Essentials of sale agency agreement

Agents are intermediaries that sell goods or services on one’s behalf in return for commission. For this purpose, the Sales Agency Agreement is crafted to lay down the rights and obligations of each party.

The agreement specifies

 The agents' payment structures (commissions, percentage of profits, etc.) for selling the product(s)      
 For acting on behalf of the Principal and/or
 For performing sales functions as laid down in the agreement

Key considerations in appointing an agent in South Africa are:
• One needs to appoint an agent who knows market well.
• One needs to consider national distribution.

Duties 
Agent's duties include:
• Act on behalf of and be subject to the control of the principal
• Act within the scope of authority or power delegated by the principal
• Discharge his or her duties with appropriate care and diligence
• Avoid conflict between his or her personal interests and those of the principal, and
• Promptly hand over to the principal all monies collected on principal's behalf.

Principal's duties include:
• Compensate the agent as agreed.
• Indemnify  him against claims, liabilities and expenses incurred in discharging duties assigned by the principal.

Agency agreements can also contain additional terms
• Sale of residential property
• Sale of rural land
• Leasing of residential or rural property
• Management of residential property or rural land
• Management of strata or community title land
• Sale of business
• Buyer’s agency

Oral agreement not beneficial
Oral agreement is not beneficial for the both principal and the agent. There is no legal requirement that it must be in written form. It is made to sell the products in return of commission. Agent always acts on the behalf of the principal. An agent may be either an employee or self-employed.

What should it cover?
It is essential that it must be a clearly written document, and cover the following bare minimum elements:
• The territory that the agent is responsible for.
• The exclusivity of the territory for the agent.
• The agent's payment structure (i.e. commission on sales)
• The Principle's responsibilities toward the agreement
• The rights to premature end of the relationship
• Compensation in the event of a premature end to the relationship


Non-compete Clause
One of the most common clauses in an agency agreement is the "non-compete" clause that the Principle often puts there to prohibit the Agent from entering into similar agreements with competitors. The non-compete may be either for the duration of the contract or be tied to a specific task, project, or period.


Remuneration 
Provisions in respect of remuneration

 How the agent is to be remunerated
 Where the agency agreement does not provide for this
 The circumstances where the agent is entitled to be paid after the termination of the agreement
Requirements that the principal provide regular statements of the amount of commission due to         the agent

Termination of Agency agreement
The law in this area sets
 The necessary notice periods required before termination
 Compensation for damage to be provided to the agent on the termination of the agreement
 Compensation where the agent dies.

South African law recognizes the following grounds for setting aside a contract:
 misrepresentation;
 duress;
 undue influence; and
 commercial bribery

Sales Agency Contract contains the following provision:
1. Definitions and Interpretation
2. Appointment of Agent
3. Method of Sale
4. Intellectual Property
5. Principal’s Obligations
6. Financial Provisions
7. Confidentiality
8. Force Majeure
9. Term and Termination
10. Post-Termination Compensation
11. Exclusion of Compensation
12. Relationship of the Parties
13. Nature of the Agreement
14. Severance
15. Notices
16. Law and Jurisdiction

Reason to buy from Net Lawman
 Net Lawman provides you a comprehensive range of articles that save your time and can be amended accordingly as and when required.

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How can a pre-nuptial agreement save you money?

Importance of a prenuptial agreement
Prenuptial agreement is an important written document that is drafted and signed by a couple who is going to enter into a marital relationship. This agreement or contract is prepared to safeguard the rights of both in case of marriage failure. In such a situation, the division of property and other joint assets usually become a matter of dispute and prenuptial agreement plays its vital role by providing a pre-determined, mutually agreed, solution.

 How it saves money?
• You won’t have to hire an expensive lawyer to settle the disputes.
• You won’t make an excuse in your normal life and have to go up and down for court hearings.
• Generally, if there is no pre nup agreement, then law equally distributes assets between spouses.


Legal Significance of Prenuptial Agreement in South Africa
In South Africa, Divorce Act 70 of 1979 comes forward in settling such issues. If husband and wife do not compile and sign a contract before marriage and fail to continue their marital relationship and want divorce then the division of property and all other joint assets will be dealt under this Act of South African law.
However, if they sign a prenuptial contract before marriage they will remain on safe grounds in the event of divorce as they will resolve disputes regarding the division of property and assets according to a mutually agreed manner. They do not need to involve the court which may harm the interest of any one of them or even both of them.

In the preparation of a prenuptial agreement for South Africa, these are some important points which should be included in the written contract.
• Personal details of the couple (Names, addresses)
• Time of divorce or separation
• Procedure joint property’s division
• Total capital calculations
• Claim of marital residence
• Who will be responsible of mortgages and other utility bills
• All other joint assets
• Responsibility of debts
• Resolving disputes about division of assets
• Who will look after children
• Spousal support

For having a comprehensive prenuptial agreement template in plain English, just contact to Net Lawman who are the best in this business as they compile all sorts of contract templates and you just need to make small editing in this document to mould it to fulfill your personal requirements.

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Importance of separation agreement

Separation:
When a couple who have been living together as husband and wife decide to separate, their parting may have no legal consequences, except when they have established some form of partnership which is then to be disbanded. For a married couple with no hope of reconciliation, however there are many legal implications.

Separation occurs when a couple chooses to no longer reside as a married couple. Therefore finances, assets, and debts are divided among the two, and they can begin living separate lives Moreover, couples also talk about and agree upon custody. When couples legally separate marriage is not dissolved and therefore is not considered a divorce. Issues related to marriage, divorce and separation are regulated by state laws.

Is the agreement legally binding?
Under South Africa law, if a person married, unmarried or divorced. If he/she wishes to separate from partner before instituting divorce proceedings the separation has no legal status.


Divorce and separation –Overview
A divorce formally dissolves a legal marriage. While married couples do not possess a constitutional or legal right to divorce, states permit divorces because to do so best serves public policy.

Legal Separation-Definition
Legal separation is a legal process by which a married couple may formalize a de facto separation while remaining legally married. A legal separation is granted in the form of a court order, which can be in the form of a legally-binding consent decree. The most common reason for filing with courts for a legal separation is to make interim financial arrangements for the two of them, such as deciding which one will pay which bills, possess which property, and whether one of them shall pay the other temporary financial support.

What for
A separation agreement allows a husband and wife to agree on all of the same issues that would need to be decided upon divorce, including maintenance or alimony, division of marital property, child custody and child support.

The legal and financial effects
When a husband and wife separate by private agreement or by deed of separation, their legal rights and obligations change. However, since the marriage has not been ended, they still bound by their marriage vows and may therefore not marry anyone else. If one of them does commit adultery, the other may use this to support an application for divorce. This party will also have the right to sue the co- respondent for damages, although these are likely to be slight in view of the fact that the parties are living apart and the consortium has already come to an end.

Maintenance payments are dealt with ultimately only by the Supreme Court. If separation is by agreement court proceeding will have to be instituted if either partner wishes to change the provisions for the children without the other's consent.


Married couple
A married couple, who decide they can no longer live together but, because of their religious convictions cannot divorce, may separate informally or by some form of deed of separation.
Until the promulgation of the the Divorce act1979, a couple could obtain a decree of judicial separation in only two ways:
By informal agreement
By a deed of separation, preferably one which is drawn up by an attorney or notary


Property Arrangements
The terms of a formal deed of separation cannot be made binding on creditors of the couple, unless a creditor knows the terms in advance. Therefore, if a couple married in community of property subsequently separate, their creditors can still recover payment for debts from both parties to the same extent as if they had not entered into a deed. This holds true even if the couple have divided up their possessions and the debt concerns property that has been taken by only one of them.


What the agreement includes:
• For most spouses the agreement include these issues
• Who the children should live with and how decisions about the care and control of the children will be made (custody and guardianship)
• How the spouses will share the children's time (access)
• Whether a spouse will cover the children's financial need (child support)
• Whether a spouse is entitled to financial help meeting his or her expenses, and if so, who should provide that help and in what amount (spousal support)
• How the assets will be shared and how debts will be paid (property division)
If parties can manage to settle these issues they should consider getting a separate agreement for two reasons.

First, they are legal contracts that can be enforced by the court
Second, it's much cheaper and often quicker to resolve these issues by agreement than in court.
The care and control of children
There are many different types of parenting arrangements that can be agreed to in an agreement. Party settle the issue of with whom children will live, share responsibility of looking after children, visiting rights.

The family home
An agreement can also say whether one spouse will get to keep the family home or whether it will be sold. Even if the house is in one spouse's name, the other spouse is almost always entitled to a share in it.

Other assets
When a couple separates, each spouse has a right to a share in all the family assets. A separation deed can cover how to divide these assets.

Debts
Does the spouse who gets the use of the house have to pay the mortgage? Who pays the credit card bills? Should both spouses be responsible for all of the debts or just some of the debts? These issues can also be covered.

Family business
If parties run family business together they probably won't want to be business partners any longer. It is important to resolve all of the financial issues relating to business in the agreement.

Essential features:
• Legal definition
• Legal status
• Benefits
• Issues to settle for
• Child custody
• Finances
• Assets and property

Reason to buy from Net Lawman:
The partnership agreement from Net Lawman provides you a comprehensive range of agreements that save your time and can be amended accordingly as and when required.

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How you can discharge from an old contract to a new one in a legal way?

Alteration, amendment and discharge of contracts and agreements in business are common practice. Unfortunately, majority of business populaces ignore the legal aspects of discharge of contracts. What exactly is a legal way to discharge or substitute an existing contract into a new one? Simply through "Novation"

What is Novation? Novation is one of a rare legal concept through which one party transfers all its obligations, rights, services and debts under a contract to a third party, with the consent of his original counter-party.

When Novation takes place? Novation takes place when:
• A new contract is substituted with an existing one between the same parties or
• A contract between two parties is rescinded in consideration of a new contract being entered into on the same terms between one of the parties and a third party

When to use this novation agreement? This document can be used to transfer any service contract to another party. There are, of course, many uses for this agreement. Examples of when this document might be used include:
• On the sale/purchase of a business that depends on the continuation of certain services (e.g. website hosting)
• On the sale of an asset in the process of being produced or amended All this should be done through an attorney as it is purely a legal affair

What law says about novation agreement? The law requires four elements to create a novation agreement:
• There must be a valid and legally enforceable original contract • Agreement between all parties, old and new, to the novation agreement
• Release of the parties to the original contract from all duties
• And creation of a valid and legally enforceable new contract. If an agreement does not have these four elements, it might be a valid contract but it will not constitute a novation.

Requirements of a novation agreement:
• The novation agreement is totally a new contract; therefore it must meet all of the requirements of a contract law. The parties must mutually agree to the contract, and each party must offer some form of consideration in exchange for the other parties' promises.
• A novation contract cannot relate to illegal subject matter (for instance, assignment of a crime) and each party may raise any one of a number of contract defenses to prove that it should not have to perform its duties under the novation contract.

Requirements to discharge a contract through novation:
• An agreement by all of the parties to a new contract
• An express discharge of the old contract
• New contractors are bond to perform and follow the terms, rules, conditions and convents of the new contarct
• Performance of all of the terms by all of the parties
• Performance of all of the terms by only one of the parties
• Obligations are also discharged by novation, where, for example, a stipulation is taken from Titius for what you owe to Seius.

With the intervention of a new person, a new obligation is created; the earlier obligation is merged with the later and extinguished. Net lawman offers such comprehensive and exact legal aid in "discharge or substitute of old agreement to a new one" or in issues where you find ways to discharge a contract in a legal way. The legal documents of Net lawman encompass and are applicable for almost all type of issues which comes under novation agreement. These documents cover all possible rights of both old and new parties. For more details about novation agreement, don't forget to read the deeds of novation agreement, assignment agreement and other clauses from Net Lawman.

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Similarities and differences between a substituted contract and a novation

Substituted contract and novation

A substituted contract is when two or more parties in a joint venture find the existing contract or agreement irrelevant or ineffective and replace it with another or new agreement with the consent of all parties involved. If the original or previous agreement is in written form then the substituted contract will also be in written form as well. It can also be identified as a contract variation agreement in which the whole contract is not changed but certain amendments are made to fulfil different requirements.

On the other hand, deed of novation is basically an agreement according to which a new or third party replaces one or more original or existing partners under the old contract and releases the original party from all duties and obligations. The important thing in the novation is that the original agreement remains in effect. The deed of novation becomes quite important to sign while doing any sort of business in South Africa where the existing partner or partners want to transfer their obligation or duties to a third partner. This transfer deed is also called deed of assignment contract.

Legal aspect of Substituted and novation agreements
In South Africa, the South African Companies Act, 1973 caters all business related issues including all sorts of business partnerships. In order to avoid any dispute during the course of any partnership business, the substituted and novation contracts play a vital role as they help the partners to make change in contract or to leave a business by allowing the new party to overtake it.


Differences between Substituted and novation agreements
The similarities between substituted contract and innovations are that both involve a change in the partnership but the nature of change is different as in substituted contract it is the change of the agreement but in novation it is the change of parties or partners.

Here are also some of the major difference between a substituted agreement and novation.
• Substituted agreement requires change in the whole contract while novation agreement generally remains the same.
• Substituted contract remains among the existing partners while novation agreements are usually come into existence when a new or third party involves in an existing joint venture.
• Substituted contract involves the satisfaction of all existing parties with the new replaced agreement whereas in novation the new partner takes over the existing partner's duties and obligations without changing the agreement.
• Substituted contract sticks around all parties whereas in novation the new partner releases the existing partner or parties from their duties.

Net Lawman provides the most relevant and authentic substituted and novation contract templates which are compiled in plain English and are designed in a way to fulfill the requirements of people who just need to do small editing to mould it according to their needs.

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Importance of Employment policies and procedures

Importance of Employment policies and procedures
In order to smoothly run any department or business whether private or public, the employment policies and procedures play a vital role. These policies help both, employer and employee, to work according to the rules and regulations defined clearly in the employment agreement which is generally derived from the policies of the state. The employee policy includes everything associated with the working discipline of employees and employers that helps both of them to create and maintain a healthy and pleasant working environment.

It also enables them to resolve their disputes in a simple and peaceful way by following the rules and regulations which were determined and signed by both at the time of recruitment. It can save both of them from going to the court and facing tribunal claims that may go against one or both of them. In South Africa, the employee policies are quite clear and all departments in public or private sector are bound to abide by these rules and regulations.

Legal importance of employment policies and procedures in South Africa
In the Labour Law of South Africa, the employment policies are stated in the Employment Act, 1997 in a detailed and comprehensive manner. This act clearly mentions the employee policies including every aspect of work ethics and a working relationship between employer and his employees. All public and private departments in South Africa follow the rules and regulations defined by the Employment Act, 1997 that determines the regulations to be followed by the employer and employee during the course of running any business.

This Act includes working time, daily and weekly working hours, meal intervals, daily and weekly rest periods, pay for working on Sunday, working on night shifts, public holidays, annual leaves, sick leaves, maternity leave and protection of employee after child's birth, sexual harassment, proof of incapacity, occupational accident or disease, remuneration or salary, deductions, record relating to remuneration, employee rights, resignation or termination, experience letter and some other relevant aspects.

Defining all legal aspects at the time of signing employment agreement in South Africa are very important as it maintains a good working environment and helps the employer and employee to know their rights and duties and act accordingly.

The employment policies and procedures in South Africa generally cater these areas.
• Name and address of the employer
• Name and address of the employee
• Name and address of the business or department
• Rights and duties of employer and employee
• Working hours
• Leaves (annual, sick, maternity etc)
• Sexual harassment
• Remuneration or salary
• Deductions
• Resignation or termination

To have the knowledge of employee policies help both employer and employee to work in a pre-defined, legal and smooth way. Before signing an employment contract for working in South Africa, it is recommended to have a sound knowledge of all these aspects of employee policy.

Net Lawman are out there to facilitate people in this regard by providing them with the comprehensive document regarding the employment policies and procedures in plain English that helps both employer and employee to define everything regarding their rights and duties and to avoid possible disputes.

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What is considered as Breach of a shareholder agreement?

A shareholders’ agreement is a written consent or contract reached between company and some or all of its shareholders. It deals with all aspects ranging from relationship between the parties, personal rights and obligations of the shareholders.. The aim of shareholders’ agreements in South Africa is to regulate and record the relationship between shareholders and the Company, and the relationship amongst the shareholders themselves Together with the company’s articles of association a shareholders’ agreement creates internal “rules” upon which companies working mechanism is decided.

But Shareholder Agreement is unable to guarantee that there always exists consensus of all stake holders involved. There is always a likelihood of breaches   to be committed by shareholders (minority/majority) or the directors.

Following are some common examples of shareholder disputes, generally involving issues of control, use of assets or strategy:

• Shareholders reservations on director’s performance.
• Profit dividend sharing mechanism.
• Minority shareholders claim of “unfair prejudice” by majority shareholders.
• Ambiguities related to financial data communication to shareholders.
• Failure to inform shareholders of meetings and/or exclusion from meetings.
• Breach of any existing shareholders agreement or the articles of association.
• Hegemony of few dominant shareholders undermining the rights of other shareholders.
• Conflict of interest claims
• Departing shareholders(death of shareholder, new ventures, disqualification pertaining to shareholder agreement clauses in case of conviction or been declared defaulter)

In buildup to such breaches, minority shareholders always end up at receiving end. Only sensible formulation of a shareholder agreement leads to a pragmatic solution for them. Because always remember in order to cut down on legal costs you need to address your weaknesses in your relationship with the new partner.

When and why it happens

Problems arise because of

1. Nonexistence of shareholder agreement, either because you trust your new partner too much or you find yourself too much engulfed in setting up new business, hence compromising on key documentation formulation which helps you setup working mechanism for the company. Despite of strong relations still business relations are found fraught enough to crumble on issues pertaining to distribution of profits to hiring of kin’s.
2. No shareholder agreement means no legal documentation to prove your existence in the company. Being a minority shareholder without documentation backing gives rise to majority shareholder hegemony. Role of directors cannot be ruled out as well, and if they are shareholders as well you are asking for more trouble.
3. Transfer of shares also can be termed as a reason. In case of existence of shareholder agreement there are mechanisms to be followed. Otherwise foul practices can be anticipated against the will of other shareholders.
4. Legally the new Companies Act now maintains that any provision of a shareholders’ agreement that is inconsistent with the Act or with the company’s Memorandum of Incorporation (MOI), being the primary constitutional document of a company under the Act, is void to the extent of such inconsistency (Section 15(7) of the Act), on 1 May 2011.

How much damage that can cause to parties?

Any dispute itself is detrimental for a new company. In its inception years if a company goes through legal disputes then there is no hope for it to survive, considering high costs involved in legal procedures. But for case study sake, minority shareholder’s immediate damage can be dismemberment from the company; pertaining to nonexistence of shareholder agreement. But it depends on case to case. In case of human capital investment in the company there can be irregularities in valuation of your efforts. On monetary grounds because of legal costs and investments put into the business, company is bound for losses.

Penalties, if any for breaching a contract

That again depends on shareholder agreements that is signed between the members. In case of breach of any clause of the agreement, damages are prescribed. According to these damages every member is bound to compensate or else legal procedures will be adopted for recovery of dues. These damages can be in the form of monetary penalties or disassociation from the firm.

How comprehensive agreements can prevent such situations

The parties to the shareholders agreement may decide which aspects they wish to include in the agreement. In terms of South African law, any relationship, interest or obligation relating to the company of which the shareholders have an interest may be included in a shareholders’ agreement, provided always that such matter does not conflict with the Act or the company’s MOI. It may, for example, be preferable for information which the shareholders wish to keep out of the public domain to be dealt with in shareholders’ agreement. Normally following clauses are included in the document

• Definitions.
• Relationship of parties
• Directors.
• Proxy votes.
• Company’s obligations.
• Actions for which shareholders’ consent is required.
• New intellectual property.
• Confidentiality.
• Exit strategy.
• Transfer of shares and right of pre-emption.
• Procedure after transfer.
• Transfer of shares on death or incapacity.
• Shareholder’s continuing obligations.
• Restrictions on shareholder after transfer.
• Conflict with the articles.
• Breach of this agreement.
• Agreement is divisible.
• Notices and service.
• Dispute resolution.
• Waiver.
• Jurisdiction.

But all that needs to be formalized beforehand. Line of business needs to be clarified so as to avoid any inconvenience at your end no matter if you own the company or are just a small part of it. Key is that you must be safe legally.

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