Since the shareholders are contracts, they are subject to the ordinary rules of contract law and, in the event that a dispute over the size of a provision of the shareholder contract arises, a court would attempt to establish, as a primary means of interpretation, what was the intention of the parties on the basis of the text of the contract. On the other hand, in many respects, language is fairly standardized in constitutions and many of the provisions of the Constitutions have been subject to judicial review over the years, so there may be a judicial precedent that can assist in the interpretation of these provisions. Situations of disagreement between the Constitution and a shareholders` pact are taken into account in Section 8. The Constitution is the guiding document of each company. Legally, the Constitution automatically binds the company and its members (Section 31 Companies Act, 2014), although members are bound by the statutes only as shareholders and not as other members. As explained above, a shareholders` pact can generally only be amended with the agreement of all parties to the agreement. The shareholders` pact is open to the definition of a less favourable method of variation than unanimously, which would most often be the case when a party (for example. B a venture capitalist) has superior bargaining power. In addition, as noted above, the High Court has the power under Section 212 of the Act to amend or even terminate a shareholder contract.
It is customary to note that individual promoters of a company may hold in their personal names certain valuable rights that are used by the company (for example.B. rights to the source code or other IPs, domain names, trademarks, etc.). It is common for proponents to have done a significant amount of preliminary work prior to the creation or start of the trade, and proponents may, with the best of intentions, have acquired such valuable rights in their own name in order to transfer them to the business, but cannot reach the business. In the end, this can have unfortunate consequences for a business if relations with a developer holding such rights are broken and such a developer claims ownership of those rights. Sometimes the transfer of these rights is dealt with in a service agreement between the company and the project proponent or in a separate company for intellectual property rights.