Contract Law in South Africa

✍ Scribed by Louis F. van Huyssteen, Catherine J. Maxwell

• Publisher: Wolters Kluwer
• Year: 2021
• Tongue: English
• Leaves: 350
• Edition: 7
• Category: Library

✦ Synopsis

Derived from the renowned multi-volume International Encyclopaedia of Laws, this practical analysis of the law of contracts in South Africa covers every aspect of the subject-definition and classification of contracts, contractual liability, relation to the law of property, good faith, burden of proof, defects, penalty clauses, arbitration clauses, remedies in case of non-performance, damages, power of attorney, and much more. Lawyers who handle transnational contracts will appreciate the explanation of fundamental differences in terminology, application, and procedure from one legal system to another, as well as the international aspects of contract law. Throughout the book, the treatment emphasizes drafting considerations.

An introduction in which contracts are defined and contrasted to torts, quasi-contracts, and property is followed by a discussion of the concepts of 'consideration' or 'cause' and other underlying principles of the formation of contract. Subsequent chapters cover the doctrines of 'relative effect', termination of contract, and remedies for non-performance. The second part of the book, recognizing the need to categorize an agreement as a specific contract in order to determine the rules which apply to it, describes the nature of agency, sale, lease, building contracts, and other types of contract. Facts are presented in such a way that readers who are unfamiliar with specific terms and concepts in varying contexts will fully grasp their meaning and significance.

Its succinct yet scholarly nature, as well as the practical quality of the information it provides, make this book a valuable time-saving tool for business and legal professionals alike. Lawyers representing parties with interests in South Africa will welcome this very useful guide, and academics and researchers will appreciate its value in the study of comparative contract law.

✦ Table of Contents

Cover
Title Page
Half Title
Copyright
The Authors
Table of Contents
List of Abbreviations
General Introduction
§1. THE GENERAL BACKGROUND OF THE COUNTRY
I. Geography
II. Population
III. Economy, Labour Relations, and Infrastructure
IV. Political System
V. Cultural, Social, and Economic Values
§2. SOUTH AFRICAN LAW BELONGS TO THE CIVIL LAW LEGAL FAMILY
§3. PRIMACY OF LEGISLATION
§4. POSITION OF THE JUDICIARY
I. Role and Function of the Judiciary
II. System of Precedent
III. Hierarchy of Courts and Law Reporting
§5. DISTINCTION BETWEEN PUBLIC LAW AND PRIVATE LAW
§6. DISTINCTION BETWEEN CIVIL LAW AND COMMERCIAL LAW
Chapter 1. Introduction to the Law of Contract
§1. DEFINITION OF A CONTRACT
I. A Contract as a Juristic Act
II. Agreement or Reliance as Facts Creating a Contract
III. Intention to Create a Contract, Consideration, and Legality
IV. Civil and Natural Obligations
V. A Contract Distinguished from Other Legally Relevant Agreements
VI. A Contract Is a Multilateral Legal Act
VII. A Contract Creates Personal Rights and Duties
VIII. Bases of a Contract in Brief: Definitions
§2. HISTORICAL BACKGROUND OF THE LAW OF CONTRACT
I. Roman-Dutch Law
II. Concepts of Roman and Roman-Dutch Law in the Modern Law of Contract
III. The Jus Commune
IV. English Law
V. Indigenous Law
§3. CLASSIFICATION OF CONTRACTS
I. ‘Consensual’, ‘Real’, and ‘Solemn’ Contracts
II. Unilateral, Multilateral, and Reciprocal Contracts
III. Express and Tacit Contracts
IV. Nominate and Innominate Contracts
V. Standard Form Contracts
VI. Onerous and Gratuitous Contracts
VII. Aleatory Agreements
VIII. Accessory Obligations
IX. Collateral Contracts
X. Pacta de Contrahendo
XI. Contracts in Favour of Third Parties
§4. CONTRACTS AND DELICTS (TORTS)
I. Law of Delict and Tort
II. Blurring of Distinction Between a Contract and a Delict
III. Culpa in Contrahendo
IV. Rescission of a Contract and Delict
V. Delictual Damages and Contract
VI. Delictual Damages for Negligent Misstatements in Contrahendo
VII. Breach of Contract and Delict
VIII. Concurrence of Actions
§5. CONTRACTS AND QUASI-CONTRACTS
I. ‘Quasi-Contract’ Is Not a Term of Art in South African Law
II. No General Enrichment Action: Development of Liability
III. Specific Enrichment Actions
A. Condictio Causa Data Causa Non Secuta
B. Condictio Ob Turpem Vel Iniustam Causam
C. Condictio Indebiti
D. Condictio Sine Causa Specialis
E. Action for Improvements
F. Negotiorum Gestio
G. Claim Against a Minor
H. Alienation of Land: Statutory Enrichment Action
I. Claim for Reduced Performance
§6. CONTRACT AND LAW OF PROPERTY
I. Real Rights and ‘Equitable Ownership’
II. Creation of Real Rights and Kinds of Real Rights
III. Transfer of Real Rights and Registration
IV. A Contract Does Not Transfer Rights
§7. CONTRACTS AND TRUSTS
I. Relationship Between a Contract and a Trust: Nature of a Trust
II. Definition of a Trust
III. Main Features of a Trust
A. Creation of a Trust
B. Transfer of Trust Property
C. A Trust Is Not a Legal Person
D. Separation of the Trust Estate
E. Office of Trustee
§8. GOOD FAITH AND FAIR DEALING
I. The Development of a General Doctrine of Good Faith in South African Common Law: Ubuntu
II. ‘Subjective’ Good Faith: Doctrine of Notice
III. Rescission and Good Faith
IV. No Duty to Negotiate in Good Faith
V. Good Faith with Respect to Content, Execution, and Enforcement of a Contract
A. Interpretation
B. Supplementing Function
C. Derogating Function: Illegality
D. Changed Circumstances
E. Rechtsverwerking (Limitation of Enforcement of Rights) and Estoppel by Representation
F. Future Development
VI. Direct Legislation
§9. EFFECT OF THE CONSTITUTION ON LAW OF CONTRACT
I. Effect of the Bill of Rights on Private Law
II. Effect on Law of Contract: Restraint of Trade
III. Freedom of Contract as a Leading Principle and Future Developments
§10. STYLE OF DRAFTING
§11. SOURCES OF LAW OF CONTRACT
I. Classification of Areas of South African Law
II. Sources of Law of Contract
III. Finding the Law
A. Case Law
1. Method of Citation of Cases
B. Legislation
C. Books, Periodicals, and Encyclopaedias
1. Method of Citation of Literature
Part I. General Principles of the Law of Contract
Chapter 1. Formation
§1. AGREEMENT, QUID PRO QUO (RECIPROCITY), AND RELIANCE
I. Offer and Acceptance
A. Offer
B. Revocation of Offer, Option Contracts, and Lapse of Offer
C. Pre-contractual Fault
D. Offer and Promise to Contract
E. Offer or Invitation to Treat
F. Acceptance of Offer
G. Contract by Correspondence and Other Methods When Parties Are Not in Each Other’s Presence
II. Intention to Create Legal Relations
A. Consideration Is Not a Requirement
B. Gratuitous Promises
C. Natural Obligations
III. Reasonable Reliance
§2. FORMAL AND EVIDENTIAL REQUIREMENTS
I. Formal Requirements
A. Contracts by Deed
B. ‘Solemn’ Contracts
C. Formalities Imposed by Parties and by Statute
1. Formalities Imposed by the Parties
2. Formalities Imposed by Statute
D. Function of a Notary
II. Evidential Requirements
A. Ordinary Principles of Evidence Apply
B. Documentary Evidence
C. Probative Effect of Notarial Instruments
D. Probative Effect of Signed and Unsigned Documents
E. Probative Effect of the Date of a Signed Document
F. Registration
G. Admissibility and Probative Effect of Copies, Books of Account, and Other Records
H. Evidence by Testimony, Presumptions of Law and Fact, and Inferences
I. Proving a Tacit Contract or Tacit Term
J. Admissions
K. Expert Evidence
L. Direct and Circumstantial Evidence
M. Other Admissible Evidence
N. Discovery of Documents and Pre-trial Conference
III. Burden of Proof
§3. LIABILITY AND NEGOTIATIONS
I. No General Theory of Pre-contractual Liability
II. When Consensus and Other Elements for Formation of a Contract Are Not Present and No Contract Results
III. Breakdown of Negotiations
IV. Liability for Pre-contractual Conduct When a Contract Has Come into Being
V. Duty to Inform
VI. Rescission and Restitution
VII. Damages
VIII. Reduction of Performance or ‘Restitutionary Damages’
Chapter 2. Requirements for Substantive Validity
§1. CAPACITY OF PARTIES
I. Minors
II. Aliens
III. Married Women
IV. Insanity
V. Juristic Persons
§2. MISTAKES AND DEFECTS OF CONSENT
I. Mistakes
A. Material Mistakes and Errors in Substantia, in Persona, and in Corpore
B. Mistakes That Will Not Affect the Creation of a Contract
C. Protection of Reasonable Reliance on Consensus in Cases of Material Mistakes That Lead to Dissensus
II. Improperly Obtained Consensus and Grounds for Rescission of a Contract (Defects of Will or Consent)
A. Laesio Enormis
B. Fraud and Negligent Misrepresentation
C. Innocent Misrepresentation
D. Duress (Violence)
E. Undue Influence
F. A General Ground for Rescission
§3. OTHER REQUIREMENTS FOR THE EXISTENCE OF A CONTRACT
I. Causa (Just Cause)
II. Certainty
III. Initial Possibility of Performance
IV. Legality and Enforceability
§4. CONSEQUENCES OF ABSENCE OF CONSTITUTIVE ELEMENTS OF A CONTRACT AND CONSEQUENCES OF CONSENT IMPROPERLY OBTAINED
I. Absence of Obligations, or So-Called Nullity
II. Nullity or Unenforceability in Cases of Illegality
III. Claim for Return When No Legal Obligations Arise
A. Nature of the Claim
B. Consequences with Respect to Third Parties and Between Parties Themselves
IV. Severability
V. Rescission and Restitution in the Case of an Improperly Obtained Consensus
VI. Damages and Reduction of Purchase Price
Chapter 3. The Contents of a Contract
§1. THE DIFFERENT CLAUSES
I. Ascertainment and Classification of Terms
II. Exemption and Limitation Clauses
III. Penalty Clauses
IV. Arbitration Clauses
§2. INTERPRETATION
§3. CONDITIONAL CONTRACTS
I. Conditions and Other Terms
II. Classification of Conditions
III. Impossible and Illegal Conditions
IV. Effect of a Condition
A. Pendente Conditione
1. Suspensive Condition
2. Resolutive Condition
3. Fictional Fulfilment of a Condition
B. Eveniente Conditione
C. Deficiente Conditione
Chapter 4. Privity of Contract
§1. PRIVITY OF CONTRACT
I. Third Parties and a Contract
II. Contract for the Benefit of a Third Party
A. Requirements for Validity
B. Position Prior to Acceptance by a Third Party
C. Position after Acceptance by a Third Party
§2. TRANSFER OF CONTRACTUAL RIGHTS AND DUTIES
I. Transfer of Rights: Cession
A. Requirements for Effective Cession and Formalities
B. Consequences of Cession
C. Consequences of Out-and-Out Cession for Third Parties Other Than the Debtor
II. Transfer of Duties: Delegation and Assignment
§3. SUBCONTRACTING
I. Liability of the Main Contractor for the Conduct of a Subcontractor
II. Relationship Between a Co-contractant and Subcontractor
§4. EFFECT OF INSOLVENCY ON A CONTRACT
Chapter 5. The End of a Contract
§1. PERFORMANCE AND BREACH
I. Performance
A. Who May Perform?
B. To Whom Must Performance Be Made?
C. What Must Be Performed?
D. Special Rules as to Payment of Money Debts
E. Payment with Subrogation
II. Breach
A. Nature of a Breach
B. Forms of Breach and Requirements
1. Delay by a Debtor: Mora Debitoris
2. Mora Creditoris
3. Positive Malperformance by a Debtor
4. Prevention of Performance by a Debtor
5. Repudiation by a Debtor
C. Fault as a General Requirement
D. Consequences of Breach of Contract in General
§2. IMPOSSIBILITY OF PERFORMANCE, FRUSTRATION, AND HARDSHIP
I. Irresistible Force
II. Supervening Impossibility of Performance
III. Objective or Practical Impossibility
IV. Consequences of Supervening Impossibility
V. Different Allocation of Risk for Supervening Impossibility by Contract and Operation of Law
A. Contractual Allocation of Risk
B. Allocation of Risk by Operation of Law
VI. Changed Circumstances and Good Faith
§3. DISCHARGE AND TERMINATION BY AGREEMENT
I. Release
II. Novation
Chapter 6. Remedies
§1. GENERAL
§2. DEFENCE OF NON-PERFORMANCE BY THE OTHER PARTY
I. Exceptio Non Adimpleti Contractus (Right to Withhold)
II. Lien and Compensation
A. Lien
B. Compensation (Set-Off)
§3. SPECIFIC PERFORMANCE AND ENFORCEMENT OF JUDGMENT DEBTS
I. Claim for Specific Performance
II. Enforcement of Judgment Debts
§4. TERMINATION
I. Right to Cancel
II. Exercising and Lapse of a Right to Cancel
III. Consequences of Cancellation
§5. RESTITUTION
§6. DAMAGES
I. General Requirements for a Claim for Damages
II. Damage
A. Non-pecuniary Loss
B. Damnum Emergens and Lucrum Cessans
C. ‘Certain’ Damage
D. Specific Measures of Damages
III. Causal Relation
IV. Mitigation of Damages
V. Moment for Calculation of Damages
VI. Methods of Assessing Damages in Certain Kinds of Cases
VII. Exemption Clauses and Penalty Clauses
§7. PRESCRIPTION AND EXPIRY PERIODS
I. Interruption of Prescription
II. Suspension or Delay of Prescription
III. Invalidity or Rescission of a Contract
IV. Delict
V. Conflict of Laws
VI. Invocation of Prescription
VII. Computation of Periods of Prescription
VIII. Expiry Periods
IX. Estoppel by Representation: Loss of Ability to Claim as a Result of Representation
Part II. Specific Contracts
Chapter 1. Agency
§1. DUTIES OF AN AGENT
§2. DUTIES OF A PRINCIPAL
§3. CONSEQUENCES OF DIRECT REPRESENTATION
§4. APPARENT OR OSTENSIBLE AUTHORITY
§5. RELATIONSHIP BETWEEN AN AGENT AND A THIRD PERSON
§6. RELATIONSHIP BETWEEN THE AGENT AND THE PRINCIPAL
§7. TERMINATION OF AN AGENT’S AUTHORITY AND THE CONTRACT BETWEEN THE AGENT AND THE PRINCIPAL
§8. INDIRECT REPRESENTATION AND THE DOCTRINE OF THE UNDISCLOSED PRINCIPAL
§9. BROKING
Chapter 2. Bailment
§1. CONTRACT OF BAILMENT (DEPOSIT) AND RIGHTS AND DUTIES OF PARTIES
§2. NEGOTIORUM GESTIO
§3. SPECIAL LIABILITY OF HOTELIERS
Chapter 3. Gaming and Wagering
§1. WAGERS AND BETS
§2. DISTINCTION FROM INSURANCE CONTRACTS
Chapter 4. Sale of Goods
§1. DELIVERY
§2. TRANSFER OF OWNERSHIP AND RISK
I. Ownership
II. Option to Repurchase
III. Passing of Risk
§3. THE SELLER’S LIABILITY FOR EVICTION AND LATENT DEFECTS
I. Sale by a Non-owner and Warranty Against Eviction
II. The Seller’s Liability for Defects and Warranty Against Latent Defects
§4. REMEDIES
§5. PRODUCT LIABILITY
§6. SALE ON INSTALMENTS
Chapter 5. Letting and Hiring of Work and Building Contracts
§1. DEFINITION
§2. LETTING AND HIRING OF WORK DISTINGUISHED
§3. BUILDING CONTRACTS
Chapter 6. Lease
§1. EVIDENCE
§2. FORMATION OF A CONTRACT OF LEASE
§3. DUTIES OF THE LESSOR
§4. DUTIES OF THE LESSEE
§5. ASSIGNMENT, CESSION, AND SUBLETTING
§6. DURATION OF A LEASE
§7. RENEWAL OF A LEASE
§8. NATURE OF THE LESSEE’S RIGHT
Chapter 7. Compromise
Chapter 8. Suretyship
§1. NATURE OF SURETYSHIP
§2. REQUIREMENTS FOR VALIDITY
§3. TERMINATION
§4. EFFECT OF SURETYSHIP BETWEEN THE CREDITOR AND THE SURETY
§5. EFFECT OF SURETYSHIP ON THE RELATIONSHIP BETWEEN THE DEBTOR AND THE SURETY
§6. EFFECT OF SURETYSHIP BETWEEN CO-SURETIES
Chapter 9. Pledge
§1. MEANINGS OF PLEDGE
§2. DEFINITION AND REQUIREMENTS OF A PLEDGE CONTRACT
§3. DUTIES OF THE PLEDGOR
§4. WHO MAY PLEDGE?
§5. TERMS OF A PLEDGE CONTRACT
§6. DUTIES OF THE PLEDGEE
§7. RIGHTS OF THE PLEDGEE
§8. TERMINATION OF A PLEDGE
Chapter 10. Loan
§1. LOAN FOR USE
§2. LOAN FOR CONSUMPTION
§3. LOAN ON INTEREST
Chapter 11. Contracts with the State
Chapter 12. Partnership
§1. DEFINITION
§2. REQUIREMENTS
§3. EFFECT
§4. TERMINATION
Chapter 13. Quasi-Contracts
§1. INTRODUCTION
§2. CONDICTIO CAUSA DATA CAUSA NON SECUTA
§3. CONDICTIO OB TURPEM VEL INIUSTAM CAUSAM
§4. CONDICTIO INDEBITI
§5. CONDICTIO SINE CAUSA SPECIALIS
§6. ACTION FOR IMPROVEMENTS
§7. CLAIM AGAINST A MINOR
§8. ALIENATION OF LAND: STATUTORY ENRICHMENT ACTION
§9. CLAIM FOR REDUCED PERFORMANCE
§10. NEGOTIORUM GESTIO
I. Negotiorum Gestio in General
II. Requirements
III. Duties of the Gestor
IV. Rights of the Gestor
V. Names and Nature of Actions
Selected Bibliography
Table of Cases
Index
Back Cover