Most disputes in businesses are everyday problems, such as late deliveries, quality issues, missed payments, or work that doesn’t match what was promised. However, so much of day-to-day trading relies on contracts (from supply and service agreements to rental, software, and maintenance contracts). It is important to educate yourselves on the basic terms of a contract, such as, when you may cancel, when you must give notice, and what your rights and responsibilities are.
Your contract is your rulebook
Almost every written agreement has a section that explains when it can be terminated and what process need to be followed. Typical terms would include:
- A clause that defines breach (for example, not paying on time or failing to perform as agreed);
- A requirement to send a written notice that describes the breach and gives a period to rectify the breach (often 7–14 days);
- The consequences if the breach is not remedied (for example, cancellation, claim for damages or specific performance).
If your agreement sets out these steps, you generally need to follow them exactly before you cancel. By not following the correct process, like failing to send a written notice, can turn a strong case into a weak one.
How to deal with a breach, from first notice to next steps
1) Start with a clear notice of breach. A short, factual notice works best. Name the contract and its date, say what should have happened, what happened, and when. Refer to the time allowed in the contract to rectify the breach (the “remedy period”) and indicate what you intend to do if it isn’t remedied – for example, that you may cancel and claim any proven losses(damages). Send the notice using the address or e-mail listed in the agreement’s “Notices” clause and keep proof that it was delivered.
2) Wait out the remedy period, then decide. If the breach is rectified within time, you might confirm that in writing and move on. If not, the agreement will often allow cancellation. Depending on the wording and the facts, other legal remedies are available:
- Claim for damages for financial loss, if you can prove that it stems from the breach.
- Specific performance (getting what was promised) – useful where replacement is hard (e.g., a critical part or a unique service).
- Repudiation in clearer cases where the other party’s conduct shows they don’t intend to perform at all; this can justify ending the contract earlier, but it’s fact-sensitive and worth treating carefully as you will need to be placed in the same position before you entered into the agreement.
3) Does the contract make provision for alternative dispute resolution? Check how disputes must be handled. Many contracts prescribes that the parties should engage in mediation or refer disputes to arbitration before approaching the court. If your agreement has an arbitration clause, you’ll generally need to follow it unless both sides agree otherwise. Arbitration is private and often quicker, but preparation still matters: Documents, timelines, costings and witness notes carry the day.
4) Keep your house in order while you act. A tidy record makes decisions easier and positions stronger:
- Keep purchase orders, job cards, delivery notes, service reports, photos and relevant messages together (digital or hard copy).
- Use the contract’s prescribed channel for any formal steps i.e email, even if day-to-day chat happens on WhatsApp or phone.
- Check your own performance (or any right to suspend) before cancelling for non-payment or delay.
- Be careful with extensions. If you allow more time, record it as “without prejudice and without waiving rights under the contract”.
- Familiarize yourself with the prescribed renewal and termination dates; many agreements have an auto-renew clause should notice not be given. Usually notice should be given 30-90 days before expiry of the contract.
5) Aim for a calm, documented finish. Whether you repair the relationship, end it cleanly, or pursue a remedy, a short, written record of the outcome (and any hand-back, data deletion or final account requirements) helps avoid loose ends and future disputes.
Common traps we see
Mixing up “termination” and “cancellation”. In practice both end the agreement, but some contracts use “termination” for an orderly end at expiry and “cancellation” for breach. Use the word the contract uses for the situation at hand.
Cancelling too soon. If the contract requires a remedy notice, send it first and wait the full period (unless a serious repudiation is clear and you’ve taken advice). Premature cancellation can be treated as your breach.
Vague complaints. “Poor service” won’t carry far. Anchor your notice in specifics – dates, deliverables, clauses – and attach or reference the supporting documents.
Forgetting post-cancellation obligations. Many agreements require return of equipment, deletion of confidential information, final account reconciliation, and non-disparagement. Ending the contract doesn’t end those promises.
What if there’s no written contract?
You still have a contract, just an oral one or a patchwork of e-mails and job cards. South African law recognises those. The challenge is proof: What was agreed, when, at what price, and on which terms. In this case, send a clear letter that sets out your understanding of the deal, what went wrong, the reasonable time you’re allowing to rectify it, and what you’ll do if it’s not rectified. Keep your tone factual and your documents organised.
When walking away isn’t the best move
Cancellation isn’t always the smartest option. If the service or supply is hard to replace, or if suspension of services will cause damage to your customers, consider specific performance (compelling performance) or a short, written settlement that resets deadlines, clarifies who does what, and captures agreed credits. A quick, well-drafted addendum can stabilise a relationship faster and at far less cost than starting again with a new provider.
A simple, workable sequence
When a dispute flares, think in this order:
- Check the contract
- Gather your proof
- Send a proper notice (ask your legal provider if necessary)
- Allow the remedy period
- Decide on cancellation, performance or settlement
- Follow the dispute resolution clause, if needed.
That calm, methodical approach keeps you inside the four corners of the contract and reduces surprises.
Contracts don’t need to be legalistic to work; they need to be clear, followed, and documented. If you know where the termination clause lives, how to send a notice of breach, and what your post-cancellation duties are, you’re already most of the way to a sensible outcome – whether that’s fixing the relationship, ending it cleanly, or recovering your losses.
By Bradley Wright | Associate Attorney
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