"Having lunch in a restaurant in Cape Town last week, I overheard bits and pieces of a conversation between two friends. My interest was tweaked when it was clear that the one friend bemoaned her difficulty in reaching agreement with her new landlord. Her words were something to this effect: "So when I received the lease agreement from the landlord, I made those changes to it, signed it and sent it back to him. Then he said to me I cannot make any changes and must reprint the lease he sent me, as is, without making any changes. I must just sign it and send it to him." The friend answered, "I hope you did not do that!"
What is the position when one party wants to make changes to a draft agreement before signing it? In theory, it is an easy answer: Each party can make such changes as he or she would like to be included in the eventual agreement, and it is only when there is "a meeting of the minds" and agreement on all the provisions inserted by both parties, that a contract is constituted. In other words, a valid and binding agreement in law is constituted when there is agreement on all aspects of the contract between the parties.
In the conversation between the two friends referred to above, the correct answer was therefore that it was definitely open to the tenant to make changes to the draft agreement and then signing it and sending it to the landlord. That would constitute an offer to enter into an agreement. If the landlord accepted the changes, indicated by his or her signature to the document, then a binding agreement is constituted. If the landlord reverted and indicated he did not accept the changes, then there was no agreement. Another scenario is where the landlord accepted the changes but added further provisions to the draft agreement. This would constitute a counter-offer and meant that no agreement was in place yet, unless and until the tenant accepted these further changes affected by the landlord.
Be mindful of the law when negotiating the terms of an agreement – whether it is the lease of immovable property, purchase of a home or investment property, as the devil is often in the detail of the agreement. It is necessary to have clarity on what each party's responsibilities and liabilities are, and for this it is prudent to have your attorney assist you.
Contact Martin Sheard at STBB Claremont on martins@stbb.co.za for assistance.
STBB Claremont
