No contract?No leg to stand on

Farmer AJ Badenhorst found out at great expense that he should’ve taken care of contractual details to get his municipality payout.

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ALL of us need reminding that although a verbal contract can be legal and enforceable, it’s always risky. It’s far better to make sure everything is in writing and signed by everyone concerned before you start any work. It’s a lesson Harrismith farmer AJ Badenhorst recently learned at great personal cost. His story emerges from a judgment of the Free State High Court delivered a couple of months ago.
Badenhorst told the court he had reached two agreements with a representative of the Maluti-A-Phofung Municipality, Jan Hammer. The first was he would work as a farm manager and mentor of small dairy farmers in a scheme meant to empower emerging dairy farmers in the district. The second was he would be reimbursed by the municipality for what he spent running the project.

He said the verbal agreements were reached in October 2001, in terms of which he would run the project on the farm Marydale near Harrismith for five years. During that time, he would get a number of monthly payments – a salary of R10 000, R300 towards his landline phone and R300 towards his cellphone costs, as well as R1 500 for medical aid and pension.

Badenhorst worked under these conditions, but was paid only for two months. Eventually, at the end of August 2002, he stopped the work and tried to take legal action against the municipality for the R108 900 he said he was owed.
The second agreement also involved a large sum: Badenhorst said he was owed R112 946,79 for costs he had incurred in connection with the project. He said in addition to those costs, for which he had invoices, he should also have been paid R2/km for travelling as well as his diesel costs. He continued to run up bills and paid them himself from October 2001 until August 2002 when he decided to take the municipality to court.

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The municipality, however, told a different version. Its officials said Hammer had never been authorised to conclude a binding agreement with Badenhorst. He was only supposed to have preliminary discussions with him, as well as with others, and the municipality was then to negotiate further and ultimately finalise an agreement. This, however, they had never done. In other words, no proper contract was ever concluded between themselves and Badenhorst to work on the municipality’s dairy farm.
During the hearing, Hammer admitted he hadn’t had authority to reach a binding contract with anyone on behalf of the municipality and both Hammer and Badenhorst conceded they knew the system under which the municipality operated and how it made binding decisions.

The judge held because Hammer hadn’t had the power to enter an agreement on behalf of the municipality, no binding contract existed. Not only would Badenhorst not be able to claim the money he said he was owed – more than R200 000 – but he would also have to pay the costs of the whole court case. There’s a very important lesson in this story for every reader.Reference: Badenhorst vs Maluti-A-Phofung Municipality (3484/2003) ZAFSHC 22.     |fw