• Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) at 532-4.

o Facts:

It is stated that “implied term” refers to a term implied by law. “Tacit term” makes reference to terms that are based on
the actual or imputed intentions of the parties.

o Corbett J states that an “implied term” is a standardised one, amounting to a rule of law, which the courts will
apply unless validly excluded by the contract itself. It originates in the contractual intention, but other factors such as
legal policy will also contribute to its creation.

o A tacit term, if found at all, is found in the unexpressed intentions of the parties. Courts do not readily import
tacit terms, it cannot contract for other people, nor can it supplement their agreements merely because it will be
reasonable to do so. For the courts to import a tacit term it must, in a reasonable and business-like manner, determine
whether, based on the express terms of the contract and the admissible circumstances, the parties intended to contract in
accordance with such a term.

o Didcott J refers to the case of Reigate v Union Manufacturing in stating that the test for the existence of a tacit
term is that of the “Bystander” test.

• Golden Cape Fruits (Pty) Ltd v Fotoplate (Pty) Ltd 1973 (2) SA 642 (C)

o Facts:

o Golden Cape Fruits is the appellant and Fotoplate the respondents

o Appellant had approached the respondent for the making of specific printing plates.

o It was believed that the respondent was clear on what they had to make for the appellant. However, the
respondent did not deliver that which the appellant had thought they had ordered. However, at the time of delivery the
appellants were not yet aware that the plates were not correct and proceeded to print their brochures according to the
defective plates. As a results, the brochures were not correct and as such, believe that they are entitled to sue the
respondents for breach of contract, or alternatively for negligence.

o Appellants sued the respondents in the magistrate’s court for R912 in damages on the basis of breach of
contract or alternatively on the basis of negligence. The magistrate’s court ordered absolution from the instance with
costs. Golden Cape Fruits (Appellants) appealed this order.

o The respondents’ defence was the existence of a “trade usage.” This trade usage was to the effect that the
respondents needed to send the appellants a “rough proof “ of the plates for approval, amendment or rejection. Upon the
appellant doing so, the respondent will proceed to make the actual plates in accordance with the now laid out
instructions and approval. As the respondents had done exactly this, they believed that it exempted them from liability.

o Thus, the main issue is to determine whether the trade usage exists and whether is applies in this case.

o Corbett J, then sets out the 7 elements that need to be shown for a trade usage to exist (stated in notes above).
He also states that the onus of proving the existence of a trade usage lies with the one alleging its existence…in this case
the respondent.

o Corbett J also states that the evidence of a trade usage shown should also be clear, convincing and consistent
and must also amount to more than mere opinion. The evidence should also show instances where the trade usage has
been acted upon.

o Judgement:
o Corbett J held that the respondent’s evidence was that of mere opinion and that there was no evidence of such a
trade usage having been acted upon and as such fell short in trying to prove the existence of the trade usage. As such, the
appeal succeeded with costs and overturned the court a quo’s finding.

• Wilkens v Voges 1994 (3) SA 130 (A)

o Wilkens (the receiver for creditors of stronghold) is appellant and Voges the respondent

o Facts:

o Stronghold purchased a portion of the farm “Vlakplaas” from Voges. Stronghold was in the business of
erecting Black townships and would have done this with the portion of land purchased

o Afterwards it became clear that there was a plan to build a Provincial Road through this portion of land, thus
meaning that the portion of land would be expropriated.

o Stronghold had already paid a sum of the purchase price but refused to pay the rest as a result of the above. The
seller, Voges sues them for the money owing. Stronghold sues voges for cancellation of the sale and repayment of the
money already paid.

o In court a quo the seller, voges is plaintiff and stronghold is defendant

o Stronghold, in its defense, relied on an alleged tacit term in the agreement

o Plaintiff and seller, Voges, denied the existence of the tacit term

o The court a quo judge stated that the defendant, stronghold, needed to prove the alleged tacit term and the
plaintiff’s breach thereof. After doing so, the judge found in favour of the defendant stronghold. The plaintiff appealed
to the full bench of the court a quo. The appeal was upheld and defendant was order to pay the outstanding sum plus the
costs of proceedings

o Wilkens (Stronghold) appealed.

o The most important issue here is the existence of the alleged tacit term

o The appeal judge, Nienaber J, stated that a tacit term can be actual or imputed. Actual tacit term is one where
both parties though of the term, but it is so obvious, that they did not bother to articulate it. Imputed tacit term is where
the parties would have assented (or articulated) to such a term if they had though about it, but they did not because they
overlooked a present fact or failed to anticipate a future one.

o A tacit term is a matter of inference and it must be a necessary inference.

o Nienaber J states that this inference can be drawn from the express terms and the admissible circumstances. He
also states that the onus to prove the existence of this tacit term rests on the party wanting to rely on the term. The test to
determine such a tacit terms is that of the bystander test.

o The appellants stated that the express terms of the contract had to be supplemented by terms and warranties
(which is the tacit term). They alleged that the tacit terms is to the effect that: the plaintiff warrants that no obstacle exits
which might reasonably delay interfere with or limit the establishment of the township on the land purchased or
alternatively, that the plaintiff knew of no such obstacle.

o Appellants stated that agents (the town planners) of the seller, voges were informed of the plans to build the
road and that voges must have been aware thereof and as such, it constituted a breach of the tacit term as it was an
impediment to the building of the township. The appellants held that it was an imputed tacit term, as it catered for
unforeseen circumstances.

o Judgment:
o Nienaber J held that he did not agree that the tacit term had been established and he held so for the following
reasons:

o The judge held that the agreement had placed no time constraint on the seller, voges, to comply with his
obligation (to have plans approved) but the tacit terms seeks to place such responsibility on him. Further, the judge held
that there was an inconsistency with the appellants approach. This is that, the appellants hold that the tacit terms is an
imputed one (they would have assented to it had they thought about it) but the appellants also held that the seller, voges
had known about the letter informing about the impediment (the road plans) and had wilfully withheld the info to allow
the agreement to take place. However, this fact would then serve to disprove the existence of the tacit term as the
plaintiff would not have bound himself to such a term had he known about the impediment, the judge held.

o The judge also held that a tacit term/warranty needed to be clear, simply formulated, not conflict with express
terms, needed to be a matter of necessary inference and must satisfy the requirement of business efficacy.

o The judge held in this case, the tacit terms was not necessary for business efficacy. What is more, in the initial
stages, such a terms was not contended nut rather misrepresentation, which means that even the people seeking to rely
on it did not know about it until a late stage which does not to prove its existence. Further, even the appellant had trouble
formulating the terms which shows that the alleged term is not simply formulated and clear. It further means that it
would be very difficult or impossible for both parties, without saying a word, could have implied such a complex tacit
term.

o The appeal was dismissed with costs.

• Elite Electrical Contractors v The Covered Wagon Restaurant 1973 (1) SA 195 (RA)

o Elite electrical is appellant and Covered Wagon restaurant is respondent

o Facts:

o Appellant sued respondent for sum of money in respect of work done and material supplied. It was common
cause that the parties had not agreed on a fixed price

o The respondent, the restaurant, wanted to move certain electrical appliances in the kitchen. This involved
removing and installing new electrical outlets

o Appellant, his son and another worksman had done the job. The parties agreed that the work would be done
despite not agreeing on a fixed price.

o Appellant relied on an implied (tacit term) term to the effect that he would be paid a fair and reasonable price

o The court stated that the onus was on the appellant to prove why he had asked the rate he did and why it was
fair and reasonable

o The court a quo found in favour of the appellant, but not in the amount he wanted.

o He appealed. The appeal was dismissed

o Nevertheless, it was held that the tacit terms was in existence and therefore the appellant had won his case ito
being paid, but not in the amount he wished.
• Park 2000 Development (Pty) Ltd v Page [2011] SASCA 208

o Facts:

o Park 2000 development (appellants) sold land to Mr Page (respondent) with a suspensive condition. The
suspensive condition held that the sale would only occur if Mr Page obtained a bond for 80% of the sale amount within 7
days of concluding the agreement. If not, the sellers, the appellant, would have the right to cancel the lease or not.

o Mr Page did not secure the bond but paid the deposit amount. Mr page states that the appellants chose not to
cancel the agreement but affirm it. However, the appellants state that, as the suspensive condition was not fulfilled, the
agreement had lapsed.

o The court a quo held that, because the appellants had a choice to cancel or not, the agreement did not
automatically lapse and they could therefore not cancel the agreement.

o The appellants appeal the decision

o The appellants continued to hold that the agreement held a suspensive condition (that of the bond) and upon
said condition not being fulfilled, the agreement would lapse. The respondent, Mr Page, believes that he had waived this
condition and made the contract unconditional.

o The appeal judge agreed that if the term is a suspensive condition, that the agreement would lapse upon non-
fulfillment. The judge states that, it is the right of the purchaser (in this case the respondent) to waive the suspensive
condition, as this condition is for the sole benefit of the purchaser (for without it, he could be saddled with the property
even if he had not secured a bond and could therefore become liable to other damages). However, the purchaser must do
so on or before the expiration of the suspensive condition. If not, the agreement will lapse upon non-fulfillment of the
suspensive agreement.

o Judgment:

o The judge held that the term was indeed a suspensive condition and that Mr Page had not waived the condition.
Therefore, the agreement lapsed upon the non-fulfillment of the suspensive condition (the bond)

o Appeal is upheld with costs

• Scott v Poupard 1971 (2) SA 373 (A)

o This case defines doctrine of fictional fulfillment

o Scott (first appellant), Du Preez (second rappellant). Poupard (first respondent), Lobel (second respondent)

o Poupard was granted a grant from Mauritian Government to allow him to prospect for minerals “in or under
any land of the Colony of Mauritius or its dependencies.” The grant was allocated on the condition, that within 6 months
Poupard would enter an agreement with a competent person, company, partnership or syndicate for carrying out the
prospecting.” The agreement would later also include a grant for mining

o Pouoard entered a partnership with Lobel to find people or company to carry out the prospecting. Partnership
held that they would share equally in the selling of the prospecting and mining rights

o Poupard entered into a contract with Scott and Du Preez, who would form a company. The contract with
Poupard gave them the right to prospect for minerals. Later, when the mining grant would be given to the company by
the Mauritian govt, shares had to be transferred to Poupard and Lobel.

o However, the company was never formed and Scott and Du Preez withdrew from the agreement. Poupard and
Lobel sued the appellants (for R170 000 each and the value of the shares) for failing to perform under the contract
and/or a deliberate frustration of the fulfillment of the conditions that would see them being paid and having shares
transferred to them.
o The court a quo granted the respondents the R170 000 but not the value of the shares (this claim was dismissed
for lack of evidence of the value of said shares). Scott and Du Preez appeal and the respondents cross appeal the
dismissal of their share claim

o The case deals with the doctrine Fictional fulfillment.

o Judgment:

o It was held that, Scott and Du Preez’s failure to form the company and continue the negotiations with the
Mauritian Govt did render them liable under the doctrine of fictional fulfillment as this did frustrate the process in which
the govt would have passed necessary legislation for the mining rights. As such, the court a quo’s finding is ito the R170
000 is upheld.

o The appeal is dismissed with costs

o Cross appeal also dismissed

• Lekup Prop Co No 4 (Pty) Ltd v Wright 2012 (5) SA 246 (SCA)

o Case deals with which state of mind a party must have had for the doctrine of fictional fulfilment to be applied
and with suspensive conditions

o Facts:

o Lekup is appellant and Wright is respondent

o Lekup sells portion of land to Wright which is not yet subdivided. Sale agreements states that purchaser knows
land is not yet sub-divided and that sale is conditioned upon formal approval of sub-division and registration thereof on
specific date (suspensive condition). If suspensive condition not fulfilled, the sale will be cancelled.

o Appellants instituted proceedings whishing to declare that the agreement had indeed lapsed. Respondent
pleaded that appellants intentionally did not fulfil conditions that caused agreement to lapse (giving way to doctrine of
fictional fulfilment). Sought order declaring it not lapsed and force appellants to fulfil conditions

o The court a quo found in favour of the respondent and stated that the agreement had not lapsed.

o Appellants appealed the decision

o The doctrine of fictional fulfilment will not be applied if there is a lack of dolus (intention / deliberately
frustrating fulfilment of suspensive condition)

o The doctrine is concerned with intention, not motive

o Frustration must be intentional, negligence does not suffice

o The respondent bore the onus to prove that appellants deliberately did not fulfil the suspensive condition

o Court a quo found in respondents favour on basis that appellants unreasonably refused a further extension and
because they had not made an application for subdivision before that time

o Appeal judge stated that first judge overlooked an NB point. Onus was on respondent to prove that appellants
frustrated the process deliberately

o Judgment:

o The judge also held that the appellants were under no obligation to grant extensions. He believes that by them
extending the period of the suspensive condition twice before shows that they did not intentionally or deliberately
frustrated the fulfilment of the suspensive condition
o The judge stated that the respondent failed to discharge the onus on him of proving dolus (intention) on the part
of the appellant.

o Therefore, the doctrine of fictional fulfilment is not applicable in this case

o Appeal succeeds with costs

• Schmidt v Dwyer 1959 (3) SA 896 (C)

o The case deals with whether a specific statement constitutes a warranty or not

o Facts:

o Plaintiff buys land from defendant. Defendant “warranted” that there were x amount of vines on the land, but
there were substantially less.

o Plaintiff states that defendant’s statements RE the vines constitutes a warranty and defendant denies that it was
a warranty

o “The general rule is that where a vendor makes a representation or an assertion of a positive and material fact to
the quality or quantity of the thing sold such conduct on his part amounts to a definite promise or warranty, in breach of
which he will be held liable”

o Judgment:

o It was held that the representation of the amount of vines was very important in determining the purchase price.
More so, the fact that a special clause was inserted to state that no representation was made as to the size of the land, but
not RE the representation about the vines. As such, the statement from defendant that the land has x amount of vines
does constitute a warranty.

• Minister van Landbou-Techniese Dienste v Scholtz 1971 (3) SA 188 (A) (Headnote ONLY)

o Minister if appellant and Scholtz is respondent

o Facts:

o Appellant had purchased a bull, for stud purposes from a breeder – Scholtz

o Later, it became clear that the bull was not fertile. Appellant wanted to cancel oral agreement of sale and
wanted to be repaid the amount already paid. They alleged that there was an implied tacit term that the Bull would be
fertile

o Respondent Scholtz did not challenge the existence of the implied tacit term, but challenged the fact that the
bull was not fertile.

o Court a quo found in favour of respondent under the action redhibtoria (latent defect) as it stated that claim had
prescribed.

o On appeal, judge found that there was a valid tacit term. As such finding of court a quo was set aside
• Johnston v Leal 1980 (3) SA 927 (A) at 943

o Pg 943:

o It is stated that the purpose of the integration rule is to prevent a party from contradicting, adding or modifying
the contract by reference to extrinsic evidence and through that to redefine the contract.

o The party wanting to rely on extrinsic value usually wants to rely on the contract in the redefined form

o the integration rule prevents a party from altering, by the production of extrinsic evidence, the recorded terms
of an integrated contract in order to rely upon the contract as altered

• Union Government v Vainini Ferro-Concrete Pipes (Pty) Ltd 1941 AD 43 at 47

o Para 47:

o When a contract is reduced to writing, the writing is in general regarded as the exclusive memorial of the of the
transaction and in a suit between the parties, no evidence to prove its terms may be given save the document or
secondary evidence of its contents, nor may the contents of such a document be contradicted, altered, added to or varied
by parol evidence

o The judge held that this rule has always been regarded as a rule of evidence in South Africa.

• University of Johannesburg v Auckland Park Theological Seminary 2021 (6) SA 1 (CC) (paras 87-92)

o Paras 87-92:

o In KPMG and Swanepoel, the Supreme Court of Appeal held that the parol evidence rule remains part of our
law, and is one of the caveats to the principle that extrinsic contextual evidence may be admitted

o The court stated that the rule was most aptly put in the case of Vianini Ferro-Concrete Pipes: “When a contract
is reduced to writing, the writing is in general regarded as the exclusive memorial of the of the transaction and in a suit
between the parties, no evidence to prove its terms may be given save the document or secondary evidence of its
contents, nor may the contents of such a document be contradicted, altered, added to or varied by parol evidence”

o The court cites Corbett JA in the Johnston case: “as has been indicated, the parol evidence rule is not a single
rule. It in fact branches into two independent rules or sets of rules: (1) the integration rule . . . which defines the limits of
the contract, and (2) the [interpretation] rule, or set of rules, which determines when and to what extent extrinsic
evidence may be adduced to explain or affect the meaning of the words contained in a written contract.”

o As such, the parol evidence rule has both an integration aspect and an interpretation aspect. Corbett JA
describes the latter as: “in many instances recourse to evidence of an earlier or contemporaneous oral agreement would,
in any event, be precluded by . . . that branch of the rule which prescribes that, subject to certain qualifications, when a
contract has been reduced to writing, the writing is regarded as the exclusive embodiment or memorial of the transaction
and no extrinsic evidence may be given of other utterances or jural acts by the parties which would have the effect of
contradicting, altering, adding to or varying the written contract. The extrinsic evidence is excluded because it relates to
matters which, by reason of the reduction of the contract to writing and its integration in a single memorial, have become
legally immaterial or irrelevant”

o The parol evidence rule is applicable when the court is faced with a situation where there is an attempted
amendment of the contract.

• Capitec Bank Holdings Ltd v Coral Lagoon Investments 194 (Pty) Ltd 2022 (1) SA 100 (SCA) (paras 41-47)

o Paras 41-47:
o Is the meaning of a contract to be understood on the basis of the subjective intentions of the parties to the
contract or the objective manifestations of their consensus? The rationale of the parol evidence rule is based on the value
of objectivism. Parties enter into written contracts that include clauses affirming the writing to be the exclusive
memorial of the parties' agreement so as to permit certainty as to the agreement, and avoid making every agreement the
starting point of an evidential battle

o The opposing position, powerfully articulated by Corbin, 11 is this. The parol evidence rule simply reflects the
agreement between the parties that the written document constitutes their exclusive agreement. It supersedes earlier
agreements, whether written or oral, and excludes evidence of such agreements. The parol evidence rule is not a rule as
to the admission of evidence for the purpose of interpreting the meaning of the written agreement that constitutes the
parties' exclusive agreement. If the plain meaning of a contract is rejected conceptually or enjoys no primacy in the
interpretative exercise, then extrinsic evidence as to meaning will enjoy a very considerable remit, and the parol
evidence rule's exclusionary force will be greatly reduced.

o There is logical force in the observation that the identification of a contract is one thing, its meaning another.
However, the practical consequence of this distinction is that the evidence excluded under the parol evidence rule as
contradicting, adding to or varying the written contract is then admitted for the purpose of interpreting the contract. This
has led some courts to seek a via media. Under this formulation, extrinsic evidence will only be admitted if the contract
is reasonably susceptible of the meaning for which the evidence is tendered or amounts to objective evidence to show
ambiguity.

o The Constitutional Court has placed our law firmly within the realm defined by Corbin's position. The
Constitutional Court has rejected the idea of the plain meaning of the text or its primacy, since words without context
mean nothing, and context is everything. It has given a wide remit to the admission of extrinsic evidence as to context
and purpose so as to interpret the meaning of a contract. Reasonable disagreements as to the relevance of such evidence
should favour admitting the evidence and the weight of the evidence may then be considered.

o I offer a few observations, as to the implications of what the Constitutional Court has decided in University of
Johannesburg. First, it is inevitable that extrinsic evidence that one litigant contends as having the effect of
contradicting, altering or adding to the written contract, the other litigant will characterise as extrinsic evidence relevant
to the context or purpose of the written contract. Since the interpretative exercise affords the meaning yielded by text no
priority and requires no ambiguity as to the meaning of the text to admit extrinsic evidence, the parol evidence rule is
likely to become a residual rule that does little more than identify the written agreement, the meaning of which must be
determined. That is so for an important reason. It is only possible to determine whether extrinsic evidence is
contradicting, altering or adding to a written contract once the court has determined the meaning of that contract. Since
meaning is ascertained by recourse to a wide-ranging engagement with the triad of text, context and purpose, extrinsic
evidence may be admitted as relevant to context and purpose. It is this enquiry into relevance that will determine the
admissibility of the evidence. Once this has taken place, the exclusionary force of the parol evidence rule is consigned to
a rather residual role.
• Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA para 18

o Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some
other statutory instrument or contract, having regard to the context provided by reading the particular provision or
provisions in light of the document as a whole and the circumstances attendant upon its coming into existence.

o Regardless of the nature of the document, the words used must with regards to the ordinary rules of grammar
and syntax, be considered, the context in which the provisions appear, the apparent purpose to which it is directed and
the material known to those responsible for its production.

o Where more than one meaning is possible, both must be weighed up against the above factors and the clearest
one must be chosen. The process is objective, not subjective.

o The most sensible meaning is preferred as apposed to one that is not sensible and does not lead to business like
results or which undermines the apparent purpose of the document

o Judges must not substitute the words actually used for ones that make more sense (according to them) – to do
this would be contracting on their behalf

o Inevitable point of departure is the language of the provision, read with its context, having regard for its
purpose and the background to the preparation of the document.

o Text, context, purpose, factual matrix

• Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd 2016 (1) SA 518 (SCA) paras 27-31

o The interpretive process is not only taking into account the objective meaning of the words and to not consider
the context. The process is however to ascertain the intention of the parties at the time they entered into the agreement.

o Parol evidence is inadmissible to modify, vary or add to the written terms of the agreement. It is the role of the
courts, and not witnesses, to interpret.

o No difference between background circumstances and surrounding circumstances. Judges must always consider
the context to ascertain the parties’ intention.

o Words without context mean nothing.

o Interpretation is a unitary exercise – not done in stages. (cited from judgment of Wallis)

o Interpretation of commercial documents – interpretation that makes sense commercially is preferred

• The City of Tshwane Metropolitan Municipality v Blair Atholl Homeowners Association 2019 (3) SA 398
(SCA) paras 55-71

o The judge starts off to discuss whether we follow a subjective or an objective approach to the interpretation of
contracts. He comes to the conclusion that we use an objective method. He refers to the Endumeni judgment in stating
that the words must not be considered in isolation, but that the context must also be considered. He also goes on to
affirm that the interpretive process is a unitary one.

o Affirms once more that the point of departure (starting point) is the language (words) used, for without there
would be no interpretive exercise.

o The judge cites the KPMG case (given by Harmse J) and cites a passage which affirms that the parol evidence
rule is still part of our law, that it is seldomly applied by trial courts (which is a disgrace), that the interpretive process is
for the courts and not for witnesses and that there is no distinction between background circumstances and surrounding
circumstances. This case (KPMG), which is cited by the judge also holds that extrinsic evidence may only be used to set
parameters of the interpretive process, but this evidence must be used as conservatively as possible and confined solely
to set the parameters.

• Capitec Bank Holdings Ltd v Coral Lagoon Investments 194 (Pty) Ltd 2022 (1) SA 100 (SCA) paras 25 and
50-51

o The judge cites Endumeni in stating that it guides how the interpretive process is to be undertaken

o It goes: It is the language used, understood in the context in which it is used, and having regard to the purpose
of the provision that constitutes the unitary exercise of interpretation. I would only add that the triad of text, context and
purpose should not be used in a mechanical fashion. It is the relationship between the words used, the concepts
expressed by those words and the place of the contested provision within the scheme of the agreement as a whole that
constitute the enterprise by recourse to which a coherent and salient interpretation is determined.

o He also cites Endumeni in affirming that the point of departure (starting point) is the language used itself.

o Context and purpose may be used to elucidate the context.

• University of Johannesburg v Auckland Park Theological Seminary 2021 (6) SA 1 (CC) para 64-69

o Cites para 18 of Endumeni (see above)

o Affirms that interpretive process is a unitary one. To be approached holistically: simultaneously considering the
text, context and purpose.

o Endumeni set position straight. Previous position held that context only looked at if words were ambiguous.
Endumeni held that context and purpose needed to be looked at always! Court also needs to consider factual matrix
always

o Extrinsic evidence may be used to contextualise the document – it must be used as conservatively as possible
• Weinberg v Olivier 1943 AD 181

o Facts:

o The plaintiff entered into a verbal agreement with the defendant, where the plaintiff gained garage space for his
car and the defendant undertook to dust the car every evening and to polish it once a month

o Plaintiff lived close to the garage. Instead of dropping it off there, he got into the habit of driving there, picking
up an employee of the garage, driving home and the let the employee drive the car back to the garage for the night.

o Inside the garage, there were big letters painted on the wall which read “cars garaged at own risk.”

o One evening, the employee took the car back to his house and upon returning to the garage, he had crashed and
damaged the car.

o The plaintiff sued the defendant for the damaged car. The plaintiff contends that the defendant “undertook” to
keep the car safe. However, the defendant holds that the above statement exempted him from liability as the risk was the
owner’s.

o The judge found that there was an implied term to keep the car safe, but also that the statement did exempt the
defendant from liability.

o The plaintiff appealed and won. The defendant in turn appealed

o The defendant held that there was no implied obligation on him to safeguard the car and even if there was, the
exemption clause absolved him from any liability, that he was not liable for the actions of his employee and that the
plaintiff failed to actually prove that he is the owner of the car.

o The judge goes on to state that he does not agree that there is no contract between the parties. He finds that
there is a contract between them and as such there did rest an obligation on the defendant to look after the car. This
obligation could be delegated to a servant and as such, due to the facts of this case, because the Obligation was delegated
to the servant, the defendant is liable for the actions of his servant, unless the exemption proves valid

o The judge interpreted the clause “cars garaged at owner’s risk” to mean that the plaintiff agreed to take any risk
that could occur as a result of the car being parked at the garage upon himself, but not if the defendant acted in breach of
that agreement and removed the car from the garage. As such, the plaintiff takes the risk of damage occurring due to
normal activities carried out at the garage, not if the car is removed from there.

o The judge cites an older case in which it was determined that if one contracts do to something in a certain way,
or to keep something at a certain place and you then break that agreement, you cannot rely on conditions meant to
protect you had you carried out the contract as was agreed.

o Held:

o As such, the judge held that the defendant was liable and could not rely on the exemption in this case.

• Drifter’s Adventure Tours v Hircock 2007 (2) SA 83 (SCA)

o Facts:

o Drifters is an adventure tours company.

o The respondent (plaintiff in court a quo) was injured due to an accident caused by an employee of Drifters
while driving a company bus.

o The appellant (Drifters) denies liability due to an indemnity form that was signed prior to the commencement
of the tour

o The question is: whether the indemnity is enforceable to exempt Drifters from liability for its employee’s
negligence.
o The judge in the court a quo, interpreted the contract in such a way that the result was that Drifters was not
exempt from liability caused by the negligence of their employees.

o Drifters appealed on 2 grounds: A) As a matter of linguistic interpretation, the conditions clause does not cut
down the indemnity clause in the manner contended for by the Court a quo. B) In interpreting the clause, by applying
the contra proferentem rule, in circumstances where the clause was not ambiguous; alternatively, if the clause is
ambiguous, the Court a quo incorrectly applied the principles underlying the contra proferentem rule in exclusion-
¬clause cases to reach the conclusion that the indemnity clause did not protect the appellant from its employee's
negligence.

o The appellant (Drifters) bears the onus of proving on a balance of probabilities that the indemnity is
enforceable against the respondent. The judge also states that it is common cause that indemnity clauses should be
interpreted restrictively. This was stated by another judge in a different case: “'The correct approach is well established.
If the language of a disclaimer or exemption clause is such that it exempts the proferens from liability in express and
unambiguous terms, effect must be given to that meaning. If there is ambiguity the language must be construed against
the proferens. (See Government of the Republic of South Africa v Fibre Spinners & Weavers (Pty) Ltd1978 (2) SA 794
(A) at 804C.) But the alternative meaning upon which reliance is placed to demonstrate the ambiguity must be one to
which the language is fairly susceptible; it must not be ''fanciful'' or ''remote''

o In case of doubt, an exemption clause reasonably capable of bearing more than one meaning is given the
interpretation least favourable to the proferens

o Held:

o In this case, the judge held that the word “driving” in the indemnity, in this case was ambiguous because it
could mean the extreme driving of the adventure or normal driving on a public road. But due to the rules above
mentioned, it needed to be interpreted to mean the former and as a result, in this case, the negligent driving of the
employee did not fall under the exemption.

o The appeal was dismissed with costs

• Swinburne v Newbee Investments (Pty) Ltd 2010 (5) SA 296 (KZD)

o Facts:

o Swinburne concludes a lease agreement with Newbee. Swinburne falls and gets injured while climbing small
flight of stairs at the building. He states that he fell due the the negligence of Newbee (not putting in handrails). Newbee
relies on 2 clauses in the contract in denying liability

o Swinburne says that if the clauses deny him the right to claim, it is against public policy

o The main question first is, whether Newbee owed a duty to Mr Swinburne and the other residents and then if
that is answered affirmatively, the question becomes if they acted negligently in not erecting a handrail on the stairs.

o The general legal position is that no one is under a duty to prevent harm to another. However, such a duty may
arise in particular circumstances.

o The test to determine the existence of such a legal duty is stated as: “Our common-law employs the element of
wrongfulness (in addition to the requirements of fault, causation and harm) to determine liability for delictual damages
caused by an omission. The appropriate test for determining wrongfulness has been settled in a long line of decisions of
this Court. An omission is wrongful if the defendant is under a legal duty to act positively to prevent
the harm suffered by the plaintiff. The test is one of reasonableness. A defendant is under a legal duty to act positively to
prevent harm to the plaintiff if it is reasonable to expect of the defendant to have taken positive measures to prevent the
harm. The Court determines whether it is reasonable to have expected of the defendant to have done so by making a
value judgment based, inter alia, upon its perception of the legal convictions of the community and on considerations of
policy. The question whether a legal duty exists in a particular case is thus a conclusion of law depending upon a
consideration of the circumstances of the case and on the interplay of the many factors which have to be considered.”
o Deciding the existence of a legal duty is an intuitive reaction to a bunch of arbitrary factors, but rather a
weighing of each against each other.

o It is common cause that owners have a legal duty to ensure that there are not any hazards on a property that
could injure others. The courts have in some instances imposed this in regards to stairs. The judge cites 2 cases
confirming that, an owner does have a legal duty to ensure that staircases on their property are not dangerous to use

o Thus, with regards to the first question, the judge held that Newbee did owe Swinburne a legal duty to ensure
the stairs was safe.

o With regards to the second question, that of negligence, the test here is that of diligens paterfamilias – who
would forsee the possibility of his conduct leading to the injury of others, and would take reasonable steps to guard
against such injuries

o The judge also believed that in this case, any reasonable person would have thought to put up a handrail along
the stairs and it would not have been expensive to do so

o Newbee agued that the residents were not obliged to use the specific stairs and that whether that evening was so
that Swinburne should have known not to use the stairs.

o The judge did not agree with Newbee’s first contention. \

o With regards to the second contention, Newbee relied on a quote from an older case which stated that an owner
is exempted from liability provided there are no hidden dangers.

o The judge did not agree with Newbee as he held that Swinburne managed to negotiate the stairs in the morning
and that he had not acted negligently. Accordingly, the judge held that Swinburne’s fall was due to negligence on
Newbee’s part.

o Newbee also relied on an exemption clause in the lease which exempted them from liability due to any
negligence.

o The stance on the interpretation of indemnity clauses are set out in another case: “ 'The correct approach is
well-established. If the language of a disclaimer or exemption clause is such that it exempts the proferens from liability
in express and unambiguous terms, effect must be given to that meaning. If there is ambiguity the language must be
construed against the proferens . . . . But the alternative meaning upon which reliance is placed to demonstrate the
ambiguity must be one to which the language is H fairly susceptible; it must not be "fanciful" or "remote".'

o The proferens is the party in whose favour the clause works (this case =newbee)

o Held:

o The judge interpreted the clause which Newbee tried to rely on, using the rule above mentioned and came to the
conclusion that it could not include an exemption from liability caused by injury to person due to negligence. The clause
was to ambiguous and therefore, according to the above rule, needed to work against Newbee.

o As a result, the judge found that Newbee was liable for the damages suffered by Swinburne as a result of their
negligence.

• Datacolor International (Pty)Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA)

o Repudiation has 2 parts – the first is where the one party, either by words or conduct, indicates that they no
longer wish to be bound by the contract and the second part is where the other party either accepts the repudiation and
can then either sue for damages iro earlier breaches or damages due to the breach, or he can choose to also refrain from
performing under the contract further.
o The repudiation is however a breach in itself, the intention is simply a description of conduct which either
heralds non- or malperformance by the repudiator. The “acceptance” of the breach does not complete the breach
(because the repudiation is in itself the breach), it is merely the aggrieved party exercising his right

o This case deals with both parts of repudiation – did the appellant improperly repudiate the contract? If so, did
the respondent properly cancel the agreement?

o Shows how the wrong perception of the true nature of repudiation can lead to false conclusions

o In 1987, the two companies concluded a distributorship agreement. Appellant(plaintiff), Datacolor (UK
company)(Instrumental color systems) appointed the respondent (SA, Sandton) as their exclusive distributor for the sale
of computerised equipment. Per the agreement, the plaintiff could resell the defendant’s products in other parts of
Southern Africa and Mauritius.

o The agreement worked well until in 1991, ICS (Datacolor) was bought by a Swiss group (Eichoff group). This
group later also took over another business that competed with the respondent in Southern Africa. They then wanted to
restructure their interests in SA and needed to choose a distributor.

o Director of respondent went to meet Datacolor to put forward his case. However, respondent was later informed
they would no longer be the distributors and would receive official confirmation later.(early June)

o Respondent received 2 telefaxes to this effect (late June). The appeal is concerned with the impression created
by these

o These letter made no mention of clause 16 of their agreement. Clause 16 specifically deals with the terms of
termination of the agreement.

o The respondent did not immediately respond to the letters. Instead they sent out a agency announcement
declaring that they had cancelled the agreement with Datacolor and were entering into a new agreement with one of
Datacolors competitors in the UK.

o The plaintiff got hold of this letter and as a result ceased their stockflow to the respondent. They sent a letter to
respondent stating that as the respondent was in business with a competitor, they had acted contrary to Clause 16 and as
a result repudiated the agreement. This was followed up with a letter from the plaintiff’s attorney to the same effect.

o The respondent’s attorney replied and stated that it was actually Datacolor who unlawfully repudiated the
agreement as they did not terminate the agreement as per clause 16 and as such the respondent had accepted the
repudiation and cancelled the agreement.

o Datacolor sued Intamarket for damages and Intamarket countersued for damages exceeding Datacolor’s.

o The court a quo found in favour of Datacolor, stating that the letters did not indicate that they would not have
still complied with their obligations and as a result did not repudiate the agreement. As such, the defendant could not
accept the repudiation and accordingly breached the agreement themselves. The defendant appealed to full bench and
the appeal was upheld. Datacolor then appealed to SCA.

o SCA:

o Did the plaintiff repudiate the agreement with its letters?

o “Where one party without lawful grounds indicates to the other party by words or conduct, a deliberate and
unequivocal intention to longer be bound by the agreement, he is said to repudiate the contract” - where this happens, the
other party may choose to accept the repudiation and rescind the agreement. The agreement comes to an end upon the
communication of the party’s acceptance of the repudiation and rescinding o the agreement to the repudiator.

o The judge states that the test is not subjective, but objective. He cites a case which states that even if one’ bona
fide intention was not to repudiate the agreement, but one’s actions causes that impression, repudiation takes place.

o The emphasis is not on the repudiator’s state of mind, what he subjectively intended, but rather on the, but on
what the innocent party would think the repudiator is intending
o Repudiation is a matter not of intention, but perception. The perception is that a reasonable person in the
position of the aggrieved party

o The test is whether a reasonable person would conclude that proper performance is not forthcoming – the
inferred intention serves as the criterion for determining the nature of the threatened actual breach

o Whether the innocent party is entitled to resile from the agreement depends on the nature and degree of the
impending non – or malperformance

o The alleged repudiation must be clear and unequivocal and must not be lightly assumed

o The judge states that as the vantage point to be taken is from that of the defendant, the evidence of the appellant
RE their intentions with the letters is irrelevant, but the perception it created within the defendant is not. But the
defendant’s perception is not conclusive, as the judge must superimpose what he believes a reasonable person’s
perception would have been under the circumstances – the judge must use all the background circumstances and
material that would have weighed with the innocent party

o This includes (most importantly) the letters. Upon assessing what the reasonable person would have thought
that Datacolor was intending, the judge held that a reasonable person would have perceived it as an immediate
termination (not complying with clause 16) and thus a wrongful repudiation. This justifies the cancellation of the
agreement by the defendant

o Did the defendant properly cancel the agreement:

o Innocent party can cancel agreement by words or conduct that shows a clear election to do so and is
communicated to the other party (repudiator)

o The judge held that the agency announcement qualified as a proper cancellation of the agreement.

o The appeal was dismissed with costs.

• Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd 1977 (3) SA 670 (A)

o Appellants carries on business as manufacturers and sellers of bricks – the respondents carry on business as
building and engineering contractors

o The respondent sued appellant for damages arising out of the purchase of bricks from the appellant and the
appellant counterclaimed for the outstanding amount that was due.

o The court a quo found in favour of respondents – the appellants appealed the decision that they were liable to
the respondents for damages and appealed their counterclaim being dismissed

o The issue that lead to the dispute is: The respondent bought bricks from appellant for a building job that they
had to do. They started to build the building and took holiday over December. Upon returning in January, the respondent
noticed that the building was falling, examined the bricks and concluded that the bricks were defective. Respondent had
to knock down the building, buy new bricks from new supplier and start building again. This resulted in large damages
to the respondent

o The respondent based their case on the legal foundation that a merchant who sells good of his own manufacture
or good to which he publicly professes to have attributes of skill and expert knowledge is liable for the purchaser of
consequential damages caused to the latter by reason of any latent defect – Ignorance of the defect does not excuse the
seller

o If seller falls into one of these categories he is presumed to be liable unless he specifically contracted out of this
presumption (excluded the presumption expressly)

o The judge held that the appellants fell into this category – thus what needed to be determined is if they sold
latently defective bricks
o Various test were done on the bricks to determine exactly what was wrong with them

o The judge, in accordance with all the evidence from experts and the tests done, found that the bricks did hold a
latent defect

o Some of the defences that the appellant raised to being liable for the damages were that: A) that it was not
necessary to demolish the brickworks and other less costly measures could have sufficed, B)It was not necessary to
demolish the internal walls, C)that the demolition of the walls was not a natural or foreseeable consequence of the sale
of bricks

o The parties agreed that the basis of the case (from the presumption above in bold) was based in Breach of
contract

o The judge held that in cases of breach of contract, the rule as to an award for damages is that the sufferer should
be placed in the position he would have been in, had the contract been executed properly – as far as this can be done by
paying an amount of money and without undue hardship to the other party

o To ensure that undue hardship does not befall the defaulting party, the suffer must take reasonable steps to
mitigate their loss or damage

o The defaulting party’s liability is limited to A) those damages that flow naturally and generally from the type of
breach, B) those damages, that although caused by the breach, and is regarded by law to be too remote, unless the parties
agreed upon those.

o (A) is known as general or intrinsic damages, (B) is special or extrinsic damages

o The judge held that this case concerned (A) general damages

o The judge then also held that there was no other reasonable way in which the respondent could have mitigated
the loss and therefore held that they acted reasonably in demolishing the walls

o Judgement:

o The judge found that the appellants had breached the agreement and as a result was liable to the respondent

o Appeal was dismissed

• Loureiro v Imvula Quality Protection (Pty) Ltd 2014 (3) SA 394 (CC)

 What is of great importance in this case is that the case confirms that where ordinary breach is concerned, fault
does not need to present for a breach to have taken place

o After being robbed at gunpoint in their previous home, the appellant moved himself and his family to a new
house. At the new house, he had various safety upgrades installed such as electric fencing, gates, CCTV and a
guardhouse

o He contracted Imvula, the respondents, in an oral agreement to provide 24 hour armed guard services at his
house

o Shortly after Imvula started their business there, the guard on duty let the applicant’s brother in law onto the
premises without his permission – after this the applicant had the intercom system partially disabled which meant that
the guards would have to call the main house to let anyone onto the premises – this also affected how the guards would
change as according to their shifts. To remedy this, the applicant provided the guards with a key for the pedestrian gate.
He however told them that the key and pedestrian gate is only to be used for the changing shift guards and that the key
may not be used for anyone without prior authorization – the applicant held that this amended the oral agreement
between him and the respondent

o Months later, the security guard on duty, who had no knowledge of the rule to not let anyone onto the premises
or to let anyone use the pedestrian gate without prior authorization, opened the pedestrian gate for people who seemed to
be the police. The guard was tied up along with the other household staff and the applicant’s children. When the
applicant and his wife returned later the evening from a function, the wife was also tied up and the applicant was forced
to open up the safe – R11mil worth of assets were stolen

o The applicants bring the case on the grounds that the respondents breached the contract

o The HC held that the case turned on negligence – HC held that the guard was negligent and therefore there was
a breach and respondents were thus guilty of breach of contract

o SCA found that guard was not negligent and upheld Imvula’s appeal = no breach of contract

o Leave to appeal to CC was granted:

o The CC held that in order to determine whether the respondents were liable to the applicant, three issues needed
to be decided: 1) whether the applicants’ express prohibition against opening the pedestrian gate without authorisation
amended the contract, 2) whether this prohibition imposes strict liability or if it includes a reasonableness qualifier, 3)
whether the contract was breached

o Judgment:

o (1) – The CC held that because the applicant had expressly stated that no one was to use the pedestrian gate
except the guards when changing shift and because Imvula accepted this, it meant that the prohibition did amend the
contract. The CC held that contractual obligations arise from parties intention. The applicants’s intention was for no one
to gain entry to the house without permission – thus, the prohibition does not require fault for breach

 (2) – para 42: The law of contract does not require fault for breach. The parties expressly agreed to a strict
liability prohibition – the express prohibition cannot be said to include a reasonableness provisio tacitly or otherwise.
The judge also held that it is telling that all the other clauses contained a reasonableness standard, but the express
prohibition did not – thus, the prohibition is not qualified by a reasonableness standard

o (3) – The clauses that impose a reasonableness standard, impose a positive obligation on the guards to take
positive steps to secure the premises. The prohibition imposes a negative obligation, not letting anyone in without
authorisation. The CC held that it is normal to use a reasonableness standard for positive obligations and to not use it for
negative obligations. The prohibition did not allow the guards to open for anyone without authorisation. The guard
opened without authorisation and thus breached the contract – whether he was negligent is irrelevant – respondents are
liable for breach of contract

o Thus, the respondents were guilty of breaching the contract

• Tucker’s Land and Development Corporation v Hovis 1980 (1) SA 645 (A)

o The respondent bought two erven from the appellant in a proposed township

o The contract was stipulated to be suspensive and subject to due proclamation of the township. The respondents
had to make certain payments in the mean time

o After some time, the respondents became aware that the plans for the township had changed and that
accordingly, their lot had been moved – they wanted their money back and sued for it. Court a quo found in their favour.
Appellant appealed the decision

o The issue involves the doctrine of anticipatory breach

o The judge cites various old authorities to the effect that the courts have a wide power to read in any term to a
contract if justice required it.

o The judge also states that there is a duty on a promisor not to commit an anticipatory breach of contract and
such a duty has in fact often been enforced by our courts (bona fides)
o The judge holds that an anticipatory breach is constituted by a violation of an obligation ex lege flowing from
the requirement of bona fides which underlie our law of contract

o The judge goes on to hold that the obligation not to commit an anticipatory breach is violated by repudiation

o Repudiation is a well known form of anticipatory breach

o The question then became whether the appellant repudiated its agreement with the defendants – it is accepted
that a person may do so by conduct

o The real question was whether, by changing the plans of the township and thereby removing the defendants lot
from its previous location, it had repudiated the agreement

o The judge cites authority that states: repudiation can be made by either words or conduct provided it is clearly
made. The parties repudiation must show an intention to not carry on with the contract. The intention can be shown by
either words or conduct. The test to determine whether conduct has shown an intention is: whether the party repudiating
has acted in such a way as to lead a reasonable person to the conclusion that he does not intend to fulfil his part of the
contract

o The judge states that this test is the correct one and holds that he will apply it to the present case

o Applying this test, the judge concluded that the appellant had repudiated and therefore it constituted an
anticipatory breach – because it was to the whole contract, the respondents were entitled to rescind the contract and
claim back the money they had already paid

• Stewart Wrightson (Pty) Ltd v Thorpe 1977 (2) SA 943 (A)

o The appellant sued the respondent for breach of contract – it held that the respondent, whilst still in the employ
of the appellant, persuaded or induced clients to move their business to a competitor of which the respondent was a
director

o The respondent defended the allegations by holding that the appellant had in actual fact breached the contract
and by virtue of that breach, he (the respondent) elected to regard the agreement as terminated

o The court a quo found in favour of the respondent – the appellant appeals against this decision

o The facts are shorty as follows:

o The respondent worked for a company – the company decided to merge with another. The respondent was not
happy with this decision and wanted to leave his employ. He wrote a letter resigning, but had to serve out the remaining
6 weeks of his contract. His boss told him to leave immediately and to not return

o The respondent holds that the appellant repudiated the agreement by telling him to leave immediately and not
letting him serve out his 6 months as required by his contract

o The appellant holds that they did not repudiate the contract and even if they did, the respondent had not
accepted the repudiation

o The judge held that in this case, repudiation meant that the appellant committed a fundamental breach of the
contract

o The judge states that the test for a fundamental breach is objective – held that in this case, the appellant by not
allowing the respondent to work and use his office for 6 months did constitute a fundamental breach

o Judgment:

o Accordingly the judge held that the appellants’ conduct amounted to a fundamental breach of the contract
(thereby repudiating it) and that the respondent accepted it. The fact that he misunderstood the true contents of the
appellants action (and thus its “offer” of repudiation) does not nullify his election (acceptance of the breach/repudiation)
 The case states that repudiation can mean to 1) terminate or renounce the contract, or 2) to commit a
fundamental breach of the contract

• Scoin Trading (Pty) Ltd v Bernstein NO 2011 (2) SA 118 (SCA)

o The respondent (deceased) was a collector of coins and medallions

o The appellant had a very rare coin in its possession – the respondent entered negotiations to buy the said coin

o The parties agreed on a price – R1,950 Mil. The respondent paid a deposit of R200 000 and agreed to pay the
balance at the end of the year

o There is however some dispute as to whether the balance would be paid at the end of December 2007 or when
the proceeds of the sale of some property became available

o The buyer died on November 16th – respondent was appointed as executer of his estate. The respondent
acknowledge the debt of the balance of the coin, but the appellant held that he was owed interest for the payment being
late – the respondent denied that interest was also due

o The court a quo delivered judgement in favour of the appellant for the balance of the purchase price but not for
the interest – the appellant appealed

o The big issue in this case relates to the effect of death on mora

o The respondent held that the buyer did not have to pay the mora interest because he died before the payment
became due

o The term mora means delay or default – the time for performance can be made either expressly or tacitly – must
be certainty as to when the time will arrive

o When the contract fixes the time for performance, mora ex re arises from the contract itself and no demand
(interpellatio) is necessary to place the debtor in mora

o On the reverse, where the contract does not fix the time for performance, an interpellatio is necessary to put the
debtor in mora – mora ex personae

o The judge held that the agreement between the parties was that the balance would be paid by the end of
December (31 December 2007) and as such, this case was one of more ex re

o If a person, in a case of mora ex re, does not perform in the stipulated time, the consequence is more interest –
the purpose is to put the creditor in the position they would have been in if the debtor had performed as he should have

o The respondent submitted that the mora needed to occur due to the culpa or negligence of the debtor

o The judge disagreed and held that: Because mora is sometimes referred to as a penalty for not paying, does not
mean that it is a delict and that it is wrongly held that breach of contract only arises due to the debtor having acted
wrongly or culpable

o In cases of breach of contract, damages are not intended to recompense the innocent party for their loss, but to
put them in the position they would have been in had the contract been executed properly

o Contractual damages, unlike delictual damages, do not depend on fault

o Judgment:

o The time of performance was fixed for the 31st of December 2007. Payment was not made on that day. The
liability to pay interest commenced the next day

o The judge also held that the death of a person does make the performance of personal responsibilities such as
payments impossible – the executor is obliged to pay the estate’s creditors before the estate is liquidated
o Thus, the buyer was in mora and the interest was due

• St Martin’s Trust v Willowdene Landowners 1970 (3) SA 132 (W) at 135-136

o This case concerns an application for an order declaring that the applicant has cancelled an agreement with the
respondent – the respondent opposes the application

o In 1964, the applicant acquired a piece of ground – not far from the municipal boundaries of JHB – there were
plans to integrate it into the municipality in the future

o The applicant did not require a large part of the land it owned for their own purposes and as such wished to
exploit it commercially (make money from it through business) – but the problem was that there were many servitudes
registered over the land

o The previous owner had negotiated and tried to relieve the land of its burdens and so did the applicant when it
became the owner of the land – but three years later (1967) there were still about 30 servitudes over the land

o In 1967 the applicant and respondent entered into an agreement which is the subject of this case – the
agreement held that the respondent should, if possible, obtain waivers from all servitude holders regarding their
servitutal rights. If this was done, it would be possible to apply to create a township on the land. A company would be
created for these purposes and the applicant would be 50% owner of the shares therein and the respondent the other 50%
- it was also hoped that a promise of some shares in the company would induce the servitude holders to waive their
rights.

o There was a provision in the agreement which held that the respondent could not warrant that all the servitude
holders would waive their rights.

o While trying to procure the waivers, preliminary work for the township would be done. If the waivers were
procured, the costs of the preliminary work would be borne by the township company so established, but if the waivers
aren’t procured, the costs would be shared by the applicant and respondent in equal shares

o No time for performance by the respondent was fixed, but it is common cause that respondent was entitled to a
reasonable time in which to procure the waivers – the issue in this case is whether the respondent was given a reasonable
time

o By the end of 1967, 21 of the 30 required waivers were obtained. However, thereafter, the process started to
slow down and by the start of 1969 6 more waivers were required. In March 1969, the applicant wrote to the respondent
informing them that if the remaining waivers were not obtained by the end of June 1969, that the agreement would be
cancelled. That time arrived and the waivers weren’t obtained and as such the applicants contends that they were entitled
to lawfully cancel the agreement. The respondent denies this and holds that not enough time had passed for cancellation
to happen

o The main argument for applicant and respondent was that in cases where no time for performance is fixed,
applicant cannot cancel without placing the other party in mora.

o A party places another in mora by demanding that performance takes place at a specified time which is
reasonable in the circumstances.

o The judge held that the question of whether a reasonable time for performance has been allowed is to be
resolved in the light of the intentions of the parties, as expressed by them, or as properly inferred by the courts from the
language of the contract or the surrounding circumstances

o In deciding what a reasonable time would be, the court must have regard to the nature of the performance
which was due, the difficulties, obstacles and delays attendant upon such performance
o The difficulties, obstacles and delays to be considered are only those which were in the contemplation of the
parties at the time of the contract

o The court should take into account reasonably prompt and appropriate action and due diligence by the party
who had to perform – in deciding this, the court must take account of the other party’s interests – it may be that the time
necessary for performance may be so unreasonably long in the light of the other party’s interests, that cancellation
becomes lawful before that time arrives

o In deciding if the cancellation was valid, the court must have regard to the specified period (given to put party
in mora), the elapsed period

o Judgment:

o The judge held that on the evidence, the respondent did not, during the elapsed period or the extended period,
act with the necessary vigilance and diligence as was required by the circumstances

o The judge also found that the time allowed to acquire all the waivers was sufficient

o As such, the applicant had lawfully cancelled the agreement

• Haynes v King William’s Town Municipality 1951 (2) SA 371 (A)

o The appellant is owner of land situated on the Buffalo river, upstream from Kingwilliamstown.

o The municipality expropriated water from the river above the appellants’ property for the use of the town. The
agreement reached with the appellant was a payment and a minimum flow of water from the dam (that now supplied the
twon) into the Buffalo River

o The respondent (town council) breached their contractual obligation in that they did not let the minimum
amount of water as agreed flow from the dam into the river – they did this due to the unprecedented drought in the area,
they held if they let the amount of water agreed on flow into the river, the dam would run dry. The appellant then sued
them.

o The appellant did not state that she had suffered any damage

o The respondent held that the water became public water and was regulated by the irrigation act – the applicant
had an abounded supply of water from other sources. The respondent also held that there is an implied terms in the
agreement that the dam must have enough water to supply all its dependents before the minimum amount agreed to can
be released. They also held that the drought was an act of God and that the release of the agreed amount of water became
impossible as a result

o The court a quo held that the respondent could not be excused from its obligation and that no such a implied
terms as they contended, exists. BUT…in awarding specific performance, a court has a discretion not to do so if it would
cause undue hardship. In this case, the release of the agreed amount of water would have left the town with a meagre
quantity of water while the applicant had an abundance of water – this would create a unduly hard consequence for the
town and as a result, the court did not grant specific performance – the appellant appealed

o On appeal, the appellant held that the justification of undue hardship was not a sufficient ground on which the
court could refuse to grant specific performance and that in this case they could not refuse specific performance

o The judge held that in our law, a plaintiff may choose to either receive specific performance or damages and
that this choice does not extend to the respondent to choose to either perform or pay damages

o The judge further held that a court will as far as possible abide by the wishes of the plaintiff as to the relief they
seek, but that a court has a discretion to not order specific performance – this discretion is not confined to specific type
of cases, nor is it to circumscribed by rigid rules – each case must be judged in light of its own circumstances

o The circumstances in which the courts have (in past) and may exercise this discretion are: A) where damages
would adequately compensate the plaintiff, B) where it would be difficult for the court to enforce its decree, C) where
the thing claimed can be readily bought anywhere, D) where specific performance entails the rendering of services of a
personal nature – what can also be added is where there is good and sufficient reason to refuse the decree and where it
would operate unreasonably hardly on the respondent

o The respondent held that the time when hardship must be assessed is at the time the contract was entered into –
the judge disagreed with this and said it made no sense – the judge held in this case, the time used to assess the hardship
should be when performance is being sought/claimed

o Judgment:

o The judge upheld the order of the court a quo as he believed to order specific performance would result in
undue hardship on the respondent and the inhabitants of Kingwilliamstown – as such, the judge did not order specific
performance

• Motor Racing Enterprises (in liquidation) v NPS (Electronics) Ltd 1996 (4) SA 950 (A)

o MRE held the rights to host the 1993 Kyalami Grand Prix – Panasonic wanted to sponsor the event.

o Part of the agreement between the two was that Panasonic would be the main/sole sponsor of the event – the
agreement also held time stipulations as to when Panasonic would pay various instalment

o MRE was liquidated before the final instalment became due but its liquidator sued Panasonic for the
outstanding amounts – Panasonic held that MRE had breached the agreement and accordingly they would not pay the
outstanding amount

o The court a quo found that MRE’s claim for payment was successfully met by the exceptio non-adimpleti
contractus as they had breached the contract

o On appeal the judge stated that: the exception presupposes the existence of mutual obligations which are
intended to be performed reciprocally and that the parties’ intentions are to be sought primarily from the agreement

o Interdependent promises are reciprocal unless a contrary intention clearly appears from the agreement

o It was held in this case that MRE and Panasonic’s obligations were reciprocal (payin for the event [sponsor by
Panasonic] and giving exclusive sponsorship rights [MRE])

o As MRE did not fulfil their obligations, Panasonic were not ordered to fulfil theirs and thus did not need to pay
the outstanding amount due to MRE – exceptio non-adimpleti contractus

• Santos Professional Football Club (Pty) Ltd v Igesund 2003 (5) SA 73 (C);

o This case concerns a football coaching agreement between the appellant and the defendant – the defendant
breached the agreement and the appellant sought to enforce the agreement

o What is also of great importance is that there was a breach clause in the contract that held that if the coach
breached the agreement then the appellants would have the right to cancel the agreement or to take legal action to the
effect of gaining specific performance from the respondent

o Before the contract had come to an end (roughly a year left) the first respondent had told the applicant of his
intention to leave the club and to start coaching the second respondent’s team.

o The main question, as stated by the judge in the court a quo was whether an order of specific performance was
an appropriate remedy in this case

o The judge cites Christie in holding that contracts of a personal nature (personal employment contracts included)
are not usually enforced as per the court’s discretion

o The judge cites authority that holds that specific performance will not be ordered against an employer and thus
not in favour of an ordinary servant.
o This case however does not concern an ordinary servant, as the respondent contracted on equal footing, has
complete control over his job and carte blanche as to decisions – and specific performance in this case is not being
sought to be enforced against an employer

o The respondent stated that in light of the disagreement as to his leaving, he could no longer enjoy a good
working relationship with the appellant and as such contended that the appellant should accept the payment of damages

o As was pointed out in the Haynes case, the person breaching the contract does not have the right to elect to
perform or pay damages – the election is up to the plaintiff

o The discretion not to enforce personal contracts is derived from public policy – not right to force a person to
serve someone against his will

o The judge cites RDL authorities which hold that someone has the right to specific performance unless there is
some equitable reason disqualifying him from obtaining such relief

o The judge held that in this case there was no such reason disqualifying the appellant from claiming specific
performance

o As a result, the judge did order specific performance.

• Cradle City (Pty) Ltd v Lindley Farm 528 (Pty) Ltd 2018 (3) SA 65 (SCA

o The case concerns a sale agreement between Lindley Farm (plaintiff in HC and now defendant) and Cradle City
(respondent in HC and now appellant)

o In terms of the agreement – the defendant sold a piece of land to the appellant

o At the time of concluding the agreement, both parties knew that there were unlawful occupiers on the land –
shorty before transfer of the property to the ownership of the appellants, the parties became aware that the unlawful
occupiers were still there. The defendants then undertook to remove them at their costs if they were not gone by the time
of transfer

o At the time of transfer, the occupiers were still on the land and as such, the defendants undertook to remove
them by a certain date

o The dispute in this case arises as, by the date the said occupiers would have been removed, they were still
present and as a result, the appellants refused to pay the balance of the amount due to the defendants

o The defendant claimed that it was owed the outstanding money

o The appellants held that the defendants did not comply with the agreement to give the appellants vacant
occupation of the land and to evict the unlawful occupiers. Therefore, their claim was premature and were not entitled to
the money

o The appellants held that the obligations under the contract were reciprocal and as long as the defendants did not
fulfil their obligation (removing the occupiers and providing vacant possession) that there was no duty to pay

o The defendants also held that they were not obliged to actually remove the squatters, but only to show to have
taken every reasonable step to attempt to remove them and that accordingly, the appellants were not entitled to vacant
possession

o The judge did not agree with this – he held that upon a proper interpretation of the agreement, the defendants
needed to provide the appellants with vacant occupation

o The NB question was whether the appellants needed to pay the outstanding balance -this depends on whether
the principle of reciprocity applies
o This principle of reciprocity (exceptio non-adimpleti contractus) recognises the fact that in many contracts, the
common intention of the parties is that there should be an exchange of performance

o Whether such an intention exits must be done through an interpretation of the contract

o There is a presumption that interdependent promises are reciprocal unless there is evidence to the contrary

o The common intention is that neither party can enforce the contract unless they are ready to fulfil their own
obligations

o Judgment:

o The judge found that the contract created bilateral obligations wherein the defendants needed to perform before
the appellants

o In this case, the judge found in favour of the defendants that the appellants had to pay the outstanding amount –
but suspended the judgment until proper performance had been given by the defendants

• Botha v Rich 2014 (4) SA 124 (CC) paras 43 -46 (only)

It is an accepted principle in our law that where a contract creates reciprocal obligations, own performance or tender of
own performance by the claimant is a requirement for the enforceability for her claim for counter-performance.This is an
instance of the principle of reciprocity. The party against whom performance is claimed may raise the failure of counter
performance as a defence – this is known as the exceptio non-adimpleti contractus. In bilateral contracts, the obligations
of the parties are prima facie reciprocal. For this principle to operate, the agreement must be reciprocal in the sense that
performance of the one cannot be enforced without performance of the other. To the extent that the rigid application of
the principle of reciprocity may in certain circumstances lead to injustice, our law of contract, based as it is in the
principle of good faith, contains the necessary flexibility to ensure fairness. The principle of reciprocity originated in the
notions of justice, reasonableness and fairness, which all constitute good faith. The principle of reciprocity falls within
this understanding of good faith and freedom of contract, based on one’s own dignity and freedom as well as respect for
the dignity and freedom of others. Bilateral contracts are almost invariably cooperative ventures where 2 parties have
reached a deal involving performance by each other in order to benefit both – Honouring that contract cannot be a matter
of each side pursuing their own self-interests without regard to the other party’s interests. In this case, good faith is given
expression through the principle of reciprocity and the exceptio non-adimpleti contractus.

• Oatorian Properties (Pty) Ltd v Maroun 1973 (3) SA 779 (A)

o The appellant is owner of lot 195, respondent is owner of the adjoining lot 193

o The appellant was busy building a mall and business complex on their lot – they required adequate space for
the parking of vehicles of their customers once the mall was done – they negotiated and later started renting a portion of
the adjoining lot, the respondent’s, for that purpose

o The NB clauses of the lease agreement are:

o That the lessee (the appellant) may only use the leased property for the purpose of parking vehicles

o The lease will be for 5 years

o If the lessee breached the agreement, the lessor could change the lease to a monthly one

o The building commenced a year later. The appellants had converted the leased property into a parking area. The
appellants also erected an open woodwork shed on the leased property for the purpose of storing sand, stone, bricks and
other building materials

o There was also steel equipment for the erecting of a crane

o The lessor saw thus as a breach and invoked his right to make the lease a monthly one
o The appellants held that they did not materially breach the lease and accordingly the lessor had no right to make
the lease a monthly one – the equipment on the ground was necessary for the building process but they then immediately
started to remove it because the lessor was unhappy

o Notwithstanding, the respondent gave the appellants the 1 month notice for termination and if they did not
vacate he held that would institute ejectment proceedings – the appellants refused to vacate the premises and so
ejectment proceedings were instituted

o The court a quo found in favour of the respondent as it held that the appellants had materially breached the
lease and held that the termination of the lease was valid – this decision turned on three questions: 1) was the breached
clause a material one, 2) did the appellants conduct breach the clause, 3)did the appellant allow the construction
company to use the premises in a way that caused the breach of the lease

o The judge states that a material clause is one which goes to the root of the contract – thus the failure to perform
it would render the performance something other from what it was stipulated for

o The judge states that the wording of clause 4 gave the lessee a very limited use of the premises and according to
the rules of interpretation could have no other meaning as the obvious one – prohibiting the use of the lease property for
any other purposes than that which is stipulated – accordingly, the clause was held to be a material one

o The second question, whether the appellant (Through the contractors) breached the agreement

o The appellants contended that the respondent did not complain until a time when the other equipment had been
on the premises for a while and as such they thought they this did not constitute a breach

o The judge held that there was nothing present which allowed the appellants to infer that a new agreement had
been made by the conduct of the parties (not complaining strait away)

o The respondents also held that the prohibition could not prohibit a temporary use of the leased property in
breach of the agreement

o The judge held that their breaching conduct was not a temporary or accidental one as the building to store the
sand etc was firmly erected and was there as a permanent feature

o The judge also held that if a breach of a material clause is committed, the materiality of the breach is irrelevant
–

o The third issue, whether the appellants allowed the construction company to use the premises in a way which
constituted a breach of the contract

o The judge held that the appellants did allow the construction company to breach the agreement

o Judgment:

o The appeal was dismissed with costs and as a result the termination of the lease was valid

• Swartz & Son v Wolmaransstad Town Council 1960 (2) SA 1 (T) at 4

o The applicant entered a contract with the respondent to build a building

o The applicant had commenced building already when it received notice form the respondent of cancellation of
the contract and that another contractor had been appointed and would take over – the applicant instituted interdict
proceedings against the respondent and the other contractor

o The applicant wanted the relief of specific performance

o Applicant says that the cancellation is unlawful and therefore constitutes repudiation

o The applicant claims specific performance or damages – we know that the court has a discretion to not award
specific performance
o The respondent holds that it cancelled the contract due to certain stipulations not being fulfilled by the
contractor (the furnishing of security or guarantee that the work would be done)

o The judge held that the furnishing of security was a requirement of the contract and in doing so, the applicant
did breach the contract – the question then became if this breached allowed the respondent to cancel the contract

o There is no cancellation clause – thus the test is the common-law test

o The test is: whether the breach goes to the heart of the contract or does it affect a vital part of the obligations or
that there is substantial performance – the breach must be so serious that it cannot reasonably be expected of the other
party that he should continue with the contract

o The judge held that the furnishing of security is important in a building contract and that a breach of such a
clause is justification for cancellation

o Another test for determining if the clause is of vital importance is: Would the defendant have entered the
agreement in the absence of such a term

o The judge held that the respondents would nit have entered the agreement without agreeing that security needed
to be furnished and as a result the breach thereof is a justifiable ground for cancelling the contract

o As such, specific performance was not ordered

• Aucamp v Morton 1949 (3) SA 611 (A)

o The appellant acquired the right under a contract, under certain conditions, to fell and remove the timber from a
forest which at the time belonged to another – the respondent bought the forest and contracted to be bound by the
agreement – he however ceased operation to first discuss the conditions with the appellant – there was no consensus
between them and accordingly, the respondent cancelled the contract

o The respondent held that the appellant had breached the contract

o Court a quo found that appellant had breached the contract and that cancellation was justified

o The appellant held that the evidence had not shown that he breached the agreement and if it did, the breaches
were of an unimportant character and did not show an intention on his part to not carry out his obligations under the
contract in the future – as such, it did not give the respondent the right to cancel the contract

o The contract imposed an obligation on the appellant to fell the trees as expeditiously as possible, but there was
not time stipulation for when he had to remove the logs that he had cut down

o The respondent relied on the fact that some logs (which needed to be removed) were not removed by the time
felling of other trees had started and that some logs were not yet cut after felling

o The appellant again held that there was no major breach of contract

o The question to be answered in the case was whether the breaches were sufficient enough to justify cancellation
of the contract

o We are dealing here again with a contract which imposes reciprocal obligations

o The rule with such cases are that if one party breaches one of the obligations that rest upon him, it will only
give the other party the right to hold the contracted as terminated if it is one which shows an intention to no longer be
bound by the contract in the future, or if the defaulter has broken a promise, the fulfilment of which is essential for the
continuation of the contractual tie

o Judgment:
o In applying those principles above mentioned, the judge held that in this case, it could not have been said that
the breaches showed an intention by the appellant to not be bound by the contract in future, nor was the breach so vital
or material that the foundation of the contract had been destroyed

o As such, appeal was upheld and the contract was not cancelled

• Strachan v Prinsloo 1925 TPD 709

o In this case, the respondent sued the Appellant in the HC for damages as a result of the unlawful cancellation of
a contract – the contract was that the respondent undertook to perform agricultural farming operations on the farm of the
appellant

o The appellant justified the cancellation on the grounds that the respondent had failed to devote his entire time to
the farming operations as he undertook to do – the respondent acknowledged his promise, but rejected the contention
that he failed to keep it

o The judge found in favour of the respondent and awarded the damages

o The appellant appealed

o The appellant’s claim is that the defendant did not live on the farm and as such was not present at times when
he should have been present – as a result, the appellant had to fulfil some of his duties – various other allegations of the
defendant not doing his work and that the appellant had to do some of his work arose

o The appellant states that if he knew that he would have to do some of the defendant’s work, he never would
have entered the agreement

o The appellant held that the point of the contract was that the respondent took over all the work of supervision so
as to relieve the appellant of the duties and to be on the farm at all material times

o The appellant holds that the defendant did not do this and as such it constituted a breach that went to the root of
the contract and thus entitled him to cancel the contract

o The defendant said that the contract was actually about production and that he obliged his obligation by
keeping the machinery running at its full capacity – he also held that if he was to be on the farm at all times, a breach
thereof did not justify cancellation

o As such, an important question is what the defendant’s actual duties was as per the contract

o The judge held that the contract stipulated that the defendant be a sub manager of the farm and relieve the
appellant of his work on the farm – the defendant did not do this and as such it constituted a breach

o The next NB question was whether this breach justified the cancellation of the contract

o The judge cites the test to determine this as: If a party shows an intention, by words or conduct, to no longer be
bound by the contract the other party is entitled to cancel – also if his breach goes to the whole of the consideration (if it
goes to the root) – a breach of a vital term (is the same as breach going to the root of the agreement)

o Judgment:

o The judge held that the defendant, by not taking over the supervising duties, as he should have, breached a vital
term of the agreement

o An NB consideration was whether the appellant would have entered the agreement if the defendant had not
agreed to do so – and the answer to this was that the appellant would not have done so

o As such, a vital breach, or a breach going to the root of the contract was committed and accordingly,
cancellation was justified
Week 10

• Segal v Mazzur 1920 CPD 634 at 644-5

o One party to a contract refuses to perform, the other party has two option – 1) he can either take advantage of
the event or 2) he can elect not to do so

o The party is entitled to a reasonable time in which to make up his mind, but once he has chosen which route to
follow, he is so bound and cannot later change his mind

o Whether he has decided to cancel or to take damages is a question of fact to be decided by the evidence

o If he makes an unequivocal act that implies he has made his choice one way, he will be bound by that choice –
this is not a rule of law, but a matter of necessary inference from his conduct

o If the party who has the right to elect, acts in a way that creates the belief that he will overlook the breach, and
the other party acts in accordance with that belief, the party who makes the lection cannot later say that he did not
overlook the breach

• Nash v Golden Dumps 1985 (3) SA 1 (A) at 22

o Where one party without lawful grounds indicates to the other party, by words or conduct, a deliberate and
unequivocal intention no longer to be bound by the agreement, he is said to repudiate the agreement – where this
happens, the other party may elect to accept the repudiation and rescind the contract. If he does so, the contract comes to
an end upon his communication of acceptance

• Marks Ltd v Laughton 1920 AD 12

o In 1918, due to a lack of shipping accommodation, a large quantity of eggs were left awaiting export. The
appellant company owned by Marks found themselves in possession in many of these eggs.

o The appellant advertised the sale of these eggs at moderate prices – the respondent after negotiating with the
appellant, went to meet the appellant. After the appellant had made certain representations as to the quantity and quality
of the eggs (that they were of great quality), the respondent bought the entire batch

o The respondent then sold the eggs to some merchants, firmly believing they would order again – this did not
happen. He then wanted to sell the eggs by auction, but again proved unsuccessful

o This caused him to have the eggs tested by an expert and then by the government expert – both found that the
quality of the eggs were very bad and not fit for human consumption. They both recommended that the eggs be
destroyed

o The cold storage owner (where the eggs were stored) heard about this and demanded the removal of the eggs
from his storage

o The respondent was set to destroy the eggs on a certain date, but before doing so, he wrote to the appellant
demanding his money back. He held that if he appellant had given his money back, he would ship the eggs back to him
so that he may avoid a total loss.

o When the date arrived, the respondent wrote to the appellant again, informing him that if he did not take
delivery of the eggs this afternoon, they would be destroyed – the appellant refused to pay the respondent back or take
delivery of the eggs. As a result, the eggs were destroyed

o The respondent instituted proceedings for the rescinding of the contract and the repayment of the purchase price
as well as damages suffered – the respondent based his claims on fraudulent misrepresentation as to the quality of the
eggs
o The court a quo found in favour of the respondent – the appellant appealed

o The appellant appealed on many grounds but the most NB here is that he holds that the respondent could not
rescind the agreement as he could not return the eggs

o Judgment:

o The judge held that the rule that parties rescinding a contract needed to return anything they had gained from
the contract, so as to restore each party, cannot apply if after delivery had taken place, but without any fault of the
purchaser, the subject matter of the contract had perished owing to the very defect complained of.

o The judge held that the respondent did try to return the eggs to the appellant, but the appellant refused to take
them back – the respondent was then forced to consent to the eggs’ destruction as the authorities had told him that they
needed to be destroyed

o As such, the appeal was dismissed and the contract was rescinded – the respondent received a sum of money

• Hall-Thermotank Natal (Pty) Ltd v Hardman 1968 (4) SA 818 (D).

o The plaintiff is a company that deals in refrigeration and air-conditioning

o The plaintiff claims a sum of money from the respondent for services rendered – the plaintiff installed
refrigerator and air-conditioning units in a fishing ship and insulted the hold of the ship

o The respondent does not deny this, but holds that the plaintiff had committed material breaches of the
agreement and therefore, he (the respondent) is entitled to cancel the agreement and does so

o The respondent said that it will return some of the items supplied to it by the plaintiff, but cannot return
everything as most of it was lost when the boat sunk while at sea (the sinking was a casus fortuitus/accident)

o It was held that the contract was a lucatio conductio operis – in contracts such as these, recission and restitution
was an option – but it was argued to not be applicable in this case as the equipment was lost at sea and therefore could
not be returned

o The judge held that restitution in integrum (restoration of both parties) is applicable when A) one party
redhibits B) when a contracting party rescinds upon any of the various grounds recognised by law

o The judge cites authority which holds that restitutio in integrum and therefore then recission cannot take place
if the parties cannot return what they have gained

o However, the judge the cites authority which disproves this averment – he scites authority holding: “if the thing
bought perished casu fortuito, so that restitution is impossible, the action redhibtoria is still possible” provided the
perishing of that which was bought was not due to the fault of the purchaser or his family

o The judge cites the Marks case from above to show that this also extends to restitutio in integrum (restitution)

o The judge holds that the person does not have to make restitution if the thing is lost/perished/destroyed through
no fault of his own

o In this case, the storm at sea and the subsequent sinking of the ship was no fault of the respondent and as such,
they do not have to return the items to be able to be successful in their claim for recission of the contract

• Primat Construction CC v Nelson Mandela Bay Metropolitan Municipality 2017 (5) SA 420 (SCA)

o The important question in this case is whether a party who refuses to accept the repudiation of a contract, can in
the face of consistent and unequivocal intention not to be bound, change his stance and cancel the agreement and sue for
damages
o The court a quo held that where the repudiation had continued, the other party was entitled to change its mind
and cancel the contract

o On appeal to the full bench, the court changed its decision and held that the other party could only change their
minds and cancel the agreement if there was another manifest act of repudiation

o The appellant, Primat, had concluded an agreement with the respondent for the upgrading of roads

o When the respondent was sued by appellant for damages for breach of contract, the respondent held that it had
repudiated the contract but that the appellants had elected not to accept the repudiation – accordingly the appellants had
to abide by their election and could not cancel the agreement and claim damages

o The only questions to answer are 1) whether the respondents did repudiate the agreement and 2) whether the
appellants were bound by their election to not accept the repudiation

o The appellants had started the work but stopped for various reasons – the respondent thus terminated the
agreement on “unlawful grounds” and as such it constituted a repudiation. The appellants however refused to accept the
repudiation and contented that it would sue for specific performance and interdict the respondents from allowing other
construction workers on the premises – the appellants wanted to resolve the issue with the respondents – the respondents
however refused and continued to “repudiate” the agreement. After this, the appellants chose to cancel the agreement
and claim damages – the respondent now claims that because the appellant had not accepted the repudiation from the
start that they could not change their minds and now claim damages

o The judge cites authority which states that the “Repent principle” is valid and that a party, who has chosen not
to accept the repudiation and has sought to enforce specific performance, may in the face of persistent breach and refusal
to repent, change his election and cancel the agreement and claim damages

o Where the defaulting party is clearly determined not to fix the breach and shows an unequivocal intention to not
be bound by the contract, the aggrieved party may abandon their futile attempt to claim specific performance and change
their election to cancel and claim damages

o The judge also holds that there does not need to be another act of repudiation – there must be repudiation of an
ongoing nature IE. An intention shown not to be bound ny the contract any longer – cites Dataclolor case that this can be
determined by what the reasonable person perceives as a repudiation.

o Judgment:

o The judge held that the respondents continued to repudiate the agreement even when given the chance to fix the
breach, but they continued to show an intention not to be bound by the agreement and as such, the appellant was entitled
to change their election to not accept the repudiation and seek specific performance, to now rather cancel the agreement
and claim for damages

• Victoria Falls & Transvaal Power Co v Consolidated Langlaagte Mines at 22

o The sufferer of a breach should be in the position he would have occupied had the contract been performed, so
far as that can be done by payment of money and without undue hardship to the defaulting party

o Such damages are only awarded as flow naturally from the breach or as may reasonable be supposed to have
been in the contemplation of the contracting parties as likely to result therefrom

o It is the duty of the complainant to take all legal steps to mitigate the loss consequent on the breach

• Trotman v Edwick 1951 (1) SA 443 (A) at 449B-C

o A litigant who sues on contract, sues to have his bargain or its equivalent in money or in money and kind. A
litigant who sues on delict, sues to recover the loss which he has sustained because of the wrongful conduct of another,
in other words, for the amount his patrimony had diminished by
• Shatz Investments (Pty) Ltd v Kalovyrnas 1976 (2) SA 545 (A)

o The court a quo awarded the lessee damages for breach of contract by the lessor and subsequent cancellation of
the lease by the lessee

o The respondent, a Greek, had worked in and co-owned a successful take-away restaurant in Potchefstroom. He
then sold it and took his share of the money.

o He had wanted to open a similar business later. To that effect, he entered into a lease agreement with the
appellant to open such a business in his shopping complex

o An important clause of the contract was that the lessor would not lease any of the other shops to business that
were similar to that of the respondent

o Later, it became clear that a bakery, that would be making the same type of food as the respondent would also
be opening in the shopping centre – the respondent immediately sent a letter to the appellant holding that this was not
allowed – it went unheeded and the bakery opened up, competing with the respondent

o The respondent decided to cancel his lease and sue the appellant for damages

o In the meantime, he continued operating his business –the business did very well. However, a month later the
bakery opened and immediately the respondent’s business started seeing a decrease in business

o The respondent then cancelled his lease and vacated the premises

o The appellant had contended during the proceedings that he did not commit a breach of the contract

o The court a quo found in favour of the respondent and as such the appellant appealed the decision

o In the appeal, the respondent sought special damages – the judge agreed the damages sought were special
damages

o The judge held that where premises are leased for a profit making business, as was the case here, the loss of
profits for the unexpired term of the lease may be recoverable in appropriate circumstances – these damages are
regarded as special damages

o The appellant held that for special damages, the parties must have actually or presumptively contemplated that
a loss of that kind would probably ensue upon such a breach – he also held that the damages sought were too remote and
not recoverable

o For this to hold true, the respondent must fail to prove that they contracted along the principles enunciated in
the Lavery case

o The first principle is that the parties’ contemplation (as to what damages they forsaw) must be determined at the
time they contracted and not at the time of the breach (the contemplation principle)

o This contemplation can be inferred from A) the subject matter and terms of the contract itself or B) the special
circumstances known by both parties at the time they contracted

o With regards to B) – there must not only be such knowledge, but the contract must have been entered into on
the basis of that knowledge – by adding this, it is called the “convention principle”

o The judge held that for now, it is the contemplation principle which is used

o Applying the contemplation principle, the judge was satisfied that the respondent had proved the correct
contemplation necessary for the damages he sought

o As such, the judge held that the respondent showed that the parties had contemplated the type of damages
sought at the time of contracting (that he would sue for profits and goodwill – prospect interest)
• Lavery & Co Ltd v Jungheinrich 1931 AD 156

o The judge stated: where a defendant commits a breach of contract in regards to the supply of goods known to
be required for resale, the plaintiff may be able to claim, in addition to other loss, damages for loss of business

o The plaintiffs bought various items from the respondents – they hold that the respondents knew that the
materials were intended for resale

o The plaintiffs held that the items purchased were defective and that this resulted in a loss of profitable business

o The judge held that the plaintiff’s statements to these effects were not enough to show that the losses suffered
was a probable consequence of the breach or that these losses might reasonably have been contemplated at the time of
the contract - the judge held that: There must, in my opinion, also be some allegation definitely indicating such probable
consequence or a reasonable actual contemplation thereof

• Automated Office Technology (Pty) Ltd t/a AOT Finance v International Colleges Group (Pty) Ltd [2018]
ZASCA 31

o The respondent had hired office equipment such as copiers etc from the appellant – the respondent, at a certain
point in time, had ceased to make payments for the rental thereof

o This case concerns this dispute

o When the appellant had sought an explanation for the non-payment, the respondent had just stated that new
owners had taken over and were reviewing all rentals – the amount of debt grew larger and the appellant instituted
proceedings claiming all the equipment back, payment of the debt as well as future payments of rentals as it had
cancelled the contract

o A company called Katlego was the original company with whom the respondent had the rental agreement –
Katlego later ceded their rental agreement with the respondent to the appellant

o Katlego had 9 agreements with the respondent, 3 of which were ceded (validly) to the appellant – the remaining
6 were only signed by the respondent after the cession had occurred

o As such, the respondent contend that the other 6 agreements were not validly ceded to the appellant

o Accordingly, the issue to be determined by the court was whether the appellant had shown that the other six
agreements were also validly ceded to it – the court a quo and the appeal to the full bench found that the appellant hadn’t
established this and awarded it the sum for the three rentals not in dispute but dismissed the claims for the other 6 –
appellants appealed to SCA

o The evidence of the appellant was presented by one of its directors – he held that he had signed the master
agreement and all 9 other agreements on behalf of Katlego, as he was authorised to do – he had this authority by way of
an agreement between him and Katlego

o When the relationship between the appellant and Katlego started, they agreed that each time Katlego entered a
rental agreement, that it would be financed by the appellant and cede to it

o Accordingly, the director held that the first three agreements were ceded to the appellant on the date of the
written cession agreement and that the other 6 were ceded to appellant when the director signed the agreements of
Katlego and simultaneously accepted their cession to the appellant, in accordance with the oral agreement with Katlego
when their relationship started
o Under cross-examination the director held that Katlego had a discretion whether or not to cede the agreements
to the appellant – thus contradicting himself – the court a quo found in favour of the respondent as the appellants had not
made out the case that they had pleaded

o The appeal court held that whether or not the 6 agreements were ceded to the appellant had to be determined by
interpreting the written cession agreement, the master rental agreement and the individual rental agreements

o The judge held that the director’s contentions that the other 6 agreements were ceded to the appellant in
accordance with an oral agreement from 2003 is of no relevance for the interpretation of the written cession agreement,
particularly as he held that the purpose of the written agreement was to record the oral agreement

o When interpreting the written cession agreement, the significance of the prior oral cession agreement lies in the
context and circumstances in which the written cession agreement came into being

o The central enquiry is the meaning of the sentence contained in the written cession agreement which provides
as follows: ‘. . . hereby cede and transfer all of the Cedent’s rights, title and interest in the Master Rental Agreement
signed on 26 October 2005 and the addenda signed hereto between. . .’ Katlego and the respondent, to the appellant

o In other words, do the words ‘addenda signed hereto’ refer only to those written rental agreements ie addenda,
in existence and signed at the time of signature of the written cession agreement, or do they include written rental
agreements to be concluded in the future

o The judge also held that: it is clear that the rights and obligations of Katlego and the respondent in respect of
the hire of particular equipment by the respondent from Katlego, could only be determined by reading the master rental
agreement together with each rental agreement, applicable to the equipment in question Each of the written rental
agreements could not stand alone and had to be read in conjunction with the master rental agreement.

o The judge cites the Endumeni case: An interpretation will not be given that leads to impractical, unbusinesslike
or oppressive consequences or that will stultify the broader operation of the legislation or contract under consideration

o The judge then holds that: To place an interpretation on the words, ‘. . . and the addenda signed hereto . . .’ in
the written cession agreement, to mean that only signed rental agreements in existence at the time of the cession were
ceded, would lead to impractical, unbusinesslike and oppressive consequences and would stultify the broader operation
of the master rental agreement, as well as the individual rental agreements concluded after the written cession
agreement. This is because the later rental agreements would be inchoate and unenforceable, because Katlego no longer
possessed any rights, title and interest in and to the master rental agreement, having ceded them to the appellant.

o The appellants held that this is not the case as the terms and conditions of the master agreement was
incorporated into the 6 new agreements on an agreement between Katlego and the respondent

o The judge held that - Having divested itself of all of its rights, title and interest in and to master rental
agreement in favour of the appellant, Katlego could not re-acquire them simply by agreement with the respondent. What
was required was a re-cession of the ceded rights, title and interest by the appellant as cessionary, back to Katlego, their
previous holder

o This interpretation is in accordance with the background and context in which the written cession agreement
was concluded namely, the prior oral cession agreement transacted in 2003 in terms of which Katlego, according to the
evidence of Mr Coull, agreed to cede to the appellant its rights, title and interest in future rental agreements to the
appellant

o Judgment:

o Accordingly, in terms of the written cession agreement properly construed, the rights, title and interest of
Katlego in each of the six rental agreements in issue, were validly ceded to the appellant on the date on which each of
these rental agreements were concluded

• Paiges v Van Ryn Gold Mines Estates Ltd 1920 AD 600

o The appellant sued the respondent for a statement of wages and the payment of such wages owed to a person
named Klein

o Klein, a worker in the employ of the respondent ceded his right to the payment to the appellant

o The employment of the Klein’s employment contract with the respondent outlawed the cession of one’s salary
to anyone except in very special circumstances which are outlined by the employment agreement

o Some of the judges in the court a quo held that one can validly restrict the cession of rights in an employment
contract, others held that this was contrary to public policy as it infringed one’s right to freedom of contract

o The judge cites authority which holds that an agreement which takes away from the owner, the free right to deal
with his property, are of no force and effect – this principle is only applicable where the person restricting the dealing of
an owner with his own property has no interest in the matter

o Thus, if such an agreement was reached, and it can be shown that the restriction serves a useful purpose to the
other party, such an agreement can be valid

o The judge held that in this case, the respondent has got a valid, useful interest in the matter as it can cause great
confusion if all their employees cede their wages to different parties.

o The judge also holds: a trader ought not be prejudiced by an agreement to which he was not a party and of
which he was not aware

o The judge held that this argument looks past the cardinal point that at most, a cessionary only steps into the
shoes of the cedent and can have no greater right than the cedent. When the cedent has therefore parted with the right to
cede the debt, no other party can obtain any rights to it. The right which the creditor obtains, being circumscribed by the
terms of the agreement with the debtor, becomes by the agreement between the parties, strictly a personal right and
cannot be ceded

o As such, the judge held that the clause in the employment agreement (between the klein and respondent)
prohibiting the employee from ceding his wages to another is valid

o Therefore, the cession of the wage by mr Klein to the appellant is not valid

• Nedcor Bank Ltd v Hyperlec Electrical & Mechanical Supplies CC 2000 (2) SA 880 (T)

o The applicant applies for an order placing the respondent under winding-up in the hands of the Master of the
HC

o The respondent’s account with the applicant was overdraw with a large amount – the applicant sent letter
demanding payment thereof plus interest. The respondent did not pay

o The applicant alleges commercial insolvency rather than actual insolvency – the respondent claims that it is not
insolvent

o The respondent does not dispute the debt it owes the applicant – its defence is that it does not have to pay the
applicant as it has a claim against the applicant which exceeds the amount owed by them to the applicant

o The counterclaim is based on a cession by a third party, Interest Settlement Corporation (ISC), to the
respondent

o ISC says that the amount that makes up the claim that they had against the applicant (which is now ceded to the
respondent) is well over the amount owed by the respondent and is made up of a large number of small amount, which
were ceded to it (ISC) by people who have claims against the applicant
o Thus, the question before the court is: whether the cession from ISC to the respondent is valid and whether it
can be used as a counterclaim in this matter

o The applicant holds that the claim ISC had, which it ceded to the respondent is highly questionable and has not
been prima facie established – it also holds that it is a mala fide cession as another party, on behalf of the respondent,
admitted that the respondent had gone in search of claims against the applicant, which it could take over by cession, so
as to extinguish it’s debt to the applicant

o Thus, the applicant holds that the respondent and ISC were motivated to effect a so-called cession for the sole
purpose of enabling the respondent to evade its responsibilities toward the applicant – they hold that this is not
consonant with the bona fide nature of contracts – it is in fact mala fide as its single motive is the avoidance of a
contractual obligation

o The respondent holds that it was not mala fide – it holds that the applicants claim against them would have
ended their business, so their search for counterclaims against the applicant served as a way out of their predicament

o The judge holds that the real question is whether the cession was real or whether it was fictitious or simulated –
What were the intentions of the parties to the cession?c – was their intention unlawful, immoral or against public policy?

o If their intentions were unlawful, immoral or against public policy, the cession would not be valid even if their
intention to cede was genuine

o Judgment:

o The judge held that the cession in this case was at least immoral or against public policy – this due to the fact
that the respondent went in search of counterclaims so as to extinguish its own debt

o The judge also held that it agrees with the applicant that the claims against it, which were ceded by numerous
individuals to ISC is questionable

o As such, the cession from ISC to the respondent was not valid

o The order for winding-up of the respondent was ordered by the court

• Van der Merwe v Nedcor Bank Bpk 2003 (1) SA 169 (SCA)

o The appellant (van der Merwe) had borrowed money from the respondent

o The appellant defaulted on his loan and consequently the respondent sued him for the repayment thereof

o The appellant’s defence was based on the set-off of a ceded claim

o He held that a close corporation, of which he was the only director, ceded a claim against the respondent of the
exact value of the loan to him and as a result, the respondent’s claim against him was extinguished by way of set-off

o The close corporation’s claim against respondent was based on sale agreements – it had become apparent that
the agreements were invalid. As a result, the appellant had contended that the close corporation had a claim against the
respondent for the repayment of the deposits paid in terms of the sale agreements – it ceded these rights to the appellant

o The respondent disputed the validity of the cession and the set-off

o In terms of the cession, the respondent held that the cession was effected through an agreement which the
appellant had concluded himself – such an agreement was impermissible

o The judge held that the argument made by respondent as to the validity of the cession (above) was not correct
in terms of our law (it was not impermissible)

o The judge held that the real question became whether the cession had not become a splitting of one cause of
action between two creditors - this was due to the fact that the claim which the close corporation had against the
respondent was larger than the sum which it ceded to the appellant. Thus, the appellant held a claim against the
respondent and the close corporation had a claim against them for essentially the same case

o In this regard, a claim can only be split in two if the debtor (in this case the respondent) consents – in this case
they did not consent

o As a result, the splitting of the claim had prejudiced the respondent as now they had to defend the same claim
on two different fronts

o Accordingly, the cession is not valid

• Goldblatt v Merwe (1902) 19 SC 373;

o In this case, the only question pertained as to where delivery of goods sold had to take place

o The defendant was prepared to deliver the cigarette boxes at his own place of business and informed the
plaintiff by letter

o The plaintiff insisted on the cigarettes being delivered to his own house

o Again, the defendant tendered delivery of the cigarettes, upon payment of the price, but at his own place of
business

o In the case of a sale of specific goods, the rule of our law is that in the absence of agreement as to the place of
delivery, they must be delivered at the place where they were at the time of the sale

o If goods are ordered to be manufactured, they must be delivered at the place of manufacture.

o If a local custom is relied upon as taking a case out of the general rule, there must be clear proof of such a
custom - No such proof is forthcoming in the present case.

• Concrete Products v Natal Leather Industries 1946 NPD 377

o The question in this case is whether the defendants were entitled to cancel the agreement when they purported
to on the 18th of may

o The plaintiff’s contend that the delays in delivery were not unreasonable, given the war which had been going
on, as this made the obtaining of steel difficult

o The judge held that in this matter, the shortage of steel was not a factor to be considered in dealing with
whether the plaintiff had commenced delivery to the plaintiff in a reasonable time

o As such, the judge held that in determining whether the respondent had waited long enough before cancelling
the agreement, one had to apply the ordinary test for contracts of this kind where no time for delivery had been fixed

o It was common cause that at a different time, the defendants had placed a large order and received it within a
fortnight ( 2 weeks)

o This order was a trial run to see the quality of the product as well as to determine if delivery (which the
respondents regarded as being between 10-14 days) would take place within a reasonable time

o Thus, the time in which the trial order was delivered is a factor to be considered in determine whether the
plaintiffs had acted reasonably in the present case

o The plaintiffs contended that the defendant’s insistence that the contract be carried out amounted to a waiver on
their part to cancel the agreement
o In this case, there was no time specified within which delivery had to take place – it was also a contract where
time was of the essence – as such, delivery has to occur within a reasonable time

o The judge held that it must be difficult to determine when a reasonable time has passed and thus when
cancellation becomes valid

o It is also a rule in our law, that the innocent party has a reasonable time within which to decide whether they
want to cancel the agreement or not

o During the time the innocent party decides on whether to cancel or not, the other party (breacher) can remedy
his fault and accordingly the right to cancel may be extinguished

o The contract stipulated that there be a delivery of 10 000 units per week

o The plaintiffs had only supplied 2500 per week

o The judge accordingly held that, upon considering the circumstances and the express provisions of the contract,
the delay in delivery was unreasonable and thus justified the defendant in cancelling the contract – he also held that the
late acceptance of some of the units did not amount to a waiver by the defendant

 Thus, one must wait a reasonable amount of time (which is determined by the circumstances and the express
provisions of the agreement) before one can cancel

 Even when that time then arrives, one has a reasonable time within which to decide whether to cancel or not –
if the other party the remedies their fault, the right to cancel may fall away

• Swadif v Dyke 1978 (1) SA 928 (A) at 940-941 (only these pages)

o The case concerns whether the plaintiff is entitled to an order for the cancellation of a mortgage bond

o The other party submitted that the mortgage cannot be set aside because when the order of court became final,
it novated the debt on the bond

o The question becomes whether the fact that a final judgement was obtained on the bond, prior to the liquidation
of the company, deprives the plaintiff of the right and relieves him of the duty to take steps to have the registration of the
bond cancelled – this depends upon the effect of the judgment as a form of novation of the obligation under the bond

o In our law, there are 2 forms of novation – 1) novatio voluntaria (voluntary novation) and 2) novatio necessaria
(compulsory novation)

o Voluntary novation has its origins in contract – accordingly it is essentially a matter of intention and consensus.
When parties novate, the intend to replace a valid contract with another valid contract

o Compulsory novation takes placed by operation of law – it arises out of judicial proceedings between parties
whose rights and obligations are in issue between them

o The judge cites authority: Novation takes place where an obligation is released upon the terms that
simultaneously another obligation takes its place

o because properly speaking, it (compulsory novation) is not a novation, but an additional confirmation or
continuation of a previous obligation, so as to perpetuate a right of action which would have failed through lapse of
time, and to pass to heirs a right of action which would have been lost by death".

o Thus, a judgement enforcing rights under a contract has the effect confirming and reinforcing such rights rather
than superseding them.
• Drake Flemmer & Orsmond Inc v Gajjar 2018 (3) SA 353 (SCA)

o The issue here is the date at which damages should be assessed in an action against attorneys for professional
negligence in the conduct in a client’s claim against the RAF

o The claim was settled at substantially lower than it should have been

o In relation to the assessment of the true value against the RAF, the judgment considers 1) the law to be applied,
2) the facts and evidence to which regard may be had, 3) the time value of money

o The client (Sutherland) in the case referred to above is presently represented by a curator a litem, who is the
respondent in this matter

o Sutherland was badly served by two successive attorneys – the first (DFO) and second appellants

o DFO were Sutherland’s attorneys in his claim against the RAF and they negligently undersettled the claim. The
second appellant, Le Roux Inc, were his attorneys in his claim against DFO (for negligence), who negligently let his
claim against DFO prescribe

o The assessment date for purposes of applicable law and evidence

o The case concerns 3 damages claims – 1 delictual against the RAF and 2 for breach of mandate against DFO
and LRI

o With regards to his claim against the RAF, he could bring evidence that was available or known to him at 1
December 2002 (judge estimated that this is when the trial would have been had it not been for negligence of attorneys)
and the rules applicable would have been the rules around delict at the time

o With regards to his claim against DFO, the judge held that the damages are assessed at the time of breach – but
our courts allow for some flexibility

o The judge held that: If, but for the attorney’s negligence, a personal injury claim against the the original debtor
would have gone to trial, one assess the date for damages as the date of the notional trial

o As such, again the judge held that it should be assessed as from December 1 2002

o With regards to his claim against LRI, the case against DFO, had it not been for the negligence of LRI, would
have come to court on 1 December 2004 – thus, the damages as against LRI will be assessed at that time

o The time value of money

o The judge held that the money should have been calculated as this:

o The court would have awarded the plaintiff just over 4.5 Million in damages in December 2002 (When the
RAF trial would have ended) – interest should then be calculated (at 15.5% which was the rate at the time) from that
time for 13 years up to 15 December (when the case came to court again [claim against both DFO and LRI])

 This is a very complicated case – all that actually needs to be known is that, prescription starts to run when the
debt falls due – the dates selected in this case (2002, 2004, 2015) is when the debts fell due and therefore these dates
were selected to determine the damages that needed to be awarded to Mr Sutherland

• Grootchwaing Salt Works Ltd v Van Tonder 1920 AD 492 at 497

o The case concerns confusio

o In regards to contractual obligations, it is the congruence of the debtor and creditor in the same person and in
respect of the same obligation. The typical example of confusio and the one mainly dealt with in the books is the case of
a creditor becoming heir to his debtor or vice versa.

o But the same position is established whenever the creditor steps into the shoes of his debtor by any title which
renders him subject to the debt – and it is common cause that confusio takes place as between lessor and lessee when the
latter acquires the leased property

o As to the consequences of confusio, there can be little doubt that, generally speaking, it destroys the obligations
in respect of which it operates

o A person cannot be his own creditor, nor his own debtor – and if there is no other debtor, the debt is
extinguished

o But the obligation is only destroyed to the extent to which the concurrence of the opposing capacities renders it
impossible to exist

o Thus, when a creditor of two debtors, becomes heir to only one of them, the other debt continues

• Peters Flamman & Co v Kokstad Municipality 1919 AD 427

o In 1906, the respondent entered into an agreement with the appellants under which the appellants undertook to
light the street lights of Kokstad each night – contract to run for 20 years

o The appellant’s company being comprised of German citizens, meant that in 1915, they were all interned

o As a result, the appellants could not fulfil their obligations under the contract – the respondent sued for
damages for breach of contract

o The judge held that it was impossible for them to perform under the contract by virtue of an Act/order of State
(ordering their internment) – thus the question became whether, under the circumstances, they could be held liable for
breach of contract

o By the law of contract, a contract is void if at the time of its inception, performance is impossible

o If a contract had become impossible to perform after it had been entered into, the general rule is that it is then
also as if it had been impossible from the start

o The judge held: If a person is prevented from performing his contract by vis major or casus fortuitus, under
which would be included such an Act of State as we are dealing with here, he is discharged from his liability

o Thus, in this case, as the appellants were prevented from performing by a force outside its control, in a situation
where no one else would have been able to perform in the same situation, they cannot be held liable for breach of
contract by way of supervening impossibility

• World Leisure Holidays (Pty) Ltd v Georges 2002 (5) SA 531 (W)

o In this case, the respondent booked a holiday for his family to Mauritius through the appellant and paid in
advance
o Due to a Cyclone hitting the island a day before the respondent was to leave for the holiday, the flight was
cancelled – however, the people on that flight were put on a flight to Mauritius a day later than planned

o The respondent however cancelled the trip (the agreement) - he held that it became impossible for the appellant
to perform its obligation – wanted his money back

o The appellant relied on temporary supervening impossibility

o The judge held: The obligation of the debtor is suspended for the period during which impossibility continues

o Temporary impossibility of performance does not bring a contract to an immediate end

o The respondent is only allowed to cancel the agreement where the foundation of the contract is destroyed or
where all performance is already, or would become impossible or where part of the performance is or would become
impossible

o In this case, the performance was not impossible, it was merely delayed

o As a result, the respondent could have validly cancelled the agreement and as a result cannot claim back his
money