“It is common that SMME businesses are reluctant to seek advice from attorneys, and less so to employ attorneys to prepare important legal agreements. This pattern, fuelled undoubtedly by the rising cost of legal charges, often results in unforeseen circumstances by the time the matter reaches a litigious stage. That being said, once the matter has reached a litigious stage, it is then too late to cure the challenges which have arisen, and the court cannot then, at that late stage, return to the contractual drawing board.”

The court stated this in a judgement on 14 January 2025 handed down in the Kwa-Zulu Natal High Court, namely Umhlanga Rehabilitation Centre v Sewram (D3438/2024) [2025] ZAKZDHC 1 (14 January 2025).

The “unforeseen circumstances” which the court refers to is normally foreseeable by an attorney who regularly litigates on contractual disputes. One of the main reasons for having a contract drafted or reviewed by an attorney is because attorneys generally know which aspects of a transaction or contract could cause potential disputes. In this way, an experienced attorney could mitigate the risk of litigation.

Clauses that are not well-drafted or have ambiguous wording can lead to the clause being unenforceable or open to different interpretations. Where wording is not clear parties would prefer an interpretation that favours their position, which is often the cause of contractual disputes. In the matter above, the court refused to read into a restraint of trade clause where the clause was too scant for it to exercise such power. As a result, the restraint was not enforced. An attorney can generally safeguard against unenforceable wording.

SMMEs do sometimes use ChatGPT as a tool to draft agreements. While such agreements can contain the essential elements of an enforceable agreement, ChatGPT has not yet replaced the need for attorneys in contract drafting. Contract negotiations are context specific. Without legal advice, contracting parties may not be aware of the legal risks that arise in the context of their specific business relationship.

Part of an attorney’s role in contract negotiations is to understand the client’s business and needs, those of the other contracting party and to consider the legal risks applicable to the transaction. Law is dynamic and judgements are being handed down regularly which may be applicable to even standard clauses in contracts. A standard document or AI generated document without legal analysis may not cover the main risks in context.

An attorney should also be able to explain in advance how clauses will operate practically and advise you of potential foreseeable disputes. Not all disputes can nor should be avoided through contractual wording but to the extent that the negotiations allow, the risk of litigation should be minimised.

In addition, delivering a document to a party who you are contracting with that contains unintended wording may erode trust and even break down negotiations. Where contractual wording is one sided or does not adequately protect both parties’ rights, the other party may believe that the drafting party intends treating it unreasonably or unfairly. A document that adequately protects both parties’ concerns alleviates animosity and furthers the relationship during the negotiation process and the duration of the contract.

This article gives only a few reason why it is better to consult an attorney at the contract negotiation stage off the back of the court’s words in the above case. There may be a time when AI is advanced enough to replace attorneys for contract drafting purposes, but this is not yet the case. Most attorneys keep abreast of legal changes in their areas of practice and are therefore well-placed to advise on context specific risks.

This article does not constitute legal advice nor replace the need to seek advice. It also does not contain all the information relevant to the subject matter. Each situation is different and must be evaluated on its own merits. For advice on related matters, our contact details are below.