Tag archives: Contract

Evidence that may be led to interpret a contract

By Patrick Bracher (ZA) on May 21, 2021 Posted in Interpretation

The dispute arose under a settlement agreement in obliging the defendants to deliver 100 000 cubic metres of “clean sand (top soil excluded)” which was “stockpiled”. It was not clean sand nor properly stockpiled and yielded only two thirds of the amount of clean sand, leading to a large damages claim. The Supreme Court of Appeal … Continue reading

A Constitutionally invalid agreement is void from inception and does not confer any rights under the contract

By Patrick Bracher (ZA) on May 14, 2021 Posted in General

A Constitutionally invalid agreement is void from inception and does not confer any rights under the contract The dispute concerned a lease for a hotel in Coffee Bay, Transkei for a period of 20 years that was held to be constitutionally invalid because the lease had been signed contrary to the laws relating to public … Continue reading

No lease renewal unless the rent is fixed by the parties or a third party

By Patrick Bracher (ZA) on July 21, 2020 Posted in General

An option to renew a lease at a rental to be agreed between landlord and tenant, failing which to be determined by a third party, was not validly renewed by the lessee offering an increased rent that was unacceptable to the landlord and then not invoking the process for third party determination. The tenant gave … Continue reading

Courts will rarely refuse to enforce contracts on grounds of public policy

By Siyabonga Mathe and Romy Allen on July 2, 2020 Posted in General

Contracting parties cannot escape the enforcement of a contract on the basis of the terms being contrary to public policy unless they can prove that the terms are so unfair, unreasonable or unjust in the circumstances that a court should intervene. The Constitutional Court reaffirmed that although constitutional values such as Ubuntu, reasonableness and fairness … Continue reading

Cancellation for breach of contract: 10 things to know

By Siyabonga Mathe on June 3, 2020 Posted in General

Cancellation as a remedy for breach of contract is only available where the parties have incorporated a right to cancel in their contract, or where the breach is of a sufficiently serious nature to justify cancellation. The contract may expressly state that if one of the parties breaches terms of the contract or fails to … Continue reading

Evidence relating to a contract: contradicting versus interpreting the terms

By Siyabonga Mathe on April 21, 2020 Posted in General

Where a contract has been reduced to writing the writing is regarded as the exclusive embodiment of the transaction and no extrinsic (parol) evidence which would have the effect of contradicting, altering, adding to or varying the written contract may be relied on. This is referred to as the parol evidence rule. The inadmissibility of … Continue reading

Effect of invalid clause within lease agreement

By Hishaam Khan and Donald Dinnie on April 2, 2020 Posted in General

The Supreme Court of Appeal held in March 2020 that an invalid clause in a lease does not necessarily result in the unenforceability of the entire agreement. Two parties entered into an agreement in terms of which the lessor let the premises to the lessee for a period of ten years and three months. The … Continue reading

Effect of settlement agreement

By Patrick Bracher (ZA) on March 11, 2020 Posted in Drafting tips

Ten years after the 2010 World Cup the Supreme Court of Appeal has given judgment in a dispute between the South African Football Association and a travel business relating to travel arrangements for the competition. The parties had a settlement agreement which was in ‘full and final settlement’ of the dispute relating to whether SAFA … Continue reading

Insurance, consensus and non-existent property

By Donald Dinnie on January 14, 2020 Posted in Insurance

The basis for contractual insurance liability is actual consensus supported by the insureds’ and the insurers’ serious intention to be legally bound to what they have agreed to. There is no consensus if there is a material mistake relating to the identity of the parties to the insurance contract, or the object of the risk, … Continue reading

Constitutional values of ubuntu and fairness are not the basis for the courts’ interference with contractual relationships

By Siyabonga Mathe on November 28, 2019 Posted in General

It has long been held that although values such as good faith, reasonableness and fairness are fundamental to our law of contract, they do not constitute independent rules that courts can employ to intervene in contractual relationships (South African Forestry Co Ltd v York Timbers Ltd). The fact that a term of a contract is … Continue reading

Nike out-bids New Balance for branded Liverpool FC shirts

By Patrick Bracher (ZA) on November 5, 2019 Posted in General

Liverpool Football Club had an existing deal with New Balance to manufacture and sell replica football shirts with their logo. At renewal time Nike out-bid New Balance’s terms and were held entitled to the contract. The question was whether New Balance had matched Nike’s offer. Nike made a detailed offer including a large number of … Continue reading

Contracting with a trust

By Patrick Bracher (ZA) on September 18, 2019 Posted in General

Where an agreement was purportedly entered into with a trust where one of two required trustees did not sign and in fact refused to do so, the agreement was void and there was no basis for an action compelling the sale to the trustee who did sign to buy the property. A signatory who warrants … Continue reading

Importing a tacit term into a contract

By Patrick Bracher (ZA) on May 28, 2019 Posted in Drafting tips

Where a non-variation clause and a whole agreement clause were included in a comprehensive contract dealing in detail with the subject matter between the parties, the court refused to import a tacit term into the contract. A tacit term is an unexpressed provision in the contract which derives from the common intention of the parties … Continue reading

Take implementation, good faith and disclosure clauses seriously

By Patrick Bracher (ZA) on May 28, 2019 Posted in Drafting tips, General

Where one of the parties to a contract had secretly entered into agreements with third parties to gain an unfair advantage for itself, the court held that it was in breach of the good faith and non-disclosure provisions and liable for damages. The implementation clause required the parties ‘to do all such things, perform all … Continue reading

Principles of contract for the benefit of a third party (stipulatio alteri)

By Patrick Bracher (ZA) on April 16, 2019 Posted in Drafting tips

A recent academic article by Dr Rika van Zyl argues persuasively that, where there is a contract for the benefit of a third party, the third party accepts the benefit of the contract between the other two parties and not to become a party to the contract. In drafting such contracts you must make sure the … Continue reading

Repudiation of a contract

By Patrick Bracher (ZA) on April 4, 2019 Posted in General

Where the purchase price of imported sugar included the import duty and the purchase price had to be reduced if the duty was reduced, the persistent claim by the seller for the unreduced amount was a repudiation and led to the lawful cancellation of the sugar contract. Payment of the sugar contract was to be … Continue reading

Acceptance of settlement offer must be unconditional

By Patrick Bracher (ZA) on April 3, 2019 Posted in General

The Supreme Court of Appeal has reaffirmed the principle that where a party alleges that a compromise (settlement) has been effected in an exchange of correspondence it must be proved that the offer of compromise was accepted. The acceptance must be absolute, unconditional and identical with the offer. Otherwise there is no consensus and no … Continue reading

Interpretation of contracts: Wording, context & purpose

By Patrick Bracher (ZA) on April 3, 2019 Posted in Drafting tips

The Supreme Court of Appeal has yet again reaffirmed the principles dealing with the interpretation of contracts. Interpretation of contracts is a unitary exercise which starts with the text to be interpreted and considers it within the contract as a whole, and in context. It requires consideration of text, context and purpose of the contract. … Continue reading

Interpretation of contracts – Don’t relegate the written text

By Patrick Bracher (ZA) on March 26, 2019 Posted in Drafting tips

The Supreme Court of Appeal has decried the growing tendency to lead evidence about what experts think a contract means and about the subjective intention of the parties and details of their negotiation. The written text must not be relegated, but must be considered having regard to the context in which the agreement was entered … Continue reading

Interpretation: Useful definition of ‘spouse’

By Patrick Bracher (ZA) on February 27, 2019 Posted in Drafting tips

The following definition of ‘spouse’ was included in recent draft legislation. The definition may be useful when you need to define the term in a contract. The definition will have to be adapted to the specific requirements and wording of the rest of the document. ‘spouse’ in relation to any person at the relevant time … Continue reading

Terms of sale can be implied by law – Meaning of ‘ex-warehouse’

By Patrick Bracher (ZA) on January 21, 2019 Posted in General

Section 59 of the Customs and Excise Act 1964 provides that the seller of goods may recover the amount of duty paid on the goods in addition to the contract price ‘in the absence of agreement to the contrary’. The fact that the sale in Starways Trading v Pearl Island Trading was said to be ‘ex-warehouse’ … Continue reading

Interpretation: Meaning of ‘in terms of’ and ‘under’ in a contract

By Patrick Bracher (ZA) on January 21, 2019 Posted in Drafting tips

In the context of a tax dispute the court held that the phrases ‘in terms of’ and ‘under’ a contract can have an ordinary or wide meaning of ‘by virtue of’ or ‘in consequence of’, or a narrow meaning requiring a direct and immediate connection between the contract and the money earned under the contract. … Continue reading

Sanctity of contracts is good public policy

By Patrick Bracher (ZA) on May 7, 2018 Posted in General

A lease was challenged on the grounds that the cancellation for non-payment of rent, after prior notice that the rent had not been paid, should not be enforceable because it was against public policy to cancel the agreement for the lease of a hotel that had been in place since 1982. Although good faith is … Continue reading

Rules of interpretation of contract

By Patrick Bracher (ZA) on April 25, 2018 Posted in Drafting tips

Clauses in a contract must be interpreted: by having regard to the language used in the light of the ordinary rules of grammar and syntax; in the context of the clauses being interpreted and the agreement as a whole; and taking into account the apparent purpose of the clauses so as to give the contract … Continue reading