In an era where commercial disputes are increasingly resolved through negotiated settlements rather than lengthy litigation, the precision of contractual drafting has become more important than ever. Businesses are under growing pressure to ensure that their agreements are enforceable, practical, and free from ambiguity. Recent South African case law continues to shape this landscape, and the Supreme Court of Appeal’s decision in Van Rooyen NNO and Another v Mokwena NO and Others (September 2025) stands out as a defining reminder of the legal weight carried by settlement clauses.
The judgment has drawn sharp attention to the way settlement clauses are drafted and enforced in commercial agreements. It serves as a reminder that precision in contractual language is not merely desirable, it is essential.
The Court clarified that when parties include a settlement clause in their business agreements, that clause carries binding legal weight. A breach of its terms can have significant consequences, including the automatic revival of previously suspended legal proceedings. This means that a party’s failure to comply with the terms of a settlement could reopen litigation that was thought to be resolved.
At its core, the case demonstrates that a settlement is not a procedural formality or an afterthought. It is a contractual commitment with enforceable obligations. For businesses, this highlights the importance of ensuring that every settlement agreement is drafted with clarity, spelling out how enforcement will occur, what constitutes default, and what remedies apply in cases of non-performance.
From a practical standpoint, the judgment serves as a cautionary note to both commercial lawyers and corporate parties. Vague or poorly structured settlement clauses can lead to unintended legal exposure and costly disputes.
The decision also emphasises a broader trend in South African commercial law: courts are increasingly holding parties to the precise terms of their agreements. This reinforces the principle that effective contract management and careful drafting remain the foundation of risk mitigation in any business relationship.
In the evolving landscape of South African contract law, one principle remains constant: precision in drafting is the first line of defence against litigation.
How Mayet & Associates Can Help
At Mayet & Associates Attorneys, we assist clients in drafting, reviewing, and enforcing commercial settlement agreements with accuracy and foresight. Our firm ensures that every clause reflects our client’s commercial intent, aligns with the latest judicial developments, and protects against future disputes. We combine legal expertise with strategic insight to deliver clarity, compliance, and confidence in every transaction.
