing.

General Law Amendment Act 50 of 1956, s 6

Submitting a deliberately high bid so another bidder wins, creating the appearance of competition.

Widely treated in construction as a favour rather than a crime. It is collusive tendering and it is what the 2013 construction settlement was about.

Competition Act 89 of 1998, s 4(1)(b)

The per se prohibition on price fixing, market division and collusive tendering between competitors.

Per se means there is no efficiency defence and no "everyone does it". Penalty up to 10% of turnover, and since s 73A a personal criminal offence for the director involved.

Competition Act 89 of 1998, s 4(1)(b) and s 73A

A fast, contractually agreed dispute process producing a decision that binds temporarily until arbitration or litigation overturns it.

Designed to keep cash flowing during a project. "Pay now, argue later." Underused in South Africa relative to how much it would help a contractor's cash position.

Contractual; JBCC, NEC, FIDIC, GCC 2015

A subcontract drafted so its terms mirror the main contract, passing obligations and timing down.

Without it you can owe your client damages on terms you never passed to the subcontractor who caused them. This is the single most common gap in a small contractor's paperwork.

Drafting practice

A measured schedule of the work, priced item by item, forming the basis of the contract sum.

An error in the BOQ is usually the employer's risk in a re-measurable contract and the contractor's in a lump-sum one. Know which one you signed.

Contractual; standard method of measurement

The window after completion in which the contractor must return and fix defects.

It is not a warranty of quality forever, and it is not the same as your prescription exposure, which is longer. Know both dates.

Contractual

A contractual entitlement to more time where delay is caused by defined events.

An EOT protects you from penalties. It does not automatically get you money: that is a separate claim for preliminaries and general costs, and it must be claimed separately.

Contractual

A defect not reasonably discoverable on inspection at the time.

Survives practical completion and the defects liability period. This is the long tail of construction risk and it is what professional indemnity cover is for.

Common law

A pre-agreed sum payable per day or week of delay, replacing proof of actual loss.

Genuinely useful to a contractor because it caps delay exposure at a known number. The mistake is agreeing a rate without checking it against the contract value.

Contractual; Conventional Penalties Act 15 of 1962

A subcontract clause making payment to the subcontractor conditional on the main contractor being paid.

Commercially attractive to a main contractor and heavily disliked by courts and by cidb procurement policy. Check enforceability before relying on it, and expect resistance.

Contractual; check cidb Standard for Uniformity

A certificate issued by the principal agent stating the amount due for work done.

In most standard forms the certificate itself creates the debt. That means an uncertified but completed amount may not yet be a claim, and a certified unpaid amount is a strong claim.

JBCC, GCC 2015, FIDIC

A sum stipulated for breach, which a court may reduce if it is out of proportion to the prejudice suffered.

South Africa enforces penalties, unlike English law, but s 3 lets a court reduce an excessive one. Always plead disproportion; do not assume the number is fixed.

Conventional Penalties Act 15 of 1962, s 3

The point at which the works can be used for their intended purpose, even if minor items remain.

Triggers the release of part of retention, the start of the defects liability period, the end of penalties and usually the transfer of risk and insurance. The most valuable date in a construction contract.

JBCC, GCC 2015

The person appointed under the building contract to administer it, certify payment and issue instructions.

They are not neutral in the way an arbitrator is, but they must certify honestly. A principal agent who under-certifies to protect the employer is challengeable.

JBCC

An amount included for work not yet defined, to be adjusted when it is.

Not your profit and not your risk until it is instructed and priced. Contractors routinely lose money treating a provisional sum as budget.

Contractual

A percentage of each payment held back by the employer as security for defects and completion.

It is your money, held by someone else, usually for a year past completion. It is where contractor cash flow dies. A retention bond releases it: always price the alternative.

Contractual; JBCC, GCC, NEC

A contractual deadline, often days rather than years, to give notice of a claim or lose it.

Far more dangerous than prescription because it is far shorter. Most construction claims die here, unnoticed, weeks after the event.

JBCC, NEC, FIDIC and GCC all contain them

An instruction changing the scope, with a mechanism for pricing it.

Work done without a written variation is work you may never be paid for, especially with a non-variation clause in play. No instruction in writing, no work.

Contractual

The transfer of a personal right, such as a claim for payment, from one party to another.

Generally needs no consent from the debtor. Without an anti-cession clause your counterparty can sell its claim against you to a factor or litigation funder.

Common law

A meeting of the minds on the material terms: the thing that makes a contract exist at all.

If the parties were agreeing about different scopes, there may be no contract on that term. This is the argument when a client insists a variation was always included.

Common law

Indirect loss flowing from a breach: lost profit, lost business, wasted overheads.

The single most valuable exclusion in any building or civils contract. A R80 000 job can carry a R4 m consequential claim if a client's tenant walks. Exclude it expressly, and read the clause when a client's paper does not.

Contractual; remoteness at common law

An ambiguous term is construed against the party who drafted it.

Whoever writes the contract pays for its ambiguity. It is a reason to draft plainly rather than cleverly, and a reason to read the other side's paper for the gaps that will be read against them.

Common law

The transfer of an obligation, which always requires the creditor's consent.

Subcontracting does not discharge your obligation to the client. Only a novation does. This is the whole reason back-to-back subcontracts exist.

Common law

The governing approach to interpreting contracts and statutes: language, context and purpose considered together from the outset.

Purpose is admissible from the start, so a recitals section is not decoration. It tells a future court what the document was for.

Natal Joint Municipal Pension Fund v Endumeni Municipality

A party is prevented from denying a state of affairs it represented and the other relied on to its detriment.

Consistently accepting late payment without objection can estop you from suddenly enforcing the deadline. Reserve your rights in writing each time.

Common law

No action arises from a disgraceful cause: an illegal contract will not be enforced.

A contract procured by bid rigging or fronting is not just a penalty risk. It may be unenforceable, meaning you did the work and cannot sue for the money.

Common law

A contractual clause excusing performance on defined events outside a party's control.

Not a general legal principle in South Africa: if it is not in the contract, you are arguing supervening impossibility instead, which is far narrower. Load shedding is almost never impossibility.

Contractual; contrast common law supervening impossibility

A promise to make good another's loss, operating independently of breach.

Broader and more dangerous than a damages claim: it can bypass remoteness and the liability cap unless the cap expressly covers indemnities. Read whether your cap applies to them.

Contractual

Restarting the three-year clock, by service of process or by the debtor's express or tacit acknowledgement of liability.

An email saying "we know we owe you, cash is tight" restarts the clock. Keep those emails. They are worth more than the demand letters.

Prescription Act 68 of 1969, s 14 and s 15

An express contractual right to cancel on breach.

Without one you must prove the breach was material before you can cancel. With one, you cancel on the terms you wrote. Every template in this repo has one.

Common law

The debtor's delay in performing on time.

This is what starts interest running and what a demand puts the debtor into. Getting the demand right is the difference between claiming interest from March and from November.

Common law; Prescription Rate of Interest Act 55 of 1975 for the rate

Terms the law imports automatically into every contract of a given type, unless expressly excluded.

You inherit obligations you never wrote. Excluding them takes express words: which is exactly what a voetstoots or as-is clause is doing.

Common law

The measure of delictual damages: restore the party to the position before the wrong.

The contrast with positive interesse decides whether you plead contract or delict. Contract is usually worth more.

Common law

Replacing an existing obligation with a new one, extinguishing the old.

Renegotiating payment terms may accidentally novate the debt, killing the security and the surety that stood behind the original. Say expressly that it is a variation, not a novation.

Common law

Authority a person appears to have because the principal held them out as having it, even if they did not.

A site foreman who has always signed variations binds the company, whatever the internal limit says. Fix it by naming authorised signatories in the contract and on every quote.

Common law

Agreements freely entered into must be honoured: the starting point of South African contract law.

The court's default is to enforce what you signed, not to rescue you from a bad deal. This is why the drafting matters more here than in jurisdictions with broad fairness overrides. Read what is in front of you.

Common law; reaffirmed as the starting point in Beadica 231 CC v Trustees, Oregon Trust

The measure of contractual damages: put the innocent party where it would have been had the contract been performed.

This includes lost profit. It is the reason a contractor's claim for a wrongfully terminated contract is worth far more than its costs to date.

Common law

The extinction of a debt by lapse of time: ordinarily three years for a contractual debt.

A letter of demand does NOT stop the clock; only service of process or the debtor's acknowledgement does. Chasing an invoice politely for four years destroys the claim.

Prescription Act 68 of 1969, s 11 and s 12

Words or conduct showing an intention no longer to be bound.

A client who says "we are not paying that certificate, ever" has arguably repudiated, which lets you accept the repudiation and cancel. It also means cancelling wrongly makes you the repudiating party.

Common law

Two parties owing each other liquidated debts cancel them out automatically.

A client can set off a damages claim against your certified payment. Contracts often exclude set-off: check whether yours does, in both directions.

Common law

A non-variation clause requiring writing is itself enforceable, so an oral variation of a written contract is void.

Every WhatsApp scope change and verbal site instruction is at risk of being unenforceable. Decide deliberately whether you want this clause; it protects you and it binds you.

SA Sentrale Ko-op Graanmaatskappy v Shifren

A court order compelling a party to actually do what it promised.

In South Africa this is the primary remedy, not a fallback as in English law. Under-used commercially: you can ask a court to make them perform, not just pay.

Common law

Performance becomes objectively impossible after the contract, through nobody's fault, extinguishing the obligation.

The bar is objective impossibility, not hardship, expense or inconvenience. Materials becoming expensive is not impossibility. This is why you need a price escalation clause.

Common law

A term the parties actually agreed without saying so, imported only where the contract cannot work without it.

The test is the officious bystander, not fairness. A client will argue a tacit warranty of workmanship into an agreement that is silent. The defence is an express clause that says what is and is not warranted.

Common law

"As is": the seller is not liable for defects, patent or latent.

Does not protect a seller who knew of the defect and deliberately concealed it. And it is heavily restricted where the Consumer Protection Act applies.

Common law; restricted by Consumer Protection Act 68 of 2008

A statutory process placing a financially distressed company under temporary supervision with a moratorium on claims.

A moratorium stops you enforcing against a debtor in rescue. If a client enters business rescue, your certified but unpaid claim is frozen and you become a creditor in a plan.

Companies Act 71 of 2008, Chapter 6

The mechanism for breaking a stalemate between equal shareholders, such as a shootout or buy-sell clause.

A 50/50 company with no deadlock clause is a company that ends in liquidation when the founders fall out. Put it in on day one, while everyone is friendly.

Shareholders agreement

The duty to act in good faith, for a proper purpose, and in the best interests of the company.

Owed to the company, not the shareholder. In a family or group business this is the trap: what is good for the group may breach a duty owed to one entity.

Companies Act 71 of 2008, s 76

The Memorandum of Incorporation: the company's constitutional document, binding on the company, its shareholders and directors.

Where the MOI and a shareholders agreement conflict, the MOI wins and the conflicting provision is void. Draft them together or the agreement is decoration.

Companies Act 71 of 2008, s 15

Disregarding the separate legal personality of a company to hold a person behind it liable.

Rare and exceptional, but the statutory route is broader than the common law one. Group structuring only works if the separation is real, not just papered.

Companies Act 71 of 2008, s 20(9)

An existing shareholder's right of first refusal before shares are sold to an outsider.

The main defence against an unwanted co-owner. Absent from the MOI in a private company by default in some cases: check, do not assume.

Companies Act 71 of 2008; shareholders agreement

Carrying on business recklessly, with gross negligence, with intent to defraud, or for a fraudulent purpose.

Directors can be held personally liable for the company's debts. Trading on while insolvent and hoping is the classic route into it.

Companies Act 71 of 2008, s 22 and s 77

The duty to disclose a personal financial interest in a matter and to leave the meeting.

Common directors across two companies means every intercompany contract triggers this. Disclose and recuse on the record, or the contract is challengeable.

Companies Act 71 of 2008, s 75

The statutory test a company must pass before a distribution, a buyback, financial assistance or certain other transactions.

Paying a dividend or a loan to a shareholder without the board applying and recording this test exposes the directors personally.

Companies Act 71 of 2008, s 4 and s 46

Tag-along lets a minority join a majority's sale on the same terms; drag-along lets a majority force a minority to sell.

Together they are what makes a minority stake sellable and a company buyable. Without drag-along, one small holdout can block an exit.

Shareholders agreement

The restriction on unsolicited electronic marketing to a person who is not an existing customer.

Cold outreach by email or SMS to individuals is regulated. Business-to-business contact at a company address is treated differently: know which one your list is.

Protection of Personal Information Act 4 of 2013, s 69

The person accountable for POPIA and PAIA compliance in an organisation: by default the head of the business.

It defaults to the CEO whether or not anyone was appointed, and registration with the Information Regulator is required. Most small businesses have this duty and do not know it.

Protection of Personal Information Act 4 of 2013; PAIA 2 of 2000

The written contract required when one party processes personal information on another's behalf.

A contractor or a platform that holds personal data on anyone's behalf must have one with the party it holds it for; its absence is itself a contravention.

Protection of Personal Information Act 4 of 2013, s 20 and s 21

The set of facts that entitles a party to relief.

Prescription runs from when the cause of action arose and you knew the debtor's identity: not from when you decided to sue.

Common law; Prescription Act 68 of 1969, s 12

The legal standing to bring a claim.

The entity that signed is the entity that sues. If one company did the work and another invoiced it, someone has a standing problem. Group structure has to match the paper, or the paper has to say who is acting for whom.

Common law

Losing the right to challenge a decision by acting in a way that accepts it.

Signing the contract and starting work while disputing the tender award can peremp the review. Reserve rights explicitly before you perform.

Common law

The written appointment delegating the CEO's health and safety duties to a named person.

It does not remove the duty from the top; it adds an accountable person. An appointment made without giving that person authority and budget is worthless and will be seen through.

Occupational Health and Safety Act 85 of 1993, s 16(2)

The compiled record of appointments, risk assessments, method statements, competencies and incidents for a site.

The first document an inspector asks for and the first a client's insurer asks for after an incident. No file, no site access on most professional projects.

Construction Regulations 2014

Confirmation from the Compensation Fund that an employer's COIDA assessments are paid up.

Required for site access on almost every commercial project, and it expires. An expired letter stops your crew at the gate on the morning it matters.

Compensation for Occupational Injuries and Diseases Act 130 of 1993

An injured employee generally cannot sue the employer in delict; the Compensation Fund is the remedy.

Genuine protection for an employer, and it is why COIDA registration matters beyond compliance. It does not protect you from prosecution under the OHS Act.

Compensation for Occupational Injuries and Diseases Act 130 of 1993, s 35

The written agreement under which a client and a contractor allocate health and safety duties.

Without it, the client can be liable for your safety failures and vice versa. It is a one-page document that decides who goes to court after an incident.

Occupational Health and Safety Act 85 of 1993, s 37(2)

A body established by employers and unions in a sector, whose collective agreements can be extended by the Minister to bind non-parties.

If your work falls in the registered scope, the wage schedule and conditions bind you whether or not you are a member. Non-compliance means arrears and penalties.

Labour Relations Act 66 of 1995, Chapter 3

Where an employee resigns because the employer made continued employment intolerable.

The resignation is treated as a dismissal by you. A manager who makes someone's life impossible instead of following a disciplinary process creates this exposure.

Labour Relations Act 66 of 1995, s 186(1)(e)

Whether a fair process was followed before dismissing.

The half most employers lose on. Notice of the allegation, time to prepare, a hearing, representation, and a decision by someone who was not the complainant.

Labour Relations Act 66 of 1995, s 188 and Schedule 8

A contractual limit on a person's freedom to compete or solicit after leaving.

Enforceable in South Africa if reasonable, and the onus is on the person resisting it to show it is unreasonable: the opposite of many jurisdictions. Duration, area and scope must be defensible.

Common law; Magna Alloys v Ellis

The consultation process required before retrenching for operational requirements.

A genuine joint consensus-seeking process, not an announcement. Getting the process wrong turns a lawful retrenchment into an unfair dismissal with compensation.

Labour Relations Act 66 of 1995, s 189 and s 189A

The provision under which a temporary employment service worker earning under the threshold becomes deemed the client's employee after three months.

Using labour brokers for continuous work transfers the employment relationship to you. Budget for it or structure the work genuinely temporarily.

Labour Relations Act 66 of 1995, s 198A

A statutory presumption that a person is an employee where certain factors are present, regardless of what the contract calls them.

Labelling someone an independent contractor does not make them one. If they work your hours under your control with your tools, you have an employee and a CCMA problem.

Labour Relations Act 66 of 1995, s 200A; BCEA 75 of 1997, s 83A

Whether there was a good reason for a dismissal.

Half the test. You can have an overwhelming reason and still lose at the CCMA on procedure alone.

Labour Relations Act 66 of 1995, s 188

The class of work and the financial level at which a contractor is registered to tender for public work.

Bidding above your grade is automatic disqualification, and repeated it is grounds for deregistration. The value ranges are set by Board Notice and have changed: never quote them from memory.

CIDB Act 38 of 2000; Construction Industry Development Regulations 2004

The Central Supplier Database: the single national register of suppliers to the state.

No CSD registration, no award. It pulls tax and banking status automatically, so a lapsed tax compliance status silently disqualifies you without anyone telling you.

National Treasury; PFMA and MFMA SCM framework

A quality or capability threshold scored before price and preference.

Where it is used, you must meet the minimum score to proceed at all. It is also the most commonly challenged part of an evaluation because scoring is subjective.

Preferential Procurement Regulations

A mechanism letting contractors combine gradings to bid above what either could alone.

This is the most under-used lawful route to bigger public work for a mid-grade contractor. The calculator is published by the cidb and the JV agreement has to be right.

cidb; Construction Industry Development Regulations

A department, municipality, or an institution exercising a public power or performing a public function under legislation.

Contracting with one changes everything: procurement rules, PAJA, PFMA or MFMA, and the possibility that a defective process makes your contract invalid even though you did nothing wrong.

Constitution, s 239

The route to have an administrative decision, including a tender award, reviewed and set aside by a court.

There are strict time limits and an obligation to exhaust internal remedies first. A losing bidder who waits loses the right to complain.

Promotion of Administrative Justice Act 3 of 2000

Points awarded for specific goals alongside price in evaluating a state tender.

The split and the thresholds are in the regulations and they are changing with the Public Procurement Act. Never state the current split from memory.

PPPFA 5 of 2000; Preferential Procurement Regulations 2022

Whether a bid complies with all the mandatory requirements of the tender.

A non-responsive bid is disqualified before price is even considered. Most tenders are lost here, on paperwork, not on price.

Tender conditions; SBD forms

The standard bidding document declaring bidders' interests, relationships and independence of the bid.

A false declaration is fraud, and it is also the document that catches collusion between related bidders. Treat it as a sworn statement, because functionally it is.

National Treasury standard bidding documents

The constitutional standard for state procurement: fair, equitable, transparent, competitive and cost-effective.

The ground on which a tender award is reviewed and set aside. It survives every change of statute, so it is the argument that never goes out of date.

Constitution of the Republic of South Africa, 1996, s 217

SARS's confirmation, via a PIN, that a taxpayer's affairs are in order.

Verified live at award, not at submission. Being compliant when you bid is worthless if you slip before the award lands.

Tax Administration Act 28 of 2011