Contracts serve to record an agreement on principle and codifies what parties have promised to do. It also implies consent to the agreement and provides recourse if the parties do not keep their side of the deal. In other words, a contract describes the deal between two parties as well as what repercussions there will be in case the deal is not respected by any of the two parties.

Much as it is common in Ethiopia to regard a contract as an intention to be renegotiated the moment circumstances change, the actual legal implications are in fact binding. This contradiction is observed more often in countries where constitutions are derived from foreign models and it is no wonder that the implementation of rules and regulations is subject to different interpretations. In other words, if a dispute over a contract is taken to court, the contents of the contract will be taken more literally than the signing party had perhaps intended.

It is therefore wise to take contracts more seriously than is often done and to make sure that your interests are included in it. More often than not a contract is drawn up by the party, who has more experience in dealing with third parties and contracts are usually derived from models used earlier. The language used is often complicated and intimidating, and there is a chance that the weaker party will sign without fully understanding what the implications are or making sure that his/her interests are well described.

Examples are found in employment contracts, housing contracts and sales. And while the employee, tenant and client are eager to sign and get the deal they so long looked for, they may end up in a weaker position than was necessary, more especially if they did not bother to read the so-called small print. What to do? Here follow some suggestions.

In the first place it is important to sit down and try and define what you want out of the deal you are about to make. Easy as it sounds, it is surprising how difficult it often is to describe exactly what you want. It is helpful to ask yourself some questions like:

• What are you actually looking for? What product or service will improve the quality of your life or your business? When you are looking to rent a house or office space for example, what are the minimum requirements in terms of space, location, facilities, quality and maintenance? Once you know what you are looking for, your search will be focused, and it becomes easy to say “no” to what doesn’t meet your minimum requirements.
• What can you afford? While prices follow market trends, this is not to say that you need to follow suit. There is a limit to everybody’s budget, and it is important to set that limit. Defining the range that you are willing and able to pay for the services or product you are looking for provides you with a framework within which to negotiate. Again, it becomes easy to say “no” once the costs are beyond the limits that you set for yourself.
• For how long do you require the services or product you are looking for? It is important to set a timeframe and include a minimum period for example when renting premises. One-year contracts are common but are not in your interest. Try and negotiate for longer periods as this will allow for less stress and uncertainty.
• What are the advantages and the disadvantages of the deal that is being offered? It is interesting to note that while somebody eagerly wants something, the disadvantages are easily brushed aside. Often, the client ends up with less value for money than was necessary.

Secondly, get a second opinion. Ask around and be informed. Find people in your social circles whom you can trust and who are able to advise you. And if you can afford it, personally or in your business, hire the services of a lawyer or consultant, and get expert advice on matters you are not an expert in yourself.

Thirdly, include conditions in the contract that will protect your interests. Write them down, put them on the table and have them included in the contract. Don’t accept the excuse that the standard contract normally doesn’t include your issues. You should not sign until you are confident that your interests are represented.

As mentioned earlier, contracts are often drawn up in complicated language. Ask yourself whether you understand the rest of the contract. If not, ask for an explanation, negotiate if necessary and have the issue written down in a way that is understood by both parties.

Finally, know what the consequences are for not sticking to the deal. Exceptions and consequences are the issues that are often found in the small print at the bottom of the main text or as footnotes, discouraging you to go into the details. You need to understand for yourself and accept what the exceptions are and what the  consequences will be in case you or the other party want out. Don’t take this lightly. If the consequences are too light, the chance for the contract to be broken is higher, putting you at more risk than necessary, which is what you want to avoid in the first place.          

Remember, a contract is an agreement between two parties, and you are responsible yourself for making sure that your own interests are protected. Don’t expect the other party to do that for you.

Ton Haverkort