Commercial Contracts 2025 Comparisons

Contracting parties are generally free to choose the applicable law that will govern their agreement. In order for the choice of law to be implemented by the courts, it must be evidenced that it was the parties’ intention to select that law. This may be evidenced through an express term within the contract, typically a choice of law clause, or as an implied term. If a foreign legal system is selected, the Zimbabwean courts will apply that legal system if it is not contrary to public policy.

Save for specific contracts which may have terms/form prescribed by statute, there are no general laws for the form of a commercial contract in Zimbabwe. Commercial contracts may be concluded orally or in writing, and the terms of the contract must be clear and unambiguous. Contracts may also be concluded through unilateral offers (whereby the party to whom the offer has been made will not have the opportunity to negotiate the terms of the contract), or bilaterally, where the parties may negotiate the terms. Commercial contracts may also borrow and adopt internationally recognised forms such as the Loan Market Association precedents.

In relation to the sale of goods, the following legislation mainly applies to commercial contracts in Zimbabwe:

• Contractual Penalties Act [Chapter 8:04]
• Consumer Protection Act [Chapter 14:44]
• Competition Act [14:28]
• Hire Purchase Act [Chapter 14:09]
• Deeds Registries Act [Chapter 20:05]
• Control of Goods Act [Chapter 14:05]

Certain contracts are governed by legislation that imposes obligations that cannot be derogated from. A prime example is the Consumer Protection Act, which establishes mandatory consumer rights, including fair dealing, disclosure duties, product quality guarantees and protection against unfair contract terms. These rules apply regardless of what the parties agree in the contract.

Under the Deeds Registries Act, contracts involving immovable property or long-term leases are subject to mandatory registration and formal execution requirements.

Consumer Protection

In 2023, regulations providing for consumer protection and specifically the conduct of conciliation and arbitration of disputes between parties were promulgated through the Consumer Protection (General) Regulations, 2023. This is meant to ensure an efficient dispute resolution mechanism for the parties involved.

Competition Law

The Competition Amendment Bill, 2025 represents a significant potential shift in Zimbabwe’s commercial regulatory landscape. It proposes to expand the investigative and enforcement powers of the Competition and Tariff Commission, aligning Zimbabwe more closely with modern competition regimes. A central focus is the tightening of anti-collusion enforcement: broadening the definition of prohibited co-ordinated conduct, increasing penalties for non-compliance, and allowing greater scrutiny of arrangements that restrict competition.

Another major reform is the modernisation of merger control and public-interest review. Proposed amendments would require more comprehensive notifications and closer examination of vertical restraints, such as territorial restrictions, resale price maintenance, and exclusive dealing clauses common in franchise, distribution and supply contracts. These developments suggest that restrictive contractual provisions that may previously have escaped regulatory attention will be subject to stricter oversight.

For businesses, this means contractual freedom will increasingly be balanced against competition policy objectives. Clauses that unduly restrict market access or distort competition risk invalidation or regulatory sanction. Commercial contracts drafters will need to adapt contract structures to ensure compliance with the amended Act. This marks a move towards a more interventionist, internationally aligned competition framework in Zimbabwe.

The Zimbabwean jurisdiction generally allows parties the freedom to select which law will apply to their contract. However, the intention to select that specific choice of law must be clear, must not be contrary to public policy and should not contravene mandatory laws. In the absence of a choice of law clause within the agreement, the courts will determine which legal system best suits the agreement by assessing the following factors:

• the place of contracting;
• the domicile or principle place of business of the parties;
• the subject matter of the contract;
• the currency of payment; and
• whether performance requires compliance with laws of a particular country.

Except in limited circumstances prescribed by law, for example in relation to activities carried out in a special economic zone, the following is a list of local Zimbabwean laws that cannot be infringed upon if foreign law is selected as the governing law for a commercial contract:

• Exchange Control Regulation Act [Chapter 22:05]
• Reserve Bank Act [Chapter 22:15]
• Companies and Other Business Entities Act [Chapter 24:31]
• Competition Act [Chapter 14:28]
• Public Procurement and Disposal of Public Assets Act [Chapter 22:23]
• Labour Act [Chapter 28:01]
• Tax legislation, ie, VAT Act [Chapter 23:12], Income Tax Act [Chapter 23:06], Capital Gains Tax Act [Chapter 23:01], etc

Under Zimbabwean law, parties to a commercial contract may choose a foreign jurisdiction to govern disputes, even if one party is domiciled or incorporated in Zimbabwe. This is based on the principle of party autonomy, which is well recognised in Zimbabwean private international law.

A choice of jurisdiction clause (or choice of court clause) is enforceable provided it is clear, unambiguous and not contrary to public policy. Zimbabwean courts generally respect and give effect to such clauses, particularly in commercial contracts between parties of equal bargaining strength.

However, the Zimbabwean courts retain residual discretion to assume jurisdiction despite a foreign jurisdiction clause in exceptional circumstances, such as:

• if enforcing the clause would be unconscionable or contrary to public policy;
• if the foreign forum is not practically accessible or fair; or
• where there is strong connecting factors to Zimbabwe.

Importantly, a choice of jurisdiction clause is distinct from a choice of law clause, though the two are often combined. While parties can choose a foreign jurisdiction, Zimbabwean mandatory laws may still apply.

It is possible for two parties domiciled in Zimbabwe to choose a foreign jurisdiction for the exact same reasons expressed above.

Under Zimbabwean law, if one or both of the contracting parties are from Zimbabwe, they may validly agree to resolve disputes by arbitration. Zimbabwe has a well-developed arbitration framework governed by the Arbitration Act [Chapter 7:15], which incorporates the UNCITRAL Model Law.

If the parties choose arbitration, Zimbabwean courts will generally uphold the arbitration agreement and give effect to Article II (3) of the New York Convention, to which Zimbabwe is a State Party. This means that if a party brings a dispute before a local court in breach of a valid arbitration clause, the court will stay the proceedings and refer the matter to arbitration, provided the arbitration agreement is not null, void, inoperative or incapable of being performed.

Similarly, under Article V(2) of the Convention, Zimbabwean courts may refuse enforcement of a foreign arbitral award only on limited grounds, including public policy.

There are several forms in which to conclude an effective contract within the Zimbabwean jurisdiction. In order for any of the forms to be valid, it is essential that all the requirements for a valid contract are met, namely:

• there must be an offer;
• there must be an acceptance of that offer;
• the parties must have the intention to create legal relations;
• the parties must have the capacity to enter into the agreement; and
• the contract and its subject matter must be legal.

Provided that the above are present, the agreements may take the following forms within this jurisdiction depending on the nature of the transaction, the intention of the parties, and any applicable statutory formalities. The general rule is that no particular form is required unless imposed by law.

Oral Contracts

A valid contract may be concluded verbally through offer and acceptance, provided there is consensus, capacity, lawful cause and possibility of performance. Oral contracts are enforceable, though evidentiary difficulties may arise.

Written Contracts

Many commercial agreements are reduced to writing to provide clarity and proof of terms. Writing is not essential for validity except where statute requires it, such as the requirement for a notarial lease to be reduced to writing under the Deeds Registries Act.

Contracts by Conduct (Tacit Contracts)

A contract may be formed by the conduct of the parties, where their actions objectively demonstrate mutual consent.

Zimbabwean law does not expressly codify the doctrine of culpa in contrahendo. However, Zimbabwe’s private law is derived from Roman-Dutch common law as received through South Africa, which recognises liability for wrongful or negligent conduct during pre-contractual negotiations.

Pre-contractual fault is typically addressed through delictual claims for negligent misrepresentation, estoppel or unjust enrichment. A party may be held liable where, during negotiations, they act negligently or in bad faith, induce reliance and cause foreseeable loss.

Accordingly, while the label “culpa in contrahendo” is not used in Zimbabwean case law, its substance is recognised through general delictual principles. Parties who negotiate without good faith, or negligently induce reliance on incorrect statements, may incur liability for pre-contractual loss.

Under Zimbabwean law, standard terms and conditions of one party can be incorporated into a commercial contract provided that the parties manifested mutual consent to their application, in accordance with the general requirements for contract formation (offer, acceptance, intention to create legal relations). Incorporation may occur expressly, by referring to the terms in the contract, or impliedly, where a party knew or ought reasonably to have known of the terms and acted in reliance on them.

Incorporation requires that the terms be reasonably brought to the other party’s attention prior to or at the time of contracting; onerous or unusual clauses must be explicitly highlighted to be enforceable. Failure to adequately notify the counterparty may render the standard terms unenforceable.

In Zimbabwe, the law on standard terms applies whenever one party seeks to incorporate pre-prepared terms into a contract. The central principle is that these terms are enforceable only if they form part of the agreement between the parties, in accordance with general contract law requirements already highlighted: offer, acceptance, capacity, legality and mutual intention to be legally bound.

Standard terms apply in an agreement by either express or implied incorporation:

• Express incorporation: The contract explicitly refers to the standard terms (eg, “This agreement is subject to the Supplier’s Standard Terms and Conditions”).
• Implied incorporation: The terms may be implied by the parties’ conduct, prior dealings or common trade practice, provided the other party knew or should have known about them.

Standard terms apply in an agreement from the moment the contract is formed, and only to the extent the other party has been properly notified.

Standard terms may be invalidated if they place one party at an unreasonable disadvantage, particularly in consumer contracts. The clearest legal basis for this is found in the Consumer Protection Act, which expressly prohibits the use of unfair, unreasonable or unjust contract terms. A term may be struck down if it is excessively one-sided, was not adequately disclosed, or creates an unjustified imbalance between the rights and obligations of the consumer and supplier. Clauses that limit or exclude liability, impose excessive penalties or waive statutory rights are particularly vulnerable to challenge.

The Consumer Protection Commission and the courts have the power to refuse to enforce such terms or declare them void.

Beyond the consumer context, Zimbabwe’s common law empowers courts to strike down terms that are contra bonos mores (against public policy). If a standard term is oppressive, is unconscionable or arises from a significant inequality of bargaining power, it may not be enforced.

The Contractual Penalties Act [Chapter 8:04] provides an additional safeguard by allowing courts to reduce or nullify disproportionate penalty clauses. Thus, while freedom of contract is respected, it is not absolute; unfair standard terms can be set aside to protect weaker parties and uphold public policy.

The battle of forms occurs when two parties exchange standard terms and conditions that conflict with each other, typically in commercial contracts. Under Zimbabwean law, there is no specific statutory provision addressing this, so courts apply general principles of contract formation and common law rules.

The courts will assess offer and acceptance; the contract is formed on the terms of the party whose offer or acceptance is last expressed and agreed upon, unless the counterparty rejects the new terms.

Most commercial contracts may be executed electronically; however, certain categories of contracts require original signatures or notarial execution for validity and enforceability. The Deeds Registries Act governs transactions involving immovable property and stipulates that any deed transferring, hypothecating or creating real rights (such as ownership, servitudes or long-term leases) must be executed in original and registered in the Deeds Registry. Such instruments, including notarial leases, servitudes, cessions of rights and mortgage bonds, must be executed before a notary public, as they create or affect real rights binding on third parties.

Similarly, leases exceeding five years or those intended to bind successors must be reduced to writing, signed in original form and registered to acquire real effect. While notarial execution is unnecessary for surety agreements, they must be in writing and signed by the surety to satisfy common law requirements.

The registration of certain commercial contracts is required either for the validity of the contract itself or for its enforceability against third parties. While most commercial contracts do not require registration, several important categories do:

• Deeds affecting immovable property: Contracts involving the sale, transfer or mortgage of land, as well as long leases, must be registered in the Deeds Registry under the Deeds Registries Act to be valid against third parties. Certain servitudes and mineral rights also require registration.
• Notarial bonds: A notarial bond over movable property must be executed before a notary public and registered in the Deeds Registry to create a real right enforceable against third parties.
• Contracts creating security interests over immovable property: These are required to be registered at the Collateral Registry under the Movable Property Security Interests Act [Chapter 14:35], to protect priority against other creditors.

The requirements of a valid and enforceable contract are outlined in 3.1 Necessary Form.

Agreements are governed largely by freedom of contract tempered by statutory controls. The concept and differentiation between B2B and B2C contracts is not as firmly entrenched in Zimbabwe as it is in other jurisdictions. The Consumer Protection Act applies to all transactions save for those outlined within Section 2 of the Consumer Protection Act. The transactions listed in Section 2 are as follows:

• goods or services promoted or supplied to the State;
• where the consumer is a juristic person whose asset value or turnover, at the time of the transaction, equals or exceeds the threshold value prescribed by the Minister;
• transactions granted an exemption by the Minister of Industry and Commerce; and
• services supplied under an employment contract.

In the event, the Consumer Protection Act applies to most consumer agreements and contracts, despite being between businesses or individual consumers.

The Consumer Protection Act imposes non-derogable duties: prohibition of unfair terms, mandatory disclosures, implied quality and safety standards, complaint and remedies procedures, and special protections for credit sales. Many provisions cannot be contracted out of and bind traders dealing with consumers.

Certain statutes cut across all agreements. The Contractual Penalties Act permits courts to reduce disproportionate penalty or liquidated-damage clauses, so parties must draft such clauses carefully. The Competition Act prohibits anti-competitive clauses (price fixing, market allocation, abuse of dominance) and therefore affects all agreements. The Hire Purchase Act imposes specific formalities and disclosure requirements for consumer credit/hire purchase transactions. Finally, cross-border payments, foreign-currency pricing and related obligations are regulated under the Exchange Control Act, which can restrict payment terms and repatriation in all agreements.

As highlighted in 4.1 Different Laws, the principal legislation governing consumer protection in B2C contracts is the Consumer Protection Act. This Act establishes a robust framework of mandatory consumer rights that businesses must respect and cannot contract out of.

Key rights include the right to fair and honest dealing, which prohibits misleading representations, deceptive advertising and unfair business practices. Consumers are entitled to full and accurate disclosure of material information before entering into a contract, including price, quality, terms of service and any associated risks. There is also a right to fair value, good quality and safety, meaning that goods and services supplied must be safe, durable and fit for their intended purpose.

The Act further provides for the right to cancel certain agreements, particularly those involving direct marketing or distance selling, within a prescribed “cooling off” period. Consumers also have the right to seek redress and compensation through the Consumer Protection Commission or the courts in cases of unfair treatment or defective products.

In Zimbabwean commercial law, liability arises when a party fails to fulfil a legally binding contractual obligation. The principle of pacta sunt servanda (“agreements must be kept”) underpins all commercial contracting. Once parties freely conclude a valid contract, they are legally bound to perform its obligations, and failure to do so may result in liability.

To establish liability, five elements typically apply:

• valid contract;
• breach of an obligation;
• causation between breach and loss;
• loss or damage; and
• no lawful excuse (eg, supervening impossibility).

Importantly, fault is not always required; mere failure to perform may be enough.

The primary legal consequence of liability is an obligation to compensate the innocent party. Damages aim to place the injured party in the position they would have been in had the contract been performed. Other remedies include specific performance and cancellation. Liability may be primary, accessory, or joint and several, and can extend through agency or corporate structures.

Defences such as supervening impossibility, force majeure and prescription may limit or exclude liability.

In Zimbabwe, punitive damages are not awarded for breach of contract. The law follows Roman-Dutch common law, which focuses on compensating the innocent party rather than punishing the wrongdoer. When a breach occurs, damages are calculated to place the injured party in the position they would have been in had the contract been properly performed.

Even if the breach is deliberate or in bad faith, courts do not impose additional sums as punishment. Instead, they assess actual loss, including direct and foreseeable consequential damages. Punitive damages are therefore not a remedy in contract law.

An exception may arise through statute or delict (tort). Some laws impose statutory penalties, though these are specific and regulated. If the breach also amounts to a delict, a separate delictual claim may be brought, and aggravated damages may be considered.

Parties may agree to liquidated damages or penalty clauses, but under Section 4 of the Contractual Penalties Act, the courts may reduce penalties that are disproportionate to the actual loss.

Liability without fault in Zimbabwe is provided for in Section 16 of the Consumer Protection Act. The provision imposes liability on the producer, importer, distributor or retailer of any goods for any harm caused wholly or partly as a consequence of:

• supplying any unsafe goods;
• a product failure, defect or hazard in any goods; or
• inadequate instructions or warnings provided to the consumer regarding any hazard arising from or associated with the use of any goods.

Where more than one person is found liable in terms of Section 16, their liability is joint and several. Harm that may cause one to be held liable includes death of, or injury to, or an illness of any natural person and any economic loss that results from such harm. Additionally, harm that may cause one to be liable includes any loss of, or physical damage to any property and any economic loss that results from such harm.

Section 17 of the Consumer Protection Act, read with Section 16(5), provides defences from liability without fault as follows:

• if the unsafe product characteristic, failure, defect or hazard that results in harm is wholly attributable to compliance with any public regulation;
• if the person proceeded against did not at any time supply the product to another;
• if the alleged defect, failure or hazard did not exist in the goods at the time it was supplied by that person to another person alleged to be liable;
• if the defect, failure or hazard was wholly attributable to compliance by that person with instructions provided by the person who supplied the goods to that person;
• if it is unreasonable to expect the distributor or retailer to have discovered the unsafe product characteristic, failure, defect or hazard, having regard to that person’s role in marketing the goods to consumers; or
• if the matter has prescribed.

In Zimbabwe, parties to a commercial contract may limit or exclude liability by agreement, as part of the principle of freedom of contract. A limitation of liability clause is generally enforceable if it is clear, lawful and not contrary to public policy.

Courts interpret such clauses strictly, and any ambiguity is resolved against the party relying on it. A party cannot exclude liability for fraud, intentional wrongdoing or gross negligence, and statutory duties cannot be avoided by contract.

The form of the clause matters. If the limitation is in standard terms, courts are more cautious, especially where one party had little bargaining power or was not given sufficient notice of the clause. By contrast, where the clause is individually negotiated between sophisticated commercial parties, it is more likely to be upheld, as this reflects true consent and risk allocation.

Certain statutes also restrict limitation clauses. For example, the Contractual Penalties Act allows courts to reduce excessive penalties, while the Consumer Protection Act limits unfair terms in consumer contracts.

The courts may, in exceptional circumstances, allow relief from performance due to supervening impossibility or force majeure, in the absence of specific provision. The party alleging the circumstances must provide evidence sufficient to prove this claim, and the court will assess and determine accordingly.

In Zimbabwe, it is standard commercial practice for contracts to include a force majeure clause or similar provision, which allocates the risk of events beyond a party’s control, such as natural disasters, war, government prohibitions or pandemics. These clauses typically specify whether performance is suspended, delayed or excused, and set out procedures for notice, mitigation and termination. Their inclusion is particularly common in long-term supply agreements, construction contracts and international trade arrangements, where unforeseen disruptions are more likely.

However, Zimbabwe has no statutory force majeure regime. In the absence of a contractual clause, a party may still seek relief under the common law doctrine of supervening impossibility of performance. Relief requires that:

• performance has become objectively impossible, not merely more difficult or expensive;
• the event was unforeseeable at the time of contracting;
• the impossibility is not self-induced; and
• the affected party has taken reasonable steps to mitigate or avoid the impact.

Courts have recognised this principle as excusing performance when obligations cannot be fulfilled due to external events, as in the persuasive authority Peters, Flamman & Co v Kokstad Municipality 1919 AD 427 and re-emphasised in National University of Science and Technology v National University of Science and Technology Academic Staff and Others HB 7/06. While a force majeure clause provides clarity and certainty, its absence does not bar relief, though the common law framework may result in narrower or more contested remedies.

There is no statutory right for a party to amend or renegotiate a commercial contract solely on the basis of unforeseen hardship or increased difficulty. The law does not recognise a general doctrine of “economic hardship”, as displayed by the case of Njanike Construction Company (Pvt) Ltd v Turnall Holdings Limited 25-HH-605. Relief in such circumstances is therefore very limited and arises only under established common law principles.

The most relevant principle is the doctrine of supervening impossibility. A party may be excused from performance if an unforeseen event renders performance objectively impossible, not merely more onerous or costly.

Similarly, the doctrine of frustration may discharge obligations where an event fundamentally alters the nature of performance, but again, it requires that the performance has become radically different, not merely more burdensome.

In the absence of a contractual hardship or force majeure clause, Zimbabwean courts will generally not compel renegotiation or adjustment of commercial terms. Parties are expected to bear commercial risks unless performance is objectively impossible or frustrated.

In Zimbabwe, it is not standard practice for commercial contracts to include a hardship clause, which would provide for amendment or renegotiation in the event that one party experiences substantial hardship. Unlike force majeure clauses, which are common and address the risk of unforeseen events making performance impossible, hardship clauses are rarely included in domestic commercial agreements.

Zimbabwean law does not provide a statutory right to renegotiate or amend a contract solely because performance has become more difficult or costly. Relief in such circumstances is only available under common law. The relevant principles are the doctrines of supervening impossibility and frustration, which excuse or suspend performance only if an unforeseen event renders performance objectively impossible or radically different, not merely more onerous or expensive. Courts will generally not compel renegotiation in the absence of express contractual provision.

In practice, parties who anticipate potential hardships may voluntarily include hardship clauses to allocate risk and provide a mechanism for renegotiation or adjustment. Without such a clause, parties are expected to bear commercial risk, and relief under the common law is limited and narrowly applied, reinforcing the importance of explicitly addressing hardship in contractual drafting.

Under Zimbabwean law, warranties and remedies for non-fulfilment, late performance or breach of contractual terms are governed primarily by common law, supplemented by sector-specific statutes where applicable.

Warranties generally distinguish between express and implied obligations. Express warranties arise from specific contractual promises, while implied warranties may arise under common law or statute, particularly in consumer transactions, ensuring that goods or services meet a reasonable standard of quality, are fit for purpose and correspond with descriptions provided.

Remedies for non-fulfilment or breach depend on the nature and severity of the breach:

• Specific performance: A court may order the breaching party to perform their contractual obligations, particularly in contracts involving unique goods or services.
• Cancellation/rescission: The innocent party may terminate the contract if the breach is material or goes to the root of the agreement.
• Damages: Compensation is available for losses directly and foreseeably caused by the breach.
• Suspension of performance: The innocent party may temporarily withhold performance until the breach is remedied.
• Restitution: Benefits conferred under unjust enrichment principles may be recovered, where appropriate.

For late performance, remedies may include damages for delay or, where time is of the essence, termination. Courts assess the terms of the contract, the seriousness of the breach, and any statutory provisions to determine appropriate relief.

Under Zimbabwean law, parties to a commercial contract may deviate from or modify the default warranties and remedies provided under common law, provided that such modifications are expressly agreed and not contrary to law or public policy; this reflects the principle of freedom of contract.

Parties may, for example, limit or exclude liability for certain breaches, delays or defects, as long as the clause is reasonable and enforceable. Warranty obligations can be adjusted, such as specifying a shorter or longer liability period or setting particular performance standards. Remedies may also be contractually altered, for instance by providing for liquidated damages, repair or replacement, or restricting the right to terminate the contract.

However, deviations are subject to important limits. The Consumer Protection Act prohibits unfair, misleading or unconscionable terms in relation to consumer contracts which fall under its purview. Generally, courts may scrutinise clauses that are extremely onerous or unconscionable.

To be effective, any deviation must be clearly incorporated into the contract, be mutually agreed, and not contravene mandatory statutory provisions or fundamental contract law principles. In practice, commercial parties often use negotiated clauses to allocate risk efficiently while ensuring enforceability.