Quick answer
Ask questions that make every fee traceable to a defined service, unit, milestone or accepted deliverable. Confirm what is included and excluded, who supplies each dependency, how acceptance works, who may approve changes, when invoices may be issued, whether VAT and expenses are included, how prices increase, what happens to disputed amounts, and which interest, suspension, penalty or exit charges can follow non-payment or termination.
How to use this guide
Do not review the scope and pricing schedules separately. An apparently fixed fee can expand through vague deliverables, customer dependencies, minimum commitments, automatic changes or open-ended expenses. Conversely, a detailed scope without a workable change process can force both parties into informal instructions whose price and authority are contested later.
Questions that define the service boundary
Ask: What exact output is being bought? Which activities produce it? What assumptions limit the work? Which items are explicitly out of scope? Who owns each customer dependency, and what happens when it is late or defective? Replace “as required,” “reasonable support” and “industry standard” with measurable content where the commercial outcome depends on them.
For each deliverable, identify format, quantity, location, due date, service hours, response or resolution measure and named approver. If outputs depend on third-party software, data, access or decisions, state the dependency and allocation of resulting delay. Ask whether subcontractors may perform and whether the original provider remains accountable.
Questions about acceptance and service measurement
What starts the acceptance period? Which objective criteria apply? How are defects described and retested? Does silence, use or payment create deemed acceptance? Is there a reasonable opportunity to test the correct version with the required information? For continuous services, what monthly reporting proves the service level and what exclusions apply to the denominator?
South African contract interpretation examines the text in its context and purpose. Ambiguous scope labels cannot safely be repaired later by pointing to one isolated line in a proposal. Ask which document prevails among the agreement, statement of work, service level, proposal, purchase order and online policy.
Questions about change control
Who may request a change and who has authority to approve it for each party? Must the provider first state the scope, fee, schedule, dependency and risk impact? When does an approved change bind the parties? Does emergency work have a narrow retrospective process, or can any informal instruction be invoiced as extra work?
Ask how the change clause interacts with a written non-variation clause. Brisley v Drotsky remains important authority for treating agreed written formalities seriously, while ECTA gives electronic records, agreements and signatures legal recognition subject to the relevant requirements. A good clause should identify the authorised channel and approval evidence instead of assuming either that email can never change the deal or that every chat message does.
Questions that expose the full price
Is the price fixed, time-based, unit-based, milestone-based, usage-based or a combination? What is the unit definition and measurement source? Are setup, migration, training, support, travel, third-party licences, cloud consumption, data export and transition included? Which expenses need prior written approval, and is there a cap?
Ask whether every figure includes or excludes VAT and what happens if the tax treatment changes. Confirm the invoice currency, exchange-rate source and conversion date for foreign-currency components. Model a normal month, a peak month, a delayed customer dependency, an urgent change and early exit before accepting the pricing architecture.
Questions about increases and renewal pricing
When may the provider increase charges? Is the increase linked to a stated index, fixed percentage, cost category, notice period or renewal negotiation? Can the customer terminate before a unilateral increase takes effect? Does a discount disappear if volumes fall or the contract ends early?
Avoid a clause that combines automatic renewal with a short objection window and an unspecified “then-current rate.” Consumer Protection Act fixed-term and fair-term controls may be relevant where that Act applies, but coverage depends on the transaction and consumer; section 14's fixed-term rules exclude transactions between juristic persons. There is no safe universal cancellation rule for every B2B service agreement.
Questions about invoices and disputes
What event permits invoicing: effort, delivery, acceptance, calendar date or usage report? What supporting detail must accompany an invoice? How long does the customer have to raise a dispute, and does failing to object waive every later defence? Must undisputed amounts be paid while the balance is reviewed?
Ask who decides a measurement disagreement and whether service can be suspended during a genuine invoice dispute. A suspension right should identify notice, affected services and safety or data consequences. The provider should not be able to disable access to customer data or unrelated paid services without a clearly negotiated basis.
Questions about interest, penalties and recovery costs
What interest rate applies, from which date, on which amount, and is it simple or compounded? If the contract is silent or invalid on rate, the Prescribed Rate of Interest Act may provide a statutory framework, but the current prescribed rate must be checked when relevant; do not hard-code it into a general template.
Are late fees, service credits, cancellation charges, forfeited deposits or minimum-balance accelerations intended as penalties or agreed performance adjustments? The Conventional Penalties Act provides for penalty stipulations and judicial reduction where a penalty is out of proportion to prejudice. It does not guarantee that every named charge will be recovered, and the same act or omission cannot simply generate every possible contractual remedy without analysis.
Ask what “legal costs” means and whether the clause refers to a scale or actual attorney-and-client costs. Recovery is not guaranteed merely because a contract claims all collection expenses. Court, arbitration and costs outcomes remain forum- and discretion-sensitive.
Questions about credit and consumer-law triggers
Does the price change because payment is deferred? Is a fee, charge or interest imposed for the deferral? Could the arrangement be a credit facility, credit transaction or incidental credit agreement under the National Credit Act, and do the party or threshold rules affect coverage? Ask for classification before relying on a standard enforcement clause.
If the customer says the CPA applies, identify whether it is a natural person or juristic person, its relevant asset value or annual turnover at the transaction time, and any exclusion. The published juristic-person threshold is R2 million, but that fact alone does not decide every CPA question.
Questions about termination economics
What amounts are due on expiry, termination for convenience, provider breach, customer breach and insolvency? Are prepaid fees refunded, earned or forfeited? Who pays for data export, migration, licences and transition assistance? Does a minimum commitment accelerate, and is the amount reduced by costs the provider avoids?
Put the answers into a scope-and-fee table with the clause, commercial assumption, calculation example, approver and unresolved issue. The table should make it possible for finance, operations and legal reviewers to reproduce the price and identify which change or event triggered it.
Important limitation
This is general South African information about contract scope and pricing questions. It does not calculate a lawful charge, classify a credit arrangement or determine a remedy.
FAQs
What is the most important scope question in a service agreement?
Ask what objective output is included, which assumptions and exclusions limit it, who supplies each dependency and how completion is accepted. That creates a boundary for both performance and price.
Should a change requested by email always create an extra fee?
No. The agreement should identify authorised requesters, required impact information and the approval evidence that binds each party. ECTA recognises electronic records, but the agreed change formalities still matter.
Can a service provider charge any late-payment rate written in the contract?
Do not assume so. The agreed clause, applicable legislation, transaction classification and current statutory framework must be checked. A general article should not hard-code a prescribed rate or guarantee recovery.
When can a deferred service invoice raise National Credit Act issues?
Classification may matter where payment is deferred and a fee, charge or interest is imposed, including possible incidental-credit treatment. The agreement, parties and statutory scope must be assessed.
Related Lexuno paths
Related articles
Source notes
- University of Johannesburg v Auckland Park Theological Seminary [2021] ZACC 13
- Brisley v Drotsky [2002] ZASCA 35
- Electronic Communications and Transactions Act 25 of 2002
- Prescribed Rate of Interest Act 55 of 1975
- Conventional Penalties Act 15 of 1962
- National Credit Act 34 of 2005
- Consumer Protection Act juristic-person threshold notice
Legal note
This article is general legal information for South African readers. It is not legal advice. Speak to a qualified legal professional about your specific facts before taking action.