Typically, people know what is generally expected of them when they contract. If you are buying something you have an obligation to pay for the thing / service and the other party has an obligation to deliver it. If you rent an apartment you must pay rent, typically monthly, and the Lessor must give you undisturbed use and enjoyment of the property. If you buy something on credit you will obtain possession of the thing now but have to pay the purchase price plus interest back to the Lender in instalments over an agreed period. These general obligations are not hard to identify, they are the expected consequences that arise from entering into a specific type of contract. But every contract has other, less obvious, consequences which attach to it. Some consequences the law automatically reads into specific types of contracts. For example, unless otherwise agreed, the Landlord has an obligation to maintain the lease premises, even if it is not reflected in the written lease agreement. Similarly, the Lessee has an obligation to return the property in the same state they obtained it, less reasonable wear-and-tear. So, if you rent an apartment with luminous green walls which you paint beige (for obvious reasons), unless you agree otherwise with the Landlord, when you move out the property must have its ugly green walls. Some obligations, however, are more hidden in contracts. For example, many companies would be surprised to find out that if they’ve taken out a bank loan they probably have an obligation to provide a copy of their annual financial statements to their bank each year. If they don’t do this, they might well be defaulting on their loan agreement which will trigger something called an acceleration clause. The impact of this clause is that the entire outstanding balance (which they had, for example, originally been given another 5 years to pay off) becomes due and payable immediately. This sort of simple, easy to make, mistake could crush a company and decimate their cash flow. At the same time, it is easy to avoid making a mistake like this if you knew that failure to abide by an undertaking to provide certain information is an event of default which triggers an acceleration clause. It’s easy to avoid If you know how different contractual clauses work together. This is why it is so important for business people to have a basic understanding of the law of contract. It is, after all, going to be business people, not lawyers, who are charged with implementing the contract. So, it is really important for you to understand how different contractual clauses work together in a contract and understand where you need to be looking to find all of your obligations. They are not always neatly grouped together under the heading ‘Lessee’s / Purchaser’s / Borrower’s Obligations’. And considering there are obligations which the law applies automatically to specific types of contracts, whether or not you acknowledge them, it is really a good idea for business people to have a basic understanding of the principles of contract law and contract management so that you at least know when you need to be thinking about things more carefully before simply using a precedent again or ploughing forward in managing a contract. For more information on contract law or for advice on any of your contracts email info@sdglegal.africa.