LAW OF CONTRACTPART IIIBREACH OF CONTRACT

INTRODUCTION:

•Breach of contract was originally described as “malperformance”.

•Breach of promise to perform.

•Includes late performance (negative malperformance),

•defective performance (positive malperformance).

•Breach can be committed by debtor or creditor.

•Ex: If creditor has a duty to assist debtor in rendering his performance.

•The above can occur in the form of negative malperformance or repudiation.

Learning outcomes:• Provide a critical introduction to the nature of

breach of contract, and also shortly mention the forms and divisions of breach of contract and what they entail.

• Discuss the nature and forms of mora debitoris.• List and critically discuss the requirements for

mora debitoris.• Distinguish between the terms mora ex re and

mora ex persona.• Distinguish between mora debitoris and other

forms of breach of contract in general.• Analyze the aspect of cancellation on the ground of

mora debitoris with specific reference to the case of Kragga Kamma Estates CC v Flanagan 1995 (2) SA 367 (A).

Cases:• Ponisammy v Versailles Estates 1973 1 SA 372

(A)•  • Nel v Cloete 1972 (2) SA 150 (A)•  • Willowdene Landowners v St Martin’s Trust

1971 (1) SA 302 (T)•  • South African Forestry Co Ltd v York Timbers

Ltd 2005 (3) SA 323 (SCA)•  • Kragga Kamma Estates CC v Flanagan 1995

(2) SA 367 (A)

Study:

•Hutchison et al Chapter 12 pp. 291-297.

Nature and forms:

•The wrongful failure by the debtor to perform timeously.

•Mora: Fails to perform timeously OR timeously renders defective performance.

•Mora debitoris: Debtor does not perform at all: negative malperformance by debtor.

•Mora = delay.

•Mora can only occur if performance remains possible.

•Sometimes it would be meaningless to perform after the due date of performance: See example of photographer on p. 101.

•Mora is of a continuous nature.

•If debtor performs late, he is not omitted from his previous breach.

•Such a debtor will still be liable to the creditor for any damages.

•The mora/delay will come to an end, however.

I. Debtor must be in mora.•Ponisammy v Versailles Estates:•Facts:

•Contract contained the following clause:

•“Payment of the purchase price shall be secured by a banker’s guarantee to be furnished within thirty (30) days after approval of the diagrams of the property sold by the Surveyor-General”

•Contract of sale contained no cancellation clause.

•24 September 1970 the Surveyor-General approved required diagram.

•Appellant was only informed towards the end of November of the approval.

•This meant that the 30 days for the delivery of a guarantee had already expired when the appellant received knowledge of approval.

•On 24 November 1970 the appellant’s attorney wrote a letter to the respondent compelling the latter to deliver the guarantee by 23 December 1970.

• Early in December 1970 the respondent informed the appellant that he would not be able to deliver guarantee by 23 December 1970.

• Parties then agreed that respondent would pay R200 and deliver the guarantee by 23 January 1971.

• On 21 January 1971 the respondent informed the appellant that he was still unable to deliver the guarantee.

•Appellant then cancelled the agreement and sold the property to another person.

•Respondent claimed that there were no grounds for the cancellation of the agreement, and then finally delivered the guarantee.

•Court a quo decided that property had to be transferred to the respondent.

•Appellant argued that he had place the respondent in mora.

•Effect: “Notice of rescission” if respondent would refuse to perform.

•Decision:

•Although the appellant had placed the respondent in mora, the placing of someone in mora cannot bring about cancellation of a contract.

•Court a quo’s decision upheld.

• Ratio decidendi:

• Where time is not of the essence of the contract, but one of the contracting parties elects to make it so, giving a notice of rescission (a unilateral act), he should at least take care that the notice is clear and unequivocal, so that the other contracting party is aware of the consequences of a failure on his part to perform timeously.

II. Performance must be due and enforceable:•Performance does not become due

and enforceable before a reasonable period has lapsed.

•III. Delay must be caused by the debtor and/or his workforce.

•IV. The performance must remain possible notwithstanding the failure to perform.