Contingency Agreement Template for South Africa

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Key Requirements PROMPT example:

Contingency Agreement

"I need a Contingency Agreement for my law firm to handle a class action lawsuit, with a 20% success fee structure and specific provisions for handling multiple claimants, to be effective from March 1, 2025."

Document background
The Contingency Agreement is a crucial document in South African professional service relationships where payment is contingent upon achieving specific outcomes. It is commonly used in legal services, claims recovery, and consulting arrangements where service providers agree to accept payment only upon successful resolution of the matter. The agreement must strictly comply with South African legislation, particularly the Contingency Fees Act 66 of 1997, which sets specific requirements and limitations for such arrangements. This document is essential when parties wish to align interests by linking compensation to results, while ensuring fair treatment and transparency in professional engagements. It includes detailed provisions for fee calculations, success criteria, risk allocation, and payment terms, providing a clear framework for the contingent relationship.
Suggested Sections

1. Parties: Identification and details of the service provider and the client

2. Background: Context of the agreement and brief description of the matter requiring services

3. Definitions: Definitions of key terms used throughout the agreement

4. Scope of Services: Detailed description of services to be provided and expected outcomes

5. Fee Structure: Clear explanation of the contingency fee calculation, including percentages and caps as per the Contingency Fees Act

6. Payment Terms: Conditions for payment, timing, and method of payment upon successful outcome

7. Success Criteria: Clear definition of what constitutes a successful outcome triggering the contingency payment

8. Client Obligations: Client's responsibilities and obligations to facilitate the service provision

9. Service Provider Obligations: Service provider's duties, responsibilities, and standard of service

10. Risk and Costs: Allocation of risks and responsibility for costs during the engagement

11. Duration: Term of the agreement and conditions for termination

12. Confidentiality: Obligations regarding confidential information handling

13. General Provisions: Standard legal provisions including governing law, notices, and entire agreement

Optional Sections

1. Third Party Funding: Required when external funding is involved in financing the matter

2. Multiple Party Provisions: Needed when multiple clients or service providers are involved

3. Insurance Requirements: Specific insurance obligations when required by the nature of services

4. Intellectual Property: Required when the services might involve creation or use of intellectual property

5. Alternative Dispute Resolution: Optional provisions for mediation or arbitration instead of litigation

6. Assignment and Subcontracting: Required when there's a possibility of transferring rights or involving subcontractors

7. Force Majeure: Optional protection against unforeseen circumstances preventing performance

Suggested Schedules

1. Schedule A - Fee Calculation: Detailed breakdown of fee calculations and examples

2. Schedule B - Scope of Work: Detailed description of services, deliverables, and timelines

3. Schedule C - Client Information: Detailed client information and matter specifics

4. Schedule D - Success Criteria Details: Specific metrics and conditions defining successful outcome

5. Appendix 1 - Power of Attorney: If required for the service provider to act on client's behalf

6. Appendix 2 - Risk Disclosure: Mandatory disclosures as required by the Contingency Fees Act

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Legal Services

Insurance

Financial Services

Professional Services

Debt Collection

Business Consulting

Healthcare Claims

Construction

Real Estate

Mining and Resources

Relevant Teams

Legal

Compliance

Risk Management

Finance

Operations

Business Development

Client Relations

Professional Services

Contract Administration

Project Management

Relevant Roles

Legal Director

Managing Partner

Claims Manager

Compliance Officer

Contract Manager

Business Development Manager

Legal Counsel

Risk Manager

Financial Controller

Operations Director

Professional Services Manager

Client Relations Manager

Recovery Specialist

Business Consultant

Project Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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