South African contract law

It is unsurprising, then, that certain conduct may constitute both a breach of contract and a delict (as when, in Van Wyk v Lewis,[7] a surgeon negligently left a cotton swab inside a patient's body), in which case there is concurrent liability, permitting the plaintiff to sue on either basis.

Only for contracts consensu (e.g. sale, lease, partnership and mandate) was mutual assent (consensus ad idem) "clothed" in solemnities sufficient to make the agreement enforceable.

Taking the Christian view that it is a sin to break one's promise, canon lawyers developed the pacta sunt servanda principle under which all serious agreements ought to be enforced, regardless of whether there had been compliance with strict formalities as prescribed by secular law.

[14] This was met with fierce resistance by northern Afrikaner jurists like John Gilbert Kotzé, and later rejected outright by the Transvaal Supreme Court in Rood v Wallach (1904) which applied a general principle of binding force.

As Hutchison and Pretorius (2009) note, 'The law of contract is currently undergoing a process of quite profound change and renewal as it adapts to meet the demands of the new constitutional era in South Africa'.

In such a case, there is consensus ad idem; what is rectified is not the contract itself as a juristic act (negotium), but rather the instrument (instrumentum) in question, because it does not embody what the parties intended to be the content of their agreement.

A misrepresentation is a false statement of past or present fact, not law or opinion, made by one party to another, before or at the time of the contract, concerning some matter or circumstance relating to it.

In the past, the law recognised such a duty to speak in only a limited number of exceptional cases—where, for example, there is a special relationship of trust and confidence between the parties, as in the case of partners, or where a statute obliges a person to disclose certain information.

As Corbett AJA noted in Alfred McAlpine v Transvaal Provincial Administration, 'In legal parlance the expression "implied term" is an ambiguous one in that it is often used, without discrimination, to denote two, possibly three, distinct concepts'.

A mixed condition is one composed of both elements: casual and potestative: for example, 'If Francois (one of the contracting parties) marries Cindi (some third person)’, or 'if the children continue to reside with their mother (the beneficiary)’.

Exemption clauses often bring into issue questions of equity between big business and the common man: for example, as cited (unsuccessfully) by a patient in his claim against a hospital in Afrox Healthcare v Strydom.

Where there is no such express agreement, circumstances may nevertheless be present from which a tacit choice of law may be inferred (for example, where the contract deals with concepts peculiar to a particular system), but such cases are in the nature of things relatively rare.

Traditionally this is done on the basis of a presumed intention fictitiously imputed to the parties, but the more modern approach is for the proper law to be determined objectively, with reference to the factual links between the agreement and the various relevant legal systems.

As Joubert JA put it in Coopers & Lybrand v Bryant,[95] "the language in the document is to be given its grammatical and ordinary meaning unless it would result in some absurdity or some repugnancy or inconsistency with the rest of the instrument.

"[96] "Recourse to authoritative dictionaries is, of course, a permissible and often helpful method available to the Courts to ascertain the ordinary meaning of words," notes Hefer JA in Fundstrust v Van Deventer.

If intra-textual treatment does not clearly yield the intention of the parties, the interpreter must look to the extended context to draw useful inferences from the nature of the contract, its purpose and the background against which it was concluded.

Finally, but only "when the language of the document is on the face of it ambiguous,"[123] and its meaning therefore uncertain,[124][125] the courts may consider surrounding circumstances: "what passed between the parties during the negotiations that preceded the conclusion of the agreement.

Where even the use of surrounding circumstances does not provide "sufficient certainty"[121]—where, that is, there is ambiguity in the narrow sense—and there is still no substantial balance in favour of one meaning over another; where, in other words, the case is one "of 'ambiguity' as opposed to mere 'uncertainty,'"[125][129] then "recourse may be had to what passed between the parties on the subject of the contract.

The question was raised as far back as 1979, in Cinema City v Morgenstern Family Estates, "whether the stage of development has been reached where the 'open sesame' of uncertainty may be dispensed with as a prerequisite to opening the door to evidence of surrounding circumstances, in either a limited or wider sense."

Such an approach would be "less artificial, more logical, consistent with modern thinking on the meaning of language, and would avoid the danger of a court enforcing a term in a contract to which neither party subscribed".

[140] The strongest judicial attack on Delmas to date was launched by Harms DP in KPMG v Securefin: The integration (or parol evidence) rule remains part of our law.

[141]This obiter dictum has been read as effectively heralding a new era in the interpretation of contracts in South Africa, suggesting that the Supreme Court of Appeal will abandon the distinction "as soon as it is presented with an opportunity to do so.

For example, a property developer contracts an agent to find him a designer for a golf course he wishes to build, but does not give a specific time for the completion of this task; it is an open agreement.

It is extrajudicial, and may be verbal or written, but it is usually made in a letter of demand, beginning with the words "I am now putting you to terms..." The usual remedies, discussed more fully in the next section, apply for breach in the form of mora debitoris, namely: One consequence shared by other forms of breach is that, if performance becomes impossible after a debtor has fallen into mora, the debtor is not excused from performance (a consequence known as perpetuatio obligationis or, literally, "the perpetuation of the obligation").

The cases of Benson v SA Mutual Life, Santos v Igesund and Haynes v King William's Town Municipality[159] set out guidelines to be taken into consideration where the court is asked to grant specific performance.

The mitigation rule, however, states that, where a breach of contract has occurred, the innocent party must take reasonable positive steps to prevent the occurrence of losses, or his claim may be reduced or eliminated.

[203] Variation, in other words, is usually preferred to novation: It is generally assumed "that the parties intended only to modify, augment, or diminish the obligation, and not to extinguish the old debt, and substitute a new one, unless the contrary is particularly expressed".

Gerike acknowledged that technically, under the Prescription Act,[219] her claim had prescribed, but argued that in fact it had not, in terms of section 12(3), because she had only discovered the identity of motorboat driver some time later.

The court disagreed, finding on the evidence that, instead of leaving everything to her husband, and thereby paying a purely passive role in the identification, she could herself have asked the one question required to establish Sacks's identity.

Then follow general clauses on variation, severability, entire agreement, cession, waiver, domicilium citandi et executandi (notices, address for service), applicable law and jurisdiction, alternative dispute resolution procedures, force majeure (vis major and casus fortuitus), costs, and confidentiality.