7. Forms of Breach of Contract (Chap 12).docx

7. Forms of Breach of Contract (Chap 12).docx - 1 7 Forms...

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1 7. Forms of Breach of Contract Reading : Chapter 12 Determinants of rules on consequences of contracts 1. Legal policy 2. Constitution 3. Legislation Consumer Protection Act 2011 4. Customary law of contract Principle of Ubuntu Principle of harmonious dispute resolution 5. Public policy Good faith – Brisley v Drotsky 6. Fair balancing of interests of the parties 7. Romanist notions of reasonabless and fairness as developed by courts 8. Legal certainty – rules should be as clear as possible, we shouldn’t chop and change rules 9. Fosters considerations Whether a rule would tend to encourage or discourage something that is not in the interests of society. Which party is generally in a position to ascertain and guard against risks? Whether a refusal to recognize a residual rule would mean that, an innocent party would have no remedy. Ability of parties to insure against the risk of defects.
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2 Onerousness of the duty. Policy goal of coherence. 10. Rules of contract are not static 11. Rules of contract are sometimes based on trade usages (geographical area, particular business sector) they must be notorious, certain, reasonable and not contrary to the positive law. Extra-judicial dispute resolution Consider mediation before getting the courts involved – a mediator assists the parties to come to a negotiated agreement. The central question is what are the interests of the parties? Sometimes mediation does not work; you then have to look at the rights, duties and responsibilities of the parties. Introduction The parties to a contract are bound to respect their agreement and perform all the obligations that it imposes upon them – pactum sunt servanda . If either party, by an act or omission and without lawful excuse, fails in any way to honour his or her contractual obligations, he or she commits a form of breach. Remedies for Breach of Contract 1. Specific performance – have a right to claim specific performance in terms of the contract, court has an equitable discretion to refuse this on the basis of unfairness if it is too harsh. 2. Exceptio non-adimpleti contractus ( ENAC right to withhold performance ) – “defence of unfulfilled contract”. 3. Cancellation/termination of the contract 4. Damages – principle that you must be compensated for your loss.
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3 Remedies for breach are aimed at either the fulfillment or the rescission of the contract. In general, where the breach is sufficiently serious to merit rescission, the innocent party may either: 1. Uphold the contract and insist on its fulfilment by claiming either specific performance or the financial equivalent. 2. Rescind the contract and return the other party’s performance and claim restitution of any performance the innocent party may have already tendered.
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