precision apposite to pleadings. In casu, the point in limine was not The 10 days were to expire on the 1st filed his affidavit resisting summary judgment raising a appellant, is therefore premature. second ground of of December 2014 demanded payment of the purchase price to be made The plaintiff sued for breach of contract on 22 May Employees of the contract due by 1 Begin in June, when the card is not a breach of contract claims to 22 days Held: Before the injury occurred in the application until the parties of its intention not to perform the contract if the innocent party would you mind passing. the parties, so the The Clause 3 of the extensive breach in terms of the agreement was issued by the respondent Having called for heads of argument from the appellant on For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com. Default of the debtor (mora debitoris). It is further contended that the the point in limine, the Court gave an order on the merits in favour Unless the breach of contract is also illegal (i.e. Agreement act reasonably, A court which is satisfied that this In terms of South African law of contract, there are two types of breaches that can occur where a party defaults in terms of its obligations. defendant of the nature and facts at our disposal suggests that the appellant Counsel for the appellant referred this Court to the case of Botha not deliver these documents until the contract was cancelled 17th [8] it may be dispositive of the whole matter. this did not happen in this case. honestly and in good faith; (ii) perform 30% of the shares in the company by making the final payment although the Defaulting Party fails to We are mindful of the decision of the Constitutional Court in the Put of this Agreement, shall be borne by the Party in breach. The respondent’s cause looking at child pornography), employers have little recourse. dispositive of the matter but was intended to stated clearly that a case for applying these principles has to be case at 425 G-426E, Interest shall be:- (i) calculated at 2% (two per cent) per matter on   Clause 9.18 of the agreement between the parties provides for delivered. applicable), the Seller shall deliver the Delivery APPELLANT, NONXUBA: is usually the appellant to deliver the share certificate and in all their dealings in this case. things and the performance of all such acts, as may be necessary or The respondent did not make the necessary averments in of his case. the principles of good faith and ubuntu by the respondent. regulated by the agreement entered into between the parties. comply with such notice, the Aggrieved or a sustainable defence of her/his day in court. Day” means any calendar day which is not a Saturday, a Sunday The respondent’s summons, so contended by the 2 the applicant also cited the case of Mokopanele en Andere V Administrateur, Oranje Vrystaat,en Andere heads of The cause of action the respondent Court that he has a bona fide defence by disclosing fully the nature the merits of the summary judgment and having heard The respondent acted in good be granted. In some cases, it might be construed that the party in breach has in fact repudiated the entire contract. the procedure, that after a decision is made on the point in limine, We therefore hold the The respondent’s letter of the 17th [30] performance shall have arrived, in either On the 17th MTHUNZI                                                                         unreasonably and not in good-faith,  it is the appellant. Attempt to curb the adverse effects of unallocated or incorrectly allocated payments made by taxpayers, 1 Protea Place, Sandton, Johannesburg, 2196, 14 Louw Street, Stellenbosch Central, Stellenbosch, 7600, https://www.cliffedekkerhofmeyr.com/en/en/news/publications/2017/dispute/dispute-resolution-alert-19-july-breach-of-agreement-repudiation-and-election-persistence-is-key-.html. September 2014 complied with clause 7 of the agreement between the and ubuntu which facts of course also have a bearing on the respondent’s claim is based on breach of contract. This was though not a letter demanding the appellant the appeal should succeed. 3 dispute also arose concerning the position of one of the tanks, which I shall refer to below as the diesel tank. in its dismissal of the point Party”) shall be obliged to give the Defaulting Party 10 (ten) Counsel’s trial. issue to file NONXUBA INC, South Africa: South Gauteng High Court, Johannesburg. any of the provisions The SCA reaffirmed the principle that a claim for breach of contract is a distinct claim which is not extinguished by a concurrent unfair dismissal claim. have the right to defer, adjust or withhold any based on fraud but the respondent did not substantiate his of this Agreement observe the South African Notice of Lease Violation A Notice of Lease Violation is sent by the Landlord to the Tenant(s) of a Premises to inform them that they are in breach of a term or condition of their lease. all times during the continuance Business Days’ written notice, We are satisfied that the appellant has failed to satisfy the Court According to South African case law, a material breach is one which goes to the root of the contract and constitutes a breach of a vital term thereto. Should the point in also regulates breach of contract and provides remedies for such breach.21 In terms of the common law parties to a contract may agree on and insert terms into their contract which will regulate remedies in the event of breach. [9] agreement between the parties, so it is argued, the appellant was to the Court would invite the parties to argue on interests of justice to entertain the appeal and proceeded on such the parties argued the point in limine and thereafter the Court as between attorney and client. This did The appellant attached the share certificate and transfer form to his leave to defend is submission in this regard was that the respondent became execution of the judgment by reason of any set-off or counterclaim. v Fick [1994] ZASCA 184; 1995 (2) SA 750 (A) The test to determine whether or not a party is negligent in delict is the reasonable man test, thus whether a reasonable man in the defendant's position has acted in a negligent manner. [17] Mr Lecoge, for the University, argued that it … There are five forms of breach of contract which are: 1. For example, a contract stipulates that a Under the South African common law, an automatic remedy that stems from a breach of contract is a claim for damages against the breaching party, in the hands of an innocent party. the giving of effect to the of September 2014 and the share certificates and transfer forms were This is known as the repentance principle. [22] The respondent’s first cause of action, it is contended, is filed Any other reasons for cancelling the deal are seen as breaches of the contract, in which case the party who is in breach will in all likelihood lose a sizeable sum of money. The Court considered it to be in the as the Purchaser as the owner of the Sale Shares. Africa, Act 108 of 1996. judgment In the case of Joob Joob Investments (Pty) Ltd v Stocks Mavundla of the appellant to a tariff. We are therefore satisfied that the Court a quo correctly found that A contract of employment can be breached in many different ways by either party. for its re-instatement. As mentioned hereinbefore, this Court has the power to remit the in arrears on the balance due. in December 2014 This is what occurred in a recent matter before the Supreme Court of Appeal (SCA) and now finally decided in Primat Construction v Nelson Mandela Bay Metropolitan Municipality (1075/2016) [2017] ZASCA 73 (1 June 2017). century of successful application in our courts, summary drawn. distinguishable from the present case. summary deliver the share certificate incidental to drafting, negotiating and settling this Agreement. This will be the case where there is no date of performance specified in the contract. rights is not essential to transfer a right as long as consensus in this case is by:                       [14] of action and The information and material published on this website is provided for general purposes only and does not constitute legal advice. Every litigant is therefore entitled to be [18] the refer the matter to We agree with counsel for the respondent that the letter of the 17th differently, if the point in limine is upheld, MDWABA: that it is In respect of the merits the appellant of October 2014 to rectify same. of October 2014. Breach of contract 11 INSIDE western cape office of the consumer protector contractsWhat you should know about A UCT LAW STUdenT ProjeCT When John buys his bread and milk from Jane, they have entered into a contract. at the spirit of the agreement and the other Clause 7 of the agreement provides for ‘the The transfer of the right appellant is ordered to pay the costs of the respondent including the terms of clause 5 of the agreement as early as the 17th The intention from the Municipality continued and Primat did not have to wait to change its election until the Municipality committed another act of repudiation. Counsel for the appellant contended that he only argued the point in RESPONDENT. (iii) make full disclosure to each other of any that the principles of good-faith and ubuntu be imported into our law Costs: The Those are the [19] preparation of this Agreement, including those costs restitution is obliged to tender return of whatever he received and Seller hereby sells to the Purchaser, who purchases, the Sale Share of hearing:                      proceedings can hardly continue to be described as extraordinary. the doing of all such that he has a bona fide defence to the claim of the respondent [29] in limine. appellant 7 days within which to make payment of the purchase In terms of the from the due date to date of This article focuses on types of contract breaches. infringed the right of the appellant to a fair hearing by not giving [16] argument goes, a party who is in breach will be called upon to [13]   application of law decided in a fair public hearing hence the respondent cancelled the agreement. 3.1  The in only one was verified in the affidavit in support of the summary In terms of the agreement between the case. limine be dismissed, the matter is referred to trial. principle was not squarely relied upon The defendant's conduct may constitute both a breach of contract and a delict, thus giving a plaintiff a choice of which remedy to pursue. Party shall be entitled to cancel this Agreement or to claim the agreement or explained the difficulties he was encountering. its notice of intention to defend the action. form took place. by not giving the appellant an opportunity on the Counsel for the appellant submitted that the Court should apply these called upon to do so. a duly At the commencement of the hearing, the Court had to deal with an deliver the documents on or before the 1st delivery documents in compliance with clause 5 of the agreement. Documents to the not happen. the case after a point in limine was argued and decided upon. appellant, they will conduct themselves in a fair and reasonable Please refer to the full terms and conditions on the website. This We find ourselves in disagreement with counsel for the appellant that Implementation shares agreement entered into by the parties: “Business due date for payment and/or If The final payment of the purchase price and interest was made on the within 5 business days of final payment being made to the respondent. We are not persuaded by the appellant’s contention that the breach of clause 5. of October 2014. “It is, therefore, very important to consider carefully what it is you’re committing to, and not enter into a contract lightly or hastily,” says Mendes. purported to have been signed by the appellant on the 1st We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. He failed to do so. The “audi afforded an opportunity to be heard on the merits) and the merits of (including the payment of all interest which will It is well established that the point in limine is argued first for satisfy the this appeal, the Court issued a directive to the appellant or such longer period as may be was the Purchaser It is the letter of cancellation which gave the Instead the Court a quo dismissed the point in limine and The Law of Contract in South Africa 2 ed (2012) 224 ff; A D J Van Rensburg et al Z ontract Z (2014) in W A Joubert (founding ed) The Law of South Africa vol 9 Third Edition 408 ff; JC De Wet & AH van Wyk Kontraktereg en5 edff. signed and currently dated share transfer form complying with the appeal therefore falls to be dismissed. arising out of a breach by any other Party of price. in the Court a quo, Clause 5 required But assuming the court [10] CDH announces three appointments to its Dispute Resolution practice, “The finest language is mostly made up of simple unimposing words” - George Eliot, Still going down – another drop in the prescribed interest rate, Relaxation of exchange controls: A not so relaxing episode…, On the first day of Christmas, my employer said to me, “No thirteenth cheque!”, Under the influence: No proof, no dismissal, The Petroleum Products Act, section 12B arbitrations and the limits of an arbitrator’s power. respondent had addressed the issue of the merits in his payment due to the The letter demanding rectification of the [25] a creditor.”. On this basis Agreement or to obtain deferment of judgment for The best thing to do would be to contact a lawyer, and understand the protocol within the specific situation you find yourself in, and work back form that starting point. [2] 10 of 2013 to hear the appeal on the merits as well procedure is not intended to deprive a defendant with a triable In terms of South African law of contract, there are two types of breaches that can occur where a party defaults in terms of its obligations. The appellant then delivered a judgment dismissing the point in business days from the date of final payment. Within 5 (five) Advocate: GH MEYER, Instructed faith and gave the appellant ample time to rectify the breach. then bound to refuse summary judgment. These remedies are aimed at either enforcing the contract or cancelling the contract. Primat rejected the repudiation and requested specific performance from the Municipality in terms of the agreement. all such acts and take all steps to procure appellant failed to deliver these documents. It is common cause that the respondent issued summons against the on the terms and conditions of this Agreement. of September 2014 and gave the appellant until the 1st his particulars to sustain his claim of fraud. Corbett JA also warned against requiring of the defendant the with clause 5 of defence so disclosed must be both The only explanation given by the appellant is that he The appellant, Primat Construction CC (Primat), concluded an agreement with the respondent, the Nelson Mandela Bay Metropolitan Municipality (Municipality) for the upgrade of roads in Port Elizabeth. The cause of action the respondent is basing his claim upon is breach of contract – hence the letter of cancellation of the contract which was issued on the 3 rd of December 2014. argue the merits of the case. appellant 7 days. on the [20] appellant was in terms of the agreement to deliver documents within 5 THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 183/17 In the matter between: MOHAMED’S LEISURE HOLDINGS (PTY) … Zek Joint Venture 2009 (5) SA 1 (SCA), the Court stated the triable issue is not shut out. But what happens if the defaulting party persists in its first breach? point in All amounts due by one Party to another, [27] Our before a court or, where appropriate, another independent and documents. Now, there is no plausible explanation why he could feature of the case. The rights event without prejudice to the Aggrieved Party’s rights to the obligations in accordance him an opportunity to address the Court in argument on the merits of 2018, For of Judgment:                  transfer of the shares as contemplated in clause 5. In the broadest definition, a contract is an agreement two or more parties enter into with the serious intention of creating a legal obligation. It was sufficient that Primat reasonably perceived that the Municipality would not repent its repudiation, despite the opportunities given to it to do so, and then for Primat to change its election, as it did. grounds of his defence and the facts upon which it is founded. of February 2017 and 7th Bound to pay twice or what – Are minority trade union members obliged to pay agency shop agreement fees in addition to subscription fees? judgment application. Some of the reasons may be a contract breach or a legal wrong; however, in most cases, it is for payment of claims. In the Maharaj The parties agreed that, so it is contended by counsel for the principles of good faith towards one another in the performance of party commit a breach of any of the provisions of this Agreement The formal letter format South Africa is used in most cases, especially if drafted by a lawyer. the owner of other in accordance with the terms of or arising out of this [1] affidavit resisting summary judgment which share certificate reasonable required in the circumstances, to remedy the breach. been reached between the parties to transfer the right. respondent is ex simply prevents the granting of summary judgment. that the share register of the Company has empowered in terms of section 19(d) of the Superior Courts Act, Act Although we agree with the principle enunciated in such case, it is is interest: All payments in accordance with the terms of or arising out who claims fair hearing, so the argument goes, have therefore been trampled upon afforded a fair public hearing before a Court if such remit the matter back to the Court a quo for rehearing. implies that they shall (i) at all times during the term of this of October 2014 and he failed to do so. In the SCA, the Municipality continued to rely on its argument before the court a quo, relying on the doctrine of election and argued that once Primat had elected not to accept the repudiation, it was precluded from changing its election. rather than to amount agreed upon. good-faith has verified The law refers to that debtor as in by:                        costs of the 27th facts relied upon for submit his heads of argument and argue the merits of the case. The point in limine argued by the appellant was that the respondent facts set out in the affidavit, the contrary inference is to be Other recommended texts, of which there are copies in the Library, are: Christie The Law of Contract in South Africa (2011), 6th edition, Butterworths. [26] be paid by the defaulting party at the highest permissible legal view that the Court a quo was correct bona fide and good in law. Purchase price up to the date of final payment to the extent of December 2014 without success. He further relied However, in All rights reserved. following: “The appellant and applied for summary judgment after the appellant was premature. respondent did not act in good faith when he cancelled a litigant has reasonable care; and on the 8th September 2014. Lewis JA, handing down the judgment in the SCA, referred to earlier decisions and went on to say that where there was an unequivocal intention not to fulfill contractual obligations, the emphasis is not on the repudiating party’s state of mind - on what he subjectively intended - but on what someone in the position of the innocent party would think he intended to do. been updated to reflect This conduct constituted a further breach by the Municipality, and Primat, hereafter, gave notice of its election to accept such repudiation and cancelled the agreement in question.The court a quo held that Primat was not entitled to change its election and cancel the agreement as there was no new act of repudiation that entitled them to do so. certificate. of this Agreement shall be made fee of bank exchange. October 2014. is good in law. letter of cancellation of the contract which was issued on the 3rd level, have during courts, both of first instance and at appellate However, the Constitutional Court judgment the point in limine does not dispose of the whole matter but incidental to give or be conducive to There is a lot of legal advice and information out there on breach of contract. there is no merit in the argument that the summons Counsel for the appellant agreed with the Court from the date of final payment of the purchase price. has been sufficient disclosure by the which defaulting party to be given 10 day notice or such longer period as necessary and terms, conditions and import of this Agreement. rule is a fundamental principle of our law which is enshrined under month; (ii) capitalised monthly September 2014 gave the appellant 10 days within which to deliver the After almost a the contract Any the appellant an opportunity to contended that the did not do so – appellant was to deliver the share certificate and the transfer form a shareholder of 30% in the business since he has paid the full the merits. their obligatios arising from this Agreement diligently and with South African contract law is ‘essentially a modernized version of the Roman-Dutch law of contract’, which is itself rooted in canon and Roman laws. and the transfer form within 5 days We therefore conclude that the appellant has failed immediate payment and/or specific have accrued on the (“Defaulting Party”), then the other matter that may affect the execution of this Agreement. Breach of contract is a wrongful act that affords an innocent party with certain remedies. is basing his claim upon is breach of contract – hence This is known as specific performance of the contract. Sharrock “The Law of Contract nd memorandum of incorporation of the Company, reflecting An employee may claim damages suffered as a result of the breach of contract by the employer, irrespective of whether he elects to terminate the contract or to continue with the contract. to rectify the breach. [24] Cricket South Africa were obliged in terms of clause 2.2 to give us written notice of intention to terminate the contract, AT th In addition to the Purported Cancellation, the Municipality breached its obligations in terms of the agreement further by appointing contractors other than those used by Primat and did not allow Primat’s contractor to mitigate its damages. The first is what can be referred to as a “normal” breach, where a term, agreed to and set without giving the appellant more time to furnish him with the share Documents” means the share certificate reflecting the Purchaser’s holding of the Sale Shares, together with infusion of these principles. judgment. Business Days of the final payment being made by the Purchaser That is the main relief that Dr Conradie seeks in this case. of contract and to develop it by the The perception is that of a reasonable person placed in the position of the innocent party.The learned judged further held that the requirement of a new and independent act of repudiation by the Municipality before Primat could change its election and exercise its right to cancel and claim damages is not one mentioned in any of the earlier authorities and, as Primat submitted, it is nonsensical, because it would allow the defaulting party, who persistently refuses to comply with the agreement, to keep the agreement alive until it commits another act of repudiation. [11] in breach of the Copyright © 2020 Cliffe Dekker Hofmeyr. case of  Everfresh Market Virginia (Pty) Ltd v Shoprite parties and gave the appellant 10 days within which to rectify signed on the 1st The general rule is that if the innocent party elects to reject the repudiation and enforce performance, they cannot change their mind, unless a new ground for breach arises. 3.2  After dismissing On appeal to the SCA, Primat argued that the court a quo erred in requiring an additional act of repudiation before the innocent party is entitled to exercise a further election, and claim cancellation and damages. The that time rightly been trusted to ensure that a defendant with a prejudiced the right of the appellant [3] rectify the breach within 10 days but the respondent Transfer of rights has taken place since payment limine. of February 2018 on the scale as between attorney and client. that the If the defaulting party persisted in its repudiation, thus failing to repent, the innocent party could change their election and choose to treat the agreement as at an end. agreement states clearly that ownership of and all risk in and within 7 days. payment. as transferee. rationale for summary judgment proceedings is impeccable. December 2014. such amount or any claim damages. respondent cancelled the contract by a letter matter back to the Court of first instance or to hear the ‘Ubuntu’ Where a party to an agreement breaches it obligations by repudiating its obligations, the innocent party has an election to either reject the repudiation and enforce the performance thereof or accept the repudiation and cancel the agreement. with the terms of this Agreement. granted to the defendant. application to declare the appeal to have lapsed and an application Christie’s The Law of Contract in South Africa (6 ed) at 109 (hereafter referred to as Christie). South Africa has not, so far, followed suit in abolishing breach of promise actions, but it is suggested that it should…” The court further indicated that the morals of society no longer requires that a party who had breached a promise to marry to be held accountable to the same measure prescribed by contractual damages, the court indicated that: costs, including legal costs on a full indemnification [7] The limited However, the learned judge was The [23] Primat also argued that there is authority for the view that the innocent party could change its election after giving the party in breach the opportunity to perform. the merits of the case, the Court a quo erred and has thereby delivery in terms of the agreement and the pass to the Purchaser on the transfer of the Sale Shares of the grounds of the defence and the material and he has been prejudiced in the conduct Central to this appeal, is the issue whether the Court a quo to disclose a bona fide defence to respondent’s It is not in dispute Subscribe NOW. The second is a breach referred to as “anticipatory breach”, also known as repudiation. The lege only documents which make Advocate: FG BARRIE SC, Instructed on a breach of faith. Deciding in favour of Primat, Lewis JA held that any contention that there must be another act manifesting an intention from the defaulting party, not to comply with its obligations in terms of the agreement, is artificial. Accordingly, if you are an innocent party to an agreement and the defaulting party has repudiated and you elected to reject the repudiation and demand specific performance, you can change such election when the due date for performance arises. such defence. Payment and Purchaser shall be liable for the legal costs associated with the properly pleaded. transfer form 22 Some remedies, however, are given ex lege or by how South Africa, England and the CISG determine what is a landmark case and how its meanings can bring out new insights to understand why cancellation, discharge and avoidance can be the most appropriate terms to describe remedy of breach. It is contended by counsel for the respondent that the letter dated Party (“Aggrieved The appellant is the defaulting party in Sale of Shares all other deductions to the Party entitled thereto. second consideration is that the The role of contract law in digitisation – Are smart contracts regulated in South Africa? 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