The NCA does not apply in respect of lease of immovable property; the common-law rules governing such contracts have been left intact.
Some commentators on the Act have observed that it has in fact blended the lease of movables with a sale, and that this could create the problem of determining which naturalia of the contract will apply.
Contrary to Roman law, however, is that in South Africa prevails the Roman-Dutch doctrine of huur gaat voor koop (“lease trumps sale”).
It is a rule of the common law that, unless a contractual discretionary power is clearly intended to be completely unfettered, an exercise of such a discretion must be made arbitrio bono viri.
In this case, in Van Heerden DCJ's obiter dictum, he noted that it is conceivable, albeit unlikely, that a stipulation may be so worded that an absolute discretion to fix a prestation is conferred on one of the parties.
In these circumstances, it is unnecessary to express a view as to whether such a stipulation will be invalid as being in conflict with public policy, or whether the fixing of the prestation may only be assailed when it is done in bad faith.
Examples of such statutes are ESTA, PIE, Land Reform Labour Tenants Act, RHA and NCA.
Regarding the common law in terms of competing leases, see the case of Croatia Meat v Millennium Properties.
According to Karin Lehmann, the word "use" encompasses both The lessee does not, however, obtain jus abutendi: the right to take any of the substance of the leased property.
In Sishen Hotel v Suid-Afrikaanse Yster en Staal Industriële Korporasie, the Appellate Division extended the right to commodus usus by interpreting the lessee's right against the lessor to include a restraint upon the latter to refrain from direct or indirect conduct which negatively affects the profitability of the leased thing.
The conclusion that the right to profitability is an ex lege term in all commercial leases appears to have been received with mixed feelings and remains under suspicion.
Correct perusal of all contractual terms, argues Hawthorne, would have led Malan J to the same conclusion as Botha JA in the Sishen case.
Furthermore, it is assumed that the party will use his discretion arbitrium boni viri: that is, according to the judgment of a good man.
In Lobo Properties v Express Lift Co, the court held that the "fair and reasonable amount" formula was acceptable in appropriate circumstances.
Note, however, that the actual decision on this aspect of the case was that the facts alleged did not justify an inference that the parties had agreed either upon any sum of money or any formula.
Therefore, with regard to a lease of land for agricultural purposes, it is possible for the parties to agree that the rent is a percentage of the produce of the farm.
Many authorities take the view that, by law, rent cannot consist in anything other than money or fruits, but this prevents the enquiry's being pressed to its proper conclusion.
When dealing with leases of moveable property, one should note the formalities introduced by the NCA, particularly those relating to pre-agreement disclosures, delivery of the relevant documents free of charge, compliance with plain-language requirements, provisions relating to unlawful agreement and unlawful provisions in a contract, and the consumer's right of cooling off.
In any event, the huur gaat voor koop doctrine is revitalized in so far as the previous legislation may have diminished its application to unregistered long leases.
If strictly construed, the proviso would abolish the well-established rule that registration is not necessary as against a successor who had notice of the long lease.
In terms of section 11(4) of the Act, transfers, cessions, leases, subleases, alienations and mortgages, or variations thereof, must also be so registered.
As the RHA applies, inter alia, to huts and shacks, there will in practice be many instances of dwellings on land for which there is no title deed, but this is not the result of, nor is it influenced by, the applicability of the FRLL Act.
This involved the repeal of the sections in the statutory law of the Transvaal, Orange Free State and Natal, which required writing for validity inter partes.
Nothing further need have been done, as the removal of the repealed sections resulted in the fact that the common law would have been in force in all provinces and uniformity would have been achieved.
Furthermore, there is no mention of the fact that, if the lessee is in occupation at the time of the sale, onerous successors are bound for the first ten years of the currency of the unregistered long lease, even though they did not know of its existence.
Among those who are bound to recognise and continue the lease, now that the Roman-Dutch Law principle that lease takes precedence over sale (huur gaat voor koop) has been adopted, Van Leeuwen mentions purchasers and donees, while Voet lists "usufructuaries, legatees, donees and the like successors on particular title," and says that their position is in no way distinguished from that of purchasers.
This position is accepted by proponents of the universal-or-particular-successors distinction, as it has been agreed that the doctrine applies not only to purchasers of leased property, but also to gratuitous successors in title of the original lessor.
On both approaches, even if neither the lessee nor anyone else holding under or through him is in occupation, a short lease is effective against heirs, legatees, donees and other gratuitous particular successors.
Professor Wille considered that creditors' rights took preference over those of a lessee who was not in occupation, but the point was left open in Kessoopersadh v Essop.
In respect of unregistered long leases, the huur gaat voor koop rule applies for the first ten years of its existence.