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CONTRACT LAW NOTES

It is a legally enforceable agreement entered into by two or more different


persons with legal capacity. The parties should have serious intention to create
legally binding obligations.

Their agreement needs to be within parities

contractual capacity. Furthermore, parties should communicate such intention


without vagueness each to the other and being of the same mind to the subject
matter.

Essentials of a contract
a)

it should be lawful

b)

possible of performance

c)

within contractual capacity

d)

with the serious intention to contract

e)

union of minds of parties consensus ad idem

f)

it should not be vague

g)

intention of both parties should be communicated


-

A contract does not necessarily have to be in writing unless there


is a specific statutory requirement that it be in writing.

A verbal contract is as equally valid as a written one, provided


that the party alleging the contract can prove agreement on
certain terms.

Writing is only important for evidence purposes although its not a

requirement.
-

The presence of an agreement is determined by there being an


offer and an acceptance. This is only a general rule and does
not follow that every contract has to be constituted by a clear
offer and acceptance.

OFFER AND ACCEPTANCE


Offer

Definition
A statement by a person, called the offeror, indicating his willingness to contract
which statement is made in the awareness that it shall become binding an
acceptance by the other person called the offeree.

Case law
Green Acres Farm (Pvt) Ltd v Haddon Motors (Pvt) 1983(1) ZLR 17 (SC)
In this case the defendant sent a truck to the plaintiff with a note requesting the
plaintiff to check over the truck. The plaintiff did the checks over the truck and
proceeded to effect repairs. Upon presentation of the invoice the Defendant
refused to pay arguing that they had not requested the plaintiff to effect any
repairs. The plaintiff took the matter to the courts. The Court held that there

was no offer made by the plaintiff to repair the truck.

An offer must meet/have the following requirements


1. It must be consistent with all the essentials of the contract, otherwise it is
void.
2 .It must clearly define all the terms in which an agreement is sought.
Therefore it must not be vague, Levenstein v Levenstein 1955 (3) SA 615
(SR)
3 It must be communicated to the offeree. The offeree must have knowledge
of the offer if his acceptance is to constitute a valid contract.

Case law
Bloom v American Swiss Watch Company 1914 AD 100. It was held that there
was no offer made to the plaintiff when he volunteered the information and did
not know that there was an offer of reward money. See also Lee v American
Swiss Watch Company 1914 AD 121.
4

It must be made with intention of being accepted. This means serious


intention to create legal relations. This embraces the following:
-

it must not be mere social arrangement or offers made in gest


which lacks the animus contrahendi. See Balfour v Balfour
[1919] KB(2) 571.

It must not be binding in honour or gentlemens agreements i.e.


excluding the jurisdiction of the courts. (where the offer) it
cannot constitute a legally binding contract. (Rose and Frank
Company v Crompton and Brothers Ltd (1922) (2) KB 261.

It must not be an offer to negotiate or treat i.e. it must be an offer


to enter into a binding contract and not merely an invitation to do
business or receives offers (i.e. tenders). See Crawley v Rex
1909 TS 1105.

It may be to one definite person, or to the world. If the offer is


made to a definite person or to a number of definite persons,
acceptance should be by that person or those persons only. If it
is made to the public anyone else may accept. See Carlill v
Carbolic Smoke Ball Company 1893 (1) QB 256.

The offer must not have been revoked or lapsed.


An offer is revoked if it is withdrawn by the offeror.
The following should be noted:
-

Revokation is not effective until the offeree is aware of it.

An offer can be revoked to any stage before it is accepted

The offeror must take reasonable steps to find and inform the
offeree of the revocation Bryne and Co v Lean van Tienhoven
and Co 1880 KB.

Where an offer was accompanied by an option, the latter must not have
expired. An option is a separate contract to keep the contract open for a
specific period. The offer must be accepted within the stipulated period
Boyd v Nel 1922 AD 414.

The offer may be verbal written or implied. Thus if a person boards a bus,
the owner of a bus impliedly makes an offer to the person to ride in the
bus and the passenger accepts the offer by taking bus seat and tending
his fare.

Case law
Ferguson v Merensky 1903 TS 657 Transvaal Supreme Court) where F was
anxious to buy Ms first two farms. F wrote a letter to M in the following terms:
If you still desire to dispose of your two farms, I shall be pleased to have
your price 2nd terms.
M replied and said:
I have no objection to sell the two farms in question and as there are
coals on the farm and a railway line I will be passing near them, I ask 30
shilling per acre.
In that letter on the referred F to his lawyer with reference to the terms of the
contract. When F sued M saying that the latter had sold the farms to him, the

Court held that Ms reply to Fs letter did not constitute a firm offer from which he
could not withdraw and which F was entitled to accept Ms lawyer had written to
F declining the offer made by the plaintiff and at the same time making new
proposals. On behalf of the defendant M which the plaintiff had refused to
accept.

WHAT CONSTITUTE AN OFFER


There is a distinction between a firm offer and invitation to treat or negotiation. A
firm offer is the one which is unconditional and unqualified, it states all the terms
and the material facts on which the offer is based. It must become a contract
upon an acceptance of the offer as it stands. Thus a come lets negotiate is not
a firm offer if a shop displays an item for sale at X dollars can we say that is a
firm offer?

In the case of Crawley v Rex 1909 TS 1105 state that the

complainant, a shop keeper had advertised a sale of a particular brand of


tobacco at a very cheap price in order that he might attract the custom of a large
number of the public. He put a placard outside his shop on which the price was
shown, the Appellant entered the shop, bought the tobacco and went away.
After some minutes he came back again asked for another pound of the same
tobacco, unfortunately the complainant declined to serve the Appellant with the
tobacco and told him to leave his shop, the Appellant refused to leave the shop
whereupon he was arrested for trespass. The Appellant had argued that he had
a contract of sale with the complainant but the court thought otherwise and held
that there was no contract between the parties. It emphasized that the mere fact

that a tradesman advertises the price of the goods he sells does not mean offer
to any member of the public. It does not mean the right to enter the shop and
purchase at the displayed price. The court also held in the case that: A contract
is not constituted when any member of the public comes in and tenders the price
mentioned in the advertisement. In summary therefore display of goods at a
certain price is not a firm offer but only an invitation to treat. On the contrary, it is
the customer who makes the firm offer by presenting goods at the till and when
the shop owner accepts the offer to buy, a contract then comes into being.

Case
Carlill v Carbolic Smoke Ball Company
Where the company inserted an advertisement in the newspaper offering to pay
100 pounds to anyone who contracts the increasing epidemic of influenza or any
disease caused by taking cold after having used their smoke balls 3 times daily
for two weeks according to the printed directions supplied on each ball the
advertisement went on to say that 1000 pounds had been deposited with the
certain bank showing its commitment in the matter. During the last epidemic of
influenza many thousands carbolic smoke balls were sold as preventives
against the disease but in no ascertained case was the disease contracted by
those using the smoke balls. The plaintiff alleged, on the faith/strength of an
advertisement bought one of the balls at chemist and used it as directed three
times a day for 2 weeks but she was attacked by the influenza and she claimed

the 100 pounds reward price the court of first instance held and she was entitled
to the 100 pounds but the defendants appealed but their appeal was dismissed.
In point of law the advertisement in this case was an offer to pay 100 pounds to
any member of the public who would have performed at those conditions set out
in the newspaper. Performance of those conditions was held to constitute
acceptance of the offer. The court held further and the offer was a continuing
offer which was not important.

Case
See further Lee v American Swiss Watch Company 1914 AD 12 Dietrichsen v
Dietrichsen 1911 TPD 486.
Q.

To whom may an offer be made/addressed?


-

An offer maybe addressed to a particular person, to a group of


persons or to the world at large depending on its terms.

TERMINATION OF AN OFFER
Firstly an offer can be terminated by rejection by the offeree. It can lapse on the
expiration of fixed period within which it was meant to be accepted. If there is no
such fixed period within which an offer should be accepted an offer lapse after
the expiry of some (reasonable time).

What constitutes a reasonable time depends on the facts and


circumstances of each case
An offer can also be terminated by revocation but this presupposes/presumes
that the offer is an ordinary revocable offer as opposed to an option.
-

An OPTIO is an offer coupled with a stipulated period of time


during which the offeror is not free to revoke it.

When an option A make an offer to B and gives a stipulated time


within which he must accept to it A also is not allowed to make
the same offer to C within the same.

Thus in an option there will be two contracts/conditions to be


observed i.e. that of time and that of not having made the same
offer to another third party.

An ordinary revocable offer can simply be terminated by the offer


by revocation but before it has been accepted the revocation
must be communicated with the offeree.

Lastly an offer is also terminated by death of the offeror.

Who can accept an offer?


As far as ordinary revocable offers are concerned the general rule is that, an
offer made by A may be accepted by C or D.

Case
Blew v Snoxell 1931 TPD 226
Blew wrote to Richard Curle Ltd offering to buy a certain piece of land of a
certain piece. The land was owned by Richard Curle Ltd but by Snoxell who
indicated to Richard Curle in writing that he accepted the offer. Richard Curle
Ltd thereupon notified Blew that the owner of the land had accepted his offer.
When Snowxell later sued Blew for damages for alleged breach of contract Blew
excepted to the summons on the ground that there was no valid agreement
between him and Snoxell. The court held that, Now it is trite law (i.e. simple
legal principle), and an offer made by one person to another can not be
accepted by a third party for the simple reason that there was no intention on the
part of the one person to contract with the other.
Whatever the subject matter of the contract maybe:
-The Court held further that it was perfectly clear and the offer was made to
Richard Curle Ltd and that the plaintiff purported to have accepted that offer but
there was nothing to show any acceptance by Richard Curle Ltd. That being the
case, there was no contract on which the plaintiff was entitled to come to court
as the offer was never made to him.

Case
In the case of Bird v Sumerville and Anor, Bird signed an offer to sell land

addressed to Sumerville, Sumerville and the second respondent both of whom,


the estate agent appointed by Bird had been conducting negotiations with,
added the second respondents name as the purchaser and both signed the
agreement of sale. The court upheld Birds contention/argument that no contract
had come into existence because although he initially had no intention of calling
to a specific person, his signature of the claimant addressed to Sumerville
manifested an intention to sell to him and nobody else.

The offer was

accordingly not to open for acceptance by Sumerville and another but could be
accepted by Sumerville alone.
-

The intention of the parties runs through the whole acceptance


of contract, parties are bound to what they agreed and they are
bound because they agreed intentionally and voluntarily.

When an option is to sell for cash the offeree may cede that
option to the third party because the optional holder has a
contractual right which is regarded as property. In this regard i.e.
when the option is to sell for cash as long as cash is paid. It
does not make a difference to the offeror whether A is B, C or D
who pays the cash.

If the offeror gives credit to the offeree then that option may not
be ceded. The giving of credit involves an element of direct
personal dealing.

Case
Hersh v Nel 1948(3) SA 686(A) where Nel owned two farms and he gave Mr
West an option to purchase the two farms and the together with another person
ceded the option to Hersh who then accepted Nels offer before its expiry. When
Hersh accepted the offer Nel refused to sell the farms. When sued, the rule
made in the case of Blue v Snoxell was applied i.e. an offer made by A to B may
not be accepted by C.
-

The court however distinguished an option made in a case sale.


The sale of the two farms was on a cash transaction thus in
accordance with the principles outlined above the court ruled and
the cession to Hersh was valid and his accepted gave him a
contract with Nel.

Case
Madan v Macedo Heirs and Anor 1991(1) ZLR 295(SC)
Acceptance:
-

The acceptance of an offer must result in a binding contract and


not

further

negotiations.

An

acceptance

must

be

unconditional/unequivocal and clear.


-

A counter offer is not a valid acceptance

A counter offer is where the offeree instead of unconditionally


accepting the offer makes his or her own offer to the offferor.

This happens in a case where A offers to sale a thing to B at a

price of $5 000 then B in response to that offer from A tells A that


he is prepared to buy that thing for $4 000. Bs conduct in such
a situation constitutes/is what is called counter-offering.
-

A counter offer may also be in the form of extraneous conditions


attached to the acceptance.

The effect of a counter offer is to terminate the original offer. If


the offerees acceptance is also shrouded in ambiguity/vague it
does not constitute an acception.

Case:
Boerne v Harris 1949(1) SA 793(A)
In which the Appellant was the lessee at premises owned and leased by the
respondent. The contract lease agreement contained an option under which the
appellant could renew the lease agreement for a longer period of 5 years, the
period was to be recognised from 15 April 1947 and the option was to be
exercised by October 15 1946.

On October 5 1946 the lessees

attorneys/lawyers addressed a letter to the lessor in the following terms, We


refer to the lease in respect of the Hotel and have to advise you that our client
intends to renew the lease for a further period of 5 years from 15 October 1946
in terms therefore acceptance of the court held that the purported option was
ambiguous in that it was not in accordance with the terms of the option and
because of that the exercising of the option was held to be invalid.

Case:
Orlon Investments P/c v Ujama Investment and Ors
If an acceptance has a condition attached to it when A is not an acceptance at
all it becomes a counter offer. If the offer is not prepared to accept the counter
offer from the offeree the later can not go back and accept the original offer
originally made to him and thus there would be nothing left to accept.

Case
Water Mayer v Murry 1911 (AD) 61
Water Mayer owned the farm which Murry wished to buy. Murry wrote a letter to
Water Mayer offering to buy his farm for 1 700 pounds. Water Mayer wrote back
and said, I accept the offer to sell the farm at 1 700 provided you pay all the
expenses and 1 000 pounds is paid at the time of signing the agreement. Murry
wrote back and said, Fine, but the price is not payable at the time of signing
Water Mayer wrote back and said he was no longer interested in selling the
farm. When Murry sued Water Mayer the court ruled that Murry had no case
because he had made counter offer therefore no contract had been concluded
between the parties.
-

It must be underscored however that a request for modification


of terms is not a counter offer and it does not destroy/terminate
the original offer.

As a general rule a contract is concluded when and where

communication of acceptance reaches the mind of the offeror


(however, there are exceptions to this general rule). Thus if the
offer is communicated to the offeree by telephone in a situation
where the offeree is in Harare and the offeree is in Cape Town
the contract would be deemed to have been conducted in Cape
Town.
-

This general rule is subject to change by the parties to the


contract i.e. they may agree otherwise the offeror may decide to
do away with the need to communicate acceptance. The offeror
may also prescribe a particular mode of acceptance e.g. the
offerer may say if you wish to accept the offer send it by
registered post/ through email or at such and such an office.

Case
R v Nel 1921 AD 339
In this case the Respondent Nel had licence to sell liquor in Transvaal. He
received an order form Armstrong who was resident in Cape Town the order was
delivered to Nel in the Transvaal (is the written order) and the bottles of liquor
were then allocated to the purchaser in Cape Town. Nel was prosecuted for
selling liquor in Cape Town without licence as it was necessary for court to make
a finding as to when and where the contract of sale had been concluded. The
offeror was in the Cape and the offeree in the Transvaal.

The nature of the transaction was that the offeror had dispensed with the need
for communication of acceptance and the court concluded that the sale
agreement/contract had been sealed in the Transvaal, the moment Nel decided
to sell the liquor and he was not guilty.

Case
McKenzie v Farmers Coop Meat Industries Ltd 1922 AD 16
McKenzie applied for shares in the cooperative company the application form
read in part, I agree to accept the above number of shares or any lesser
number and may be allotted to me. McKenzie was making the offer to buy the
shares and concurrently dispensed with the need for communication of
acceptance in that he had expressed the intention that the cooperative should
on receiving his application forthwith proceed to allot shares to him. A contract
would come into existence as soon as the share transfer secretaries sing a
share certificate giving McKenzie any number of shares.

Case
In the Ujamaa Investment case the Appellant company was buying shares from
the respondents company. The parties engaged in negotiations and there were
a number of drafts exchange by the parties and the forth draft was signed by the
respondent on October 9 1984. They then sent two copies of that draft to the
Appellant under cover of a letter which read in part as follows, If it is not

acceptable, your earlier return of the agreement had a particularly interesting


clause which read as follows. This agreement shall only become of force and
effect when executed by the seller and by the purchaser.

The

appellant/purchaser signed both copies of the agreement and kept them in his
drawers. After some time the purchaser sued for the transfer of the share but
the Respondent alleged that they had not agreed on anything.
-

It should be noted that the memorandum said the respondent


was to return the agreement only if there was no acceptance and
by necessary application keep the if there was acceptance.

Clause 20 provide that the moment the purchaser signed the


agreement, it become a binding contract. In other words and
second clause dispensed the need for communication of
acceptance. The Appellant argued that they had sent two copies
so that the respondent would return one and keep one for his
records and return the other one.

However the memorandum said if the terms were not accepted


the respondent was suppose to return the papers quickly and so
it was argued that it did not say If accepted do not return them

The court held that the respondent had not dispensed with the
need for communication of acceptance and because acceptance
had not been communicated it held there was no contract.

Where the offeror chooses to use the post as the means of

communication the expedition theory applies. According to this


theory a contract is concluded as soon as the letter of
acceptance is posted. The contract is concluded before the
offeror receives the letter, let alone reads the letter. Thus there
will be a binding contract even though the letter never get into
the hands of the offeror.
-

The rationale behind this theory is that the offeror must suffer the
risk consequences of choosing a specific method of acceptance
(is communicated acceptance).

The leading case on the Expectation theory is that of:

Cape Explosive Works v SA Oil & Fat Industry 1921(4) CPD 244 where the first
defendant wrote a letter on the 10 th of July 1916 and sent it by post from
Delmore in Transvaal to the plaintiff in Sommerset in Cape Town. The letter
contained an offer to sell certain quantities of glycerine oil. On the 14 th of July
1916 the plaintiff replied accepting the offer. Then on 11 September 1916 the
second defendant of Durban sent a letter by post to the plaintiff in Cape Town
containing another offer to sell a certain quantity of glycerine oil. The letter of
acceptance was the posted on 16 September by the plaintiffs in Cape Town. In
an action of the the defendants took exception to the jurisdiction of the
court on the ground that they were not entered into in the Cape but in the
Transvaal and Natal respectively where the defendants had received the letters
of acceptance. This argument did not find favour with the court which held that
the contracts had been concluded in Cape Town where the letters of acceptance
had been posted.
-

When the offeror makes the offer by post the immediate


inference is that acceptance can also be by post so it is open to
the offeror to indicate that he will not consider himself bound
unless and until he receives the letter of acceptance.

If the offeror does not make this special provision the expedition
theory will be applied without any exception. The basis of the
rule is that by using the post first the offeror by implication
authorises the offeree to use the same method of
communication.

Case
Smeiman v Volkersz 1954(4) SA 170
The Applicant and the respondent made an option to sell some shares to the
applicant. The option was verbal and it was to remain open till 15 February
1954. On the 15th of February a lawyer acting for the applicant phoned the
respondents office in the Cape only to be told that the respondent was not in the
Cape but somewhere in OFS.
-

Applicants lawyer then quickly wrote a letter exercising the


option on behalf of the applicant. A copy of the letter was sent to
respondents Cape Town office and another to where the
respondent was thought to be.

Both copies were posted on the 15th of February but neither


reached the respondent on the date. If the expedition theory is
applied then the option had been exercised timeously but if it did
not apply, then it was not exercised on time because it had
lapsed.

The question was, Had the respondent impliedly

authorized the use of the post? Looking at the facts and what
was the appropriate method of replying? The court held that the
mere fact that parties reside at a distance does not per se
warrant the use of post, the expedition theory therefore did not
apply.

By using the post one of the risks the offeror assumes is


precisely that the offeree had an option of using a more
expeditious means of communication in respecting the offer.

Similarly, a faster means of communication would neutralize a


posted acceptance.

Case
A to Z Bazaars (Pvt) Ltd v Ministry of Agriculture1975(3) SA 468
-

The offer contained in a notice of expropriation in terms of Section 2 of the


Expropriation Act (SA) requires the offeree to signify his acceptance or
rejection of the offer of compensation. In accordance with the provision of
Section 6(1)of the Act.

This Section provided that the owner of the property in question should
deliver or cause to be delivered a statement indicating whether or not he
was accepting. Court interpreted this Section to mean that the owner was
required to physically deliver to the Ministry concerned a written
acceptance for a contract to come into existence.

There was accordingly no room for the applicant of the expedition theory.
Jansen JA said, But even under the law the question whether the alleged
agreement has been conducted by posting must depend upon particular
circumstance of each case. The Expedition Theory does not hold without
exceptions.

It is important therefore to establish the precise limits of the


application of the Expedition Theory.

Thus the judge emphasized that it is not clear that all whether
the Expedition Theory, mainly condemned for the protection of
the offeree, should necessarily produce the possibility of a
neutralization of the posted acceptance before it is received by
the offeror.

MISTATE AND QUASI-MUTUAL ASSENT


N/B First there must be offer and acceptance (i.e. in the formulation of a
contract).
-The second requirement that ought to be present is that of agreement of which
can either be actual apparent. As regards actual agreement there has to be a
meeting of minds of the parties involved in a coincidence of wills. This is
referred to as a consensus ad idem on the subjective theory.
-What it means is that if the terms of the contract are different as known by A
and B then there is no contract.

Case
Jordan v Trollip (1960) (1) PH 825
-In a Robert AJ reiterated Wessels train/trial of thought that in order to determine
the existence/otherwise of a contract. It is the manifestation of the parties wills

and not the unexpressed will which is of importance.


-This point was further emphasized in the case of Jones v Anglo African
Shipping Company 1936 (1972) SA 827 of 834, where the court held that, In the
interpretation of a contract the general rule is that the court should determine
what the true intention of the parties was.
-As regards apparent agreement it has come to be accepted that a contract can
also come into existence in the absence of actual agreement. If one of the
parties conducts himself in a manner that make the other party believe that he is
agreeing to a proposed term of contract. This is referred to as Quasi Mutual
Assent or the objective theory of contract.
-The doctrine of Quasi Mutual Assent was clearly articulated in the case of Smith
v Hughes (1871) 6QB 597 of 607 where Blackburn J had this to say, If whatever
a mans real intention maybe he so conducts himself and reasonable men would
believe that he was assenting to the terms proposed by the other parties terms.
-This is sometimes referred to as Agreement by conduct.
-The following relevant factors must be taken into consideration when dealing
with matters relating to Quasi Mutual Assent:
(a)

has A instead of B into believing that he is prepared to contract on


terms a, b, c if the answer is no then the court should consider the
following question

(b)

Was Bs belief reasonable? If the answer is Yes then there is a


contract as understood by B on the basis of Quasi Mutual Assent.

-Courts have often asked this question, Is there any difference between Quasi
Mutual Assent and Estoppel?
-Before addressing the question it is imperative to define what estoppel is.
-Estoppel is a general principle of law whereby, if a person either negligently or
fraudulently misrepresents facts and another relies on the misrepresentation to
his detriment the person making the misrepresentation is prevented from
ascertaining and providing that the true state of affairs is different.
-For a person to establish estoppel he has to prove the following four factors:
(i)

That there was a misrepresentation (i.e. either negligent/fraudulently).

(ii)

That there was fault on the party of the representor either in the form of
negligence.

(iii)

That the other party relied on the misrepresentation.

(iv)

That there was detriment which was caused by a reliance upon such
misrepresentation.

Differences between Estoppel and Quasi Mutual


1.

Estoppel can only be relied upon as a defence and not a cause of action
whereas quasi mutual assent can found a cause of action

2.

Quasi mutual assent does not require fault, fraud and detriment to found a
claim. Instead there should only by misrepresentation and a reliance on
misrepresentation which reliance need not be detrimental.

Case
Stanbik Finance Zimbabwe Ltd v Chivhungwa 1999(1) 262 HC
Spesbona Bank Ltd v Portals Water Ltd SAPDY Ltd (1983)1978
NB

Not only does the courts confine themselves to the four corners of the

contract but at times they go further in looking at the particular conduct of the
parties as they/at the time they entered into the contract (i.e. objective approach
of which may include either representation by one party)
NB

Freedom of contracting i.e. within the confines of the law.

3.

Animus contrahend: it refers to the intention to create legally binding


obligations when an offer is accepted.

-It is the yardstick (i.e. AC) that usually distinguishes a contract from social
agreement. It is important to note that our courts have derived agreements into
two categories in order to ascertain legal effects, these are commercial
transactions and social arrangement.
Social arrangements: It is true that social arrangements are not meant to be
legally binding unless there are special arrangements which allows for that.

Case
Balfour v Balfour
The plaintiff was the wife of the defendant. The defendant was employed in

Ceylon. When the plaintiff went there she decided that she did not want the
weather there and opted to stay in England instead. The defendant offered to
pay her 100 pounds as maintenance periodically. The defendant then flouted
the promise and plaintiff sued him for maintenance on the basis of the
arrangement they had made. The courts dismissed the claim on the ground that
by holding that this was a social arrangement which did not create an intention
to be legally bound.
Case
Jones v Padabaton 1969 2 ALL ER 166
Commercial transactions: these are presumed to create legally binding
obligations. However, some commercial transactions can specifically exclude
animus contrahend by what are called honorp clauses.
An honor clause specifies that an agreement is only supposed to be binding in
honor and not give rise to any legally enforceable obligation. This position was
confirmed in the case of Electronic Building Elements v Huang (1992) 2 SA 384
of 387 where Levy AJ held that if the parties choose to exclude from legal
enforceability any arrangements arrived at between them, it can then become no
more that a moral obligation or an obligation of honor but unforceable in court of
law.

Rose and Frank Co v JR Crompton and Brothers Ltd and Anor 1923 2 KB 261
Possibility to person: An agreement cannot be deemed to be a contract if the
performance of the obligation is impossible . This position was captured in the
case of: Peters, Flamman and Co v Kokstad Municipalities where the court held
that by the civil law a contract is void if at the time of its inspection its
performance was impossible. This rule/principle is however subject to the
following qualifications.
a)

The impossibility must be absolute as opposed to probable.

b)

The impossibility must be absolute as opposed to relative

c)

The impossibility must not be fault of one of the parties to the contract

NB

Parties should not agree upon anything unlawful nor outside human

capabilities

Formalities
In Zimbabwe contracts need not be reduced into writing unless there is a statute
that specifically provides so e.g. section 5 of Hire Purchase Act provides that a
hire purchase agreement must be reduced into writing.
Similarly Section 7 of the Contractual Penalties Act provides that an installment
sale of land must be reduced into writing.
Section 47 of the Companies Act provides that a pre-incorporation contract must
be reduced into writing.
NB

The reason why there is such emphasis for reducing contracts into writing

is for evidential purposes and it is also easy to decide on any case involving
contracts put into writing (i.e. any document speaks for itself and thus it will be
easy to see what is/want is not included in the terms of the contract).
5.

Contractual Capacity

For an agreement to valid the parties to a contract must be legally entitled to


enter into such agreements. In Zimbabwe the law has divided persons into
artificial persons and natural persons.
Artificial persons: this refers to companies and private business organisation
and sometimes state cooperatives.
Companies for a companies to enter into an agreement it must be represented
by a natural person who is empowered by its Articles of Association to enter into
contracts on behalf of the company.
Also the contract itself must fall within the parameters of the memorandum of
Association.
NB Thus if contracting with any company one should check on the above two
requirement otherwise the contract would be deemed and void.

Partnership
As regards a partnership the capacity to contract is found in the partnership
deep. However, it is generally accepted that any partner can enter into a
contract on behalf of the partnership if the contract furthers the interests of the
partnership.

Natural Persons
In Zimbabwe the legal age of majority is 18 years and any person who has
reached that age can enter into a binding contract. The following people are
disqualified from contracting:
a)

Manors: this refers to people who have not reached the age of legal
majority and are not tacitly emancipated.

b)

A minor does not have contractual capacity at all unless he is assisted


by guardian. The reason for this was established in the case of
Edelstern v Edelstern (1952) 35A1 at 11g where the court held that In
Roman Dutch law the judgment of a minor is considered immature
turn-out his minority and he is consequently not bound by his contract
As a general rule children below the age of 7 do not have contractual
capacity at all this means that the only contract that can bind them is
that which was made by his guardian on his behalf.

It is important to note that if a minor entered into a contract with a major


unassisted by his guardian such a contract is called a Limping contract i.e. The
minor will not be bound by the terms therefore but the major will be bound.
This position was well captured in the Edelstern case at p13f where the court
held that Voet explains that in all contracts in which mutual obligations are
assumed the guardians assistance is necessary, failing with the contract limps.
The other party to the contract is bound by it. If that appears to be in the interest
of the minor the minor on the other hand is not bound by the contract but may

resile from it.


If the minor wishes to enforce the contract he will have to perform his
understanding. This seems self evident. For he will either sue, assisted by his
guardian or when he has attained his majority either of which will imply
ratification of the contract.
NB

However there are circumstances in which a minor can be bound by a

contract which he enters without the assistance of the guardian. The minor that
can be bound are follows:
a)

Tacitly emancipated minor i.e. refers to one that is either living apart
from his parents or living with them but paying for their upkeep.
Carrying out his own trade or generating his own account.

b)

The Marriages Act provides that when a minor gets married she can be
allowed to enter into binding contracts without the assistance of the
guardian. In this respect such a minor can be referred to as a tacitly
emancipated minor see case: Dickens v Daley (1956) 2 SA11.

c)

Marriage on its own confers majority on a woman

d)

Tacit emancipation is usually relied upon for children between the ages
of 14 and 18 and marriage as for girls is recognised at law as from the
age of 16 years.

e)

A minor can be bound if at the time of contracting he misrepresents his


age to the other party or misrepresents his age to the other party
misrepresents that he has/had been given the guardians consent
when in assence he has not been given such.

Fouche v Battenhausen and Company (1939) CPD 228


A minor can be bound if he is unjustly enriched unjust enrichment. In this regard
occurs when a minor unduly benefits from a contract with major. Here he is
obliged to restore the things that he has benefited.
However in a bid to protect minors the courts have restricted the extent to which
the minor should restore the things that he has benefited.
It is true that a minor can only restore the things that are in his possession at the
time when the suit of unjust enrichment is instituted.

This position was

understood in the Edelstern case where the court held that the other exception
is that a minor is under an obligation/is obliged to make restitution to the other
party to the extent to which he has been enriched. However the minor is not
obliged to restore whatever he has received pursuant to the contract but only so
much as still remains in his possession at the time of the action or the
surrogates of such residue.
a)

When he ratifies the contract upon majority/when his guardian ratifies the
contract and the minor entered into the effect of such a ratification is to
render the contract valid and effective from the time of the purported
agreement.

Stuttaford and Company v Oberholzer 1921 CPD 855


NB

The building effect is ratification will have a retrospective effect that is from

the time the minor entered into a contract.


In Zimbabwe boys under the age of 16 years should get approval from the
Minister responsible for marriages for his marriage to be regarded as a valid
marriage.

Married women
b)

Their capacity depends on the type of marriage that they enter into. There
are basically two types of marriages namely:

(i)

Marriage in community of property: here the husband and the wife own

the property jointly and is referred to as a joint estate. The husband is the
administrator of the marriage estate and he can enter into any contract in
respect of that estate without the consent of the wife but the wife cannot enter
into a contract in respect of that particular estate without the consent of the
husband, the only exception is when the wife enters contracts in respect of
necessacive and (i.e. day to day basic necessities e.g. food.
Amendment No.17 of the Administration of Estate Acts come with the ruling in
Magaya v Magaya of which did away with the concept of perpetual minority of
the women.
(ii)

Marriages out of community of property: under this institution the husband

and the wife own the property separately and the wife can enter into any
contract without the consent of the husband.
In H v H it was held that a husband can not at law rape his wife. In Zimbabwe
marriages are presumed to be out of community of property unless parties enter
into an Ante-nuptial contract.
However, there has been a question of whether or not customary marriage are
in/out of community of property. This issue was however addressed in the case
of:
Jena v Nyemba 1996(1) ZLR 138 where the court held that, even though the
very nature of a customary marriage reveals that it is in community of property,
the promulgation or enactment of the Legal Age of Majority Act (i.e. LAMA)
conferred majority status on women that are married customarily.
What this means is that such women enter into a valid contract without the
consent/assistance of the husband.
c)

Insane Persons

Sometimes referred to as imbeciles. The general rule is that any party who
suffers from a mental illness or incapacity at the time of contracting has no
contractual capacity at all. This position was captured in the case of Lange v
Lange (1945) AD 33 of 341 where the court held that, It is clear of course, that
if, owing to a mental disease, a contracting party does not understand or
appreciate the nature of the matter the contract will be void of the inquiry of the
court usually makes in case of insanity was crystalised in the case of: P v Warne

1922 AD 481 at 488 where the court held that, A court of law that is called upon
to decide a question of contractual liability depending upon mental capacity must
determine whether the person concerned was or was not at the time of
managing the particular affairs in question is whether his mind was such that he
could understand and appreciate the transaction into which he purported to
enter.
d)

Intoxicated Persons

As a general rule an intoxicated person lacks contractual capacity. As with


insanity, the question is whether the party in question was so intoxicated as to
be unable to reach consensus and not merely whether his judgment was
affected. Case Essakow v Galbraith 1970 OPD 53.
e)

Insolvents

An insolvent is a debtor whose estate is subject to a sequestration order owing


to his inability to pay debts. As a general rule insolvents can only contract
through their trustees.
f)

Prodigals

A prodigal is a person who is declared by the court to be incapable of managing


his affairs as a result of a propensity to squander his property e.g. a spend-thriff
is not allowed at law to enter into a contract in respect of his property without the
assistance of a curator.

6.

CERTAINTY

For a contract to be valid it must be certain and where it lacks certainty such a
contract is referred to as a contract void for vagueness and it does not constitute
a contract at all. When parties enter into a contract there must be sufficient
content for the court to enforce a particular contract.
Where detail/content is lacking such a contract can be deemed void for
vagueness. The requirement of certainty is reflected in the rule of offer and
acceptance must result in certain terms. Uncertainty may rise in a number of
different ways. It is often extremely difficult to establish whether or not the
uncertainty is such as to vitiate the transaction.
At the end of the day each case depends on its own facts.
In Levenstein v Levenstein 1955(3) SA 615 where in an answer to the plaintiffs
claim for an ejectment order the defendant pleaded that, In or about April 1946
a verbal agreement was concluded that Salisbury between plaintiff and
defendant in terms of which the plaintiff undertook, in consideration of/for the
understanding by the defendant hereinafter mentioned to give; and transfer to
the defendant the said number 977 and the said business. The defendant in
turn understood to maintain the plaintiff to the best of his ability during the
remainder of her life, and further undertook to maintain and educate, till such
a time as she was capable of maintaining herself. The plaintiff excepted to this
plea on the grounds that the agreement was void for vagueness and was

unenforceable. The word business was ambiguous and the words to maintain
the plaintiff to the best of his ability were uncertain to be capable of precise
definition. In the same case, it divided contracts void for vagueness into four
categories:
(i)

Contracts and are incomplete: On such cases the so-called contract is


not enforceable e.g. In King v Potgieter 950(3) SA 7 where the
plaintiff sued the defendant on a deed of sale. Defendant admitted
having signed it but contended that it was void for vagueness. Reason
for this was illustrated in clause 2 of the agreement which provided
that, The purchase price is 2 750 pounds payable by the purchaser to
the seller as follows; 11,45 pounds per month as from as from as
and from the 1st day of . the purchaser should be liable for
interest at the rate of 5%. Again clause 3 of the same agreement read
Possession of the property shall be given to the purchaser on .
The plaintiff argued that in reading these clauses the court has to
consider the element of reasonableness i.e. the interest should be
payable within a reasonable time, the court dismissed this agreement
and ruled in favour of the defendant because it was not clear from what
date instalments were payable where the interest was due to be
calculated and when the purchaser was to be given vacant possession.
As a result the court deemed the agreement to be void for vagueness.

Contrast with Blundell v Bloom 1950 2 SA 629 it was involved with a contract

of sale which had many blank spaces e.g. A provided, I agree to pay the sum of
., as deposit immediately on signing the agreement. When the plaintiff sud
the defendant argued that the contract was void for vagueness because it was
incomplete but the court however thought otherwise and held that the deposit
was a term which could be waived by the seller as long as the purchase price
was agreed.
It was well established that an agreement which is incomplete because the party
or parties did not reach an agreement/consensus on an essential/material
aspect for vagueness and incapable of being enforced.
Schneider and London Ltd v Bennett 1927 TPD 346 where the Respondent had
been employed by the Appellant as the manager of their timber company. They
agreed on a monthly salary of 49 pounds and a small commission to be agreed
between the parties but never agreed on the quantum of the commission. When
Bennett was dismissed, he sued for the commission arguing that he was entitled
to a fifth of the turnover of the company because this was reasonable. The court
however rejected his argument and held that the phrase small commission was
not sufficient to give rise to a contract in Bennetts situation. There was of cause
an agreement but the court was not in a position to enforce the agreement.
Contracts which give unlimited discretion to the persons bound thereby e.g.
Scaurnel v Ostern 1941 AC 257 where the Respondent bought a van from the
Appellant. A deposit was paid and the outstanding balance was to be paid over

a period of 2 years.
Court held that the time period for payment of the outstanding amount was
unnecessary long and the contract was therefore void for vagueness.
In Kantor v Knator 1962(3) SA 202 Before the plaintiff and the defendant got
married and they entered into an Ante nuptial contract. The husband made an
undertaking to buy his wife all such furniture, linen and domestic effects as may
then or thereafter acquire at such time or such quantity Upon marriage the
husband failed to fulfill this and the wife brought a legal action against him.
Court held that the husband was not bound to do anything because there was
unlimited discretion.
Courts have devised the 4th class of cases where the unspecified details of the
contract are questions of fact which are capable of determination by evidence.
Angath v Munckunlal Estate 1954 (4) SA 695 where the plaintiff was the
Defendants nephew. Defendant had invited plaintiff to assist in his shop and
plaintiff was supposed to be paid something sometime. This meant that there
was no agreement on plaintiffs salary. However the defendant died before
paying the plaintiffs anything and plaintiff sued Defendants estate. The court
held that the plaintiff was to be awarded what the court considered as
reasonable remuneration for his services..
Contrast with Ellite Electrical Contractors v The Coveed Wagon Restaurant
1975(1) SA where the Respondent had hired the service of the Appellant.
Parties had not agreed on a particular price and when the Respondent received
a bill from the Appellant he ignored it. The Appellant then sued for payment.

Court held that although there was no agreement on the price there was an
implied agreement to pay a reasonable amount of money for the work done.
The court was to rely on the reasonable element to give content to the contract.
Court also looked for characteristic evidence in determining the price that was
payable.
It is clear from the above cases that when courts are faced with contracts that
are purportedly void for vagueness they have a tendency of leaning towards
enforcing a contract rather than striking it down. This is in a bid to try it down.
This is in a bid to try as much as possible to preserve, sanctity of contract.
Whilst this approach is commendable it can be argued that the Supreme Court
stretched it too far in the case of Labin and Anor v Associated Packing Company
1996(1) ZLR where the third Respondent owned shares in the first and 2 nd
Respondents companies which he sold to the Appellant. The parties started
negotiating and finally made a draft agreement which stated that it was subject
to the signature of both parties. They agreed on the price and method of
payment. It was stated that the money had to be paid in a way that was tax
advantageous to the seller. It was then left to the accountant to do his work.
The document was sent to the third Respondent for his signature who then
refused to sign it and the contract could not go further. The High Court was not
vague at all even the parties had not agreed on an amount that was tax
advantageous to the seller.

7.

LEGALITY

For an agreement to be binding it should comply with the law. However there
were instances when a contract violates the law. Such a contract is deemed to
be illegal and unenforceable. Illegality comes in two forms:
(i)

statutory illegality

(ii)

common law illegality

Statutory illegality: Occurs when an agreement contravenes a piece of


legislation either in the form of a statute or statutory regulation or by-law. Such a
contract is null and void.
This position was underscored in the case of Schlerhant v Minister of Justice
196 AD 99 at 109 where the court that It is a fundamental principle of our law
that a thing done contrary to the direct prohibition of the law is void and of no
effect Contracts that are illegal by virtue of an express statutory provision pose
no problems because one simply has to read the statute and apply it to the facts
of the alleged contract, no important legal issues arises where illegality arise
from statute.
See case Patel v Sigauke and Anor HC HH-55-1994
Wilken v Kohler 1913 AD 1351 it was important to note that where a contract
contravenes a statutory enactment which does not expressly declare the

contract void, the intention of the legislature must be asserted.


However, instances do occur when parties (conscious of the statutory
prohibition) draft their contract in such a way as to circumvent the statutory
provision. Such contracts will be held to be illegal.
Zimbabwe Care v Grain Marketing Board SC-214-92.
In addressing the courts approach to these contracts of the case of
Dadoo v Krugersdorp Municipality Council (1920) AD 530 at 543-8, Court
adopted a three pronged approach:

(i)

The court must interpret the statute in the ordinary way not during
violence to it to the extent its meaning to cover its supposed intention.

(ii)

The courts must then determine whether or not the contract in question
falls within the armpit of the statute.

(iii)

If it falls within then cadit queastio [end of story]

(iv)

Then if it falls without the armpit of the statute, then out the court
should proceed to inquire whether or not the said contract has been
craftly designed to circumvent statute.

At page 47 of the Dadoo decision the court held as follows:


An examination of the authorities therefore leads me to the conclusion that a
transaction fraudem legis. [i.e. illegal by virtue of contravening a statute or
legislation] where it is designed to escape the provisions of the law but falls in
truth within these provisions.

Thus the rule is merely a branch of the

fundamental doctrine of the law regards, the substance rather than the form of
things.

COMMON LAW ILLEGALITY


This refers to contracts that are contrary to public policy/common law/good
morals. Acquilius [Roman Dutch Schdar] defines public policy as:
One stipulating performance which is not pose illegal or immoral but which the
courts, on the grounds of expedience, will not enforce because performance will
detrimentally affect the interests of the community.
Generally a contract is said to be contrary to public policy if it is clearly
detrimental to the interests of the community and runs counter to social
economic expedience. The position was underscored in the case of Sasfin (Pty)
Ltd v Beukes 1989(1) SA(1)(A), where the court held that:
Agreements which are clearly detrimental to interests of the community whether
they are contrary to law or run counter to social or economic expedience will
accordingly on the grounds of public policy not be enforced. No court should
therefore shrink from the duty of declaring the contract contrary to public policy.
If it is clearly detrimental to the interests of the community/is contrary to law or
morality/runs counter social or economic expedience is plainly improper and
unconscionable and unduly harsh and oppressive,.
It is important to note that the (iv) fourth criteria is not sharply defined especially

when it is remembered that public policy is a question of fact and not a question
of law and it always changes with the general sense of the justice of the
community or the ban mores manifested in public opinion.
Professor Christie convincingly argues that a distinction must always be drawn
between superficial public opinion which can swing like a weather and seriously
considered public opinion on the general sense of justice and good morals of the
community. It is the later and not the former to which the courts should direct
their attention and this limitation coupled with criteria (i) and (iii) above maintains
the stability of the law of contract by ensuring that contracts are not at the mercy
of jickle public opinion. Words like clearly detrimental to the interests of the
community and runs counter to social/economic expedience must be relied on
sparingly and only in the clearest of cases.
NB

At the end of the day what determines the public policy of the day is the

philosophical outlook of judges presiding over the matter and this overstretches
the position/power of the judges.
The following contracts have come to be accepted contrary to public policy.
a)

Contracts tendering to injure the public service

Roman-Dutch law did not permit any contract in the nature of a bribe to a public
official or which bound him of corruption and intrique or which corruptly secured
a promise of advancement, employment, office or any other advantage the main

difficulty with a corrupt contract with a public official is that he undertakes to


exercise the discretion vested in him not in accordance with his public mandate
but for an oblique motive such as personal gain or a sense of obligation to a
suitor, such contracts are void and unenforceable.
b)

Contracts injurious to the administration of justice examples are as


follows:

(i)

ousting of the jurisdiction of the courts. Parties to a contract are neither


allowed to deprive the courts of their normal jurisdiction nor confer the
jurisdiction up on a court which that court does not possess. In terms of
either common law/statute this position was emphasized in the following
cases.
Schierhart v Minister of Justice 1925 AD 41 at 424 where the court held If
the terms of an agreement are such as to deprive a party of his legal
rights generally or prevent him from seeking redress at any time in the
courts of justice for any future injury or wrong committed against him,
there would be good grounds for holding that such an undertaking is
against the public law of the land.
Gold Schmidt v Folip (1974) 1 SALR 576 where the court held that:
Private individuals cannot confer jurisdiction on the court which they do
not possess in terms of the common law/statute, nor can they impose
tasks upon the courts which they are not legally obliged to perform.
However, this principle does not apply to arbitration and honour clauses.

(iii)

Collusion this was defined in Bevin v Bevin. Court held that ordinarily
speaking collusion in our law is a keen consiance and means that an
agreement or mutual understanding between the parties that the one
shall commit/pretend to commit an act in order that the other may
obtain a remedy at law as for a real injury. Such agreements are
illegal and unenforceable.

(iv)

Contracts encouraging crime delict and other unlawful acts. These


contracts are void and not enforceable. It will be hopelessly self
contradictory if courts treated a contract to commit an unlawful act as
enforceable because the court would be approbating or reprobating the
same act, blowing hot and cold.

(v)

Contracts injurious to the institution of marriage


Examples of these are contracts and encourage/facilitate polygamy or
in a monogamous marriage.

(vi)

Miscelleneous Contracts. Examples are gambling, contracts to commit


acts of sexual immorality of contracts to defraud creditors, contracts
lending to produce forced labour, pactum successorium [i.e. a contract
whereby a person curtails his freedom of testation writing of a will
by promising to bequthe or not to bequeth property to the promisee or
to a third party]. These agreements are not enforceable.

(vii)

Covenants in restraint of trade


Covenants in restraint of trade are important to the world of commerce.

A person may limit his freedom of carry out business or to be involved


in business by way of a covenant in restraint of trade.
Book v Davidson 1988(1) ZLR 365(S)
Book v Davidson 1989(1) SA 638(25)
Mangwana v Mparadzi 1989(1) ZLR 97(S)
Ellis 1984(4) SA 874(A)
The reason why covenants in restraint of trade are invariably employed in
contracts of employment is because the covenants (i.e. the employer) will be
seeking to protect.
(i)

his goodwill

(ii)

his client

(iii)

his business

In the case of Magua and Research (SA) Pty Ltd v Ellis is the locus classicus on
covenants in restraint of trade.
Principles draw from this case are:
(i)

a covenant in restraint of trade will be presumed to be reasonable


unless the party wishing to escape from it can show it to be
unreasonable.

(ii)

The onus to prove the unreasonableness of the Covenant lies with


employee covenantee.

(iii)

The unreasonableness or otherwise of the Covenant is a matter to be

decided on the facts of the case (i.e. circumstances of the case)


(iv)

The facts circumstances to be considered are the facts and


circumstances prevailing at the time of enforcement of the Covenant.

The Blue Pencil Test


When a restraint is to be reasonable it is sometimes possible to enforce the
restraint in party by cutting the unreasonable part (or rather by restricting the
Covenant to the reasonable party).
New United Yeast Distributors v Brokes 1935 WLD at 75
Where brookes and other yeast merchants formed a company to distribute yeast
products. Brookes was bound by a Covenant in restraint of trade prohibiting him
from having an interest in any other business involved in yeast production. The
Covenant proceeded to restrict him from having any interest in any company or
business whose objectives were similar to those of the proposed company. The
court held the striking down the unrealistic part of the Covenant can only take
place if the contract posses the blue pencil test. The Blue Pencil test states that
as . can only take place if the clause/Covenant passes the blue pencil
test i.e. the test of making grammatical sense after removing the offending part
of the Covenant with no words being added to the restraint must still carry
grammatical sense. The blue pencil test only arises in relation to the changing
grammar of the clause.

VOID AND VOIDABLE CONTRACTS


The absence of any of the discussed above aspects said to be requirements of
a valid contract means that the contract is void. Thus a void contract is the
opposite of a valid contract.
A voidable contract is whereby a contract is valid because it has all the
requirements of a valid contract but one of the parties may dispute the contracts
on any one of the additional points i.e. misrepresentation, duress, undue
influence and mistake.

Void Contracts
Are of no legal force at all. It is a contract which lacks any one or more of the
essentials of the valid contract. In the eyes of the law the contract is a nullity.
Restitutio in intergrum i.e. restitutution remedy. This simply means in both
parties return to their original positions.

Voidable Contracts
It is a valid contract in that it satisfies all the requirements of a valid contract
serve for the fact that the innocent party to the contract has the right to set aside
the contract if he so chooses.

MISREPRESENTATION
Is a factual statement concerning a certain state of affairs but is not true (it
however must be material). A misrepresentation is a statement made by one
party to the other before the time of contracting; the statement must be material
i.e. of much importance), factual and relates to the subject matter of the
contract. Further the statement must induce the other party into a contract (i.e.
must have relied upon it).
A contract which is induced by misrepresentation is voidable. There are 3 types
of misrepresentation:
(i)

Innocent misrepresentation i.e. misrepresentation made in honest


belief that a statement is true.

(ii)

Fraudulent misrepresentation the statement made by a party


knowing fully that it is untrue or are made recklessly

(iii)

Negligent misrepresentation a statement made in belief that it is true


but the circumstances of the contract demonstrate that it is untrue.
Once there is a misrepresentation a question obviously arises.

Viljoen v Hillier 1904 TS 312


The case lays out the requirements that the innocent party must satisfy in a
claim for misrepresentation:
(i)

that a false representation was made

(ii)

it must be material

(iii)

that the innocent party entered into the contract in the faith of
representation.

The innocent party who establishes the three elements set out above is entitled
to rescind the contract whether or not the misrepresentation is innocent,
fraudulent or negligent. Rescission leads to restitution in integrum. Through
rescission one would be taking the contract to the state of being void and thus
restitution in integrum will be automatic and then finally leading to damages i.e.
with

voidable

contracts

but

such

damages

differ

with

negligent/fraudulent/innocent misrepresentation.

By whom/who can make a misrepresentation?


In a nature of things a misrepresentation is made by the other party to the
contract but it may also be made by the agent of the other party. The principale
who is the party to the contract is however liable for any misrepresentation made
by his agent.
A misrepresentation by a third party is not actionable

Who can make a misrepresentation?


Lamb v Walters 1926 AD 358
In this case the seller of a house assured the buyer/purchaser that the price was
fair and reasonable. The buyer was not permitted to rescind the contract when
he discovered that the price was considerably more than the house was worth.
This case raises the debate between a representation and an opinion.

The law defines misrepresentation with some care in order to fit in which the
realities of life. People do not usually assume that somebody elses opinion is
unquestionable and the law does not treat an expression of an opinion that
tends out to be untrue as misrepresentation.
But as will be noted in the case of Feinsten v Nigglian the expression of opinion
by a party knowing it to be false amounts to misrepresentation in that the opinion
is a false statement of his state of mind.
Feinstein Niggli where the court held that fraudulent misrepresentation in the
form of an opinion/forecast of future success of a business may amount to/rather
is actionable.

Misrepresentation by Silence
In Speight v Flass (161)(1) SA 778 it was said:
there is in our law no general duty upon contracting parties to disclose to each
other any circumstances/facts known to them which may influence the other
party in deciding whether to conclude the contract. In particular circumstances
the law requires the truth to be revealed. In those circumstances silence will
amount to misrepresentation. In contracts such as insurance; partnership and
agency (contracts uberrima fide (i.e. utmost good faith).
Apart from those particular contracts an attempt to lay down a broader duty to
disclose was made in the case of Pretorious v Natal South Sea Investments
Trust (1965)(3) SA 410 where P successfully applied for shares in the

company in ignorance of the fact that the directors had bound the company to a
very burdensome contract (oppressive contract). He sought to rescind the
contract on the basis that the directors had not disclosed the burdensome
contract. The court held that there was a fraudulent misrepresentation by
silence in that the directors had failed to disclose a material fact which was in
their exclusive knowledge.
Thus every case is determined on its facts and circumstances (i.e. in
determining whether there existed an obligation to disclose).

Misrepresentation must induce a contract


A misrepresentee is not entitled to rescind a contract unless the
misrepresentation induced the contract. The misrepresentee must go further
and show not only that he was induced and any other reasonable person would
have been induced (i.e. under the same facts and circumstances). It will not
avail the misrepresentor and the mispresentee could have easily discovered the
truth.
Wiley v African Reality Trust 1908 TH 104 where a lawyer bought some
debentures (i.e. a loan by an outsider to the company). It was misrepresented
to him and after 10 years, he had an option to surrender the debenture in
exchange for either land, a house or cash. From the wording of the debenture it
was such that he would have to accept land with no option for cash. He sought
to rescind the contract alleging misrepresentation. He sought to rescind the

contract alleging misrepresentation. The contract was rescinded.

The Misrepresentatees right rescind


Misrepresentation does not destroy that contract altogether (A makes the
contract voidable) at the instance of the innocent party. The significance of
classifying a misrepresentation as fraudulent negligent/innocent is to enable the
party not only to rescind but to claim damages.
Under negligent and fraudulent misrepresentation delictual damages are
claimable.
Bayer SA v Frost (1991) 4 SA where Frost was a former with vineyards
intermingled with onions and wheat.

The agents of Bayer South Africa

negligently misrepresented to Frost that its herbicide could be sprayed in the


vineyards by helicopter without damaging the onions and the wheat. Frost was
induced into the contract on the basis of those representations the vineyard was
sprayed and which resulted in the onions and the wheat being damaged to the
extent of R55 000. The court allowed Frost to recover the R55 000 as delictual
damages.

MISTAKE
This refers to an error of a material fact made by either one/both parties to enter
into a contract which they could not have entered into had it not been for the

mistake.
For a mistake to vitiate a contract the following have to be satisfied:
(i)

it must be a mistake of fact and not a mistake of law. It has been

accepted that a mistake of law does not excuse a party from a contract. The
main basis of such a proposition is found in the max ignorantia juris neminen
excusat. (i.e. ignorance of the law excuses no one/rather is no excuse).
Miller and Others v Belliville Municipality 1973(1) SA 914
This point was emphasized in the case of Sampson v Union and Rhodesia
Wholesale Ltd 1929 AD 481 where the court held that a general proposition of
the law is that if you think the meaning of a clause is such and such, you cannot
get rid of your liability when you discover that the legal meaning is different from
what you thought for you cannot be heard to say that you did not know the law.
The propositions upheld in the Zimbabwe case of Ncube v Ndlovu 1985(2) ZLR
281(SC) where the appellant seduced the respondents major daughter. The
appellant then signed an agreement undertaking to pay the respondent
damages for seduction. He latter on sought to avoid the contract on the basis of
mistake of law (he was mistaken as to the legal position that a father has no
right to sue for seduction in respect of a daughter who had reached the legal
age of majority while relying on the Katekwe v Muchabayiwa case His appeal
was dismissed on the basis that a mistake of law does not invalidate a contract.
In South Africa the courts have departed on some occasions from the general

principle that a mistake of law does not vitiate a contract. The courts have come
to accept that not everybody knows the law and if they knew the law there would
not be any point in training lawyers. The courts have in essence set aside some
contracts on the basis of mistake of law.
Willis Faber Enthoven Properietary Ltd v Re Inland Revenue (1992)(4) 2002
p224 (b) where the court held that, In my judgment our law is to be adopted in
such a manner as to allow no distinction to be drawn between mistake in law
and a mistake of fact.
However, it is important to note that the Zimbabwean judiciary has not yet
departed from the proposition that a mistake of law does not vitiate a contract.
The mistake must be of a material fact or term. This simply means that the
mistake must refer to one of the essential terms of a contract itself.
In this regard two categories of mistake have evolved.
a)

Error in motive This occurs where there is a mistake regarding the


reasons why parties entered into a contract.
As a general rule a mistake that relates to the reasoning or motivation
of one of the parties does not render a contract void.
Diedricks v Minister of Lands (1964)(1) SA 49(N)

b)

Error regarding the contents or existence of the contract Therefore


these can be divided into four categories namely:
(i)

error with regard to the person or the other party. An example of

such occurs where A wishes to conclude a contract of


employment with B who is trustworthy but mistakenly concludes
the contract which (a criminal) who he thinks is B. This contract
is null and void due to error with regard to the person of the other
contracting party.
(ii)

error with regard to the identity of the other contracting party (i.e.
his name) e.g. where A employs John (whom he wants to employ
but mistakenly thinks that his name is Peter, a contract which
cannot be entered void due to error. This kind of mistake does
not affect consensus and does not invalidate the contract
between A and John.

(iii)

error with regard to the nature of the agreement E.g. where A


wants to sell his house to B but mistakenly enters into a contract
of lease, such a contract will be invalid because there will not be
any consensus (i.e. ad idem).

(iv)

error with regard to performance e.g. where A wishes to buy a


candle stick made from silver but a candlestick made from silver
there can be no consensus between him and the seller.

(v)

The mistake must be reasonable/justifiable


A reasonable mistake is known as a Justus error and can infact
invalidate a contract.
Logan v Beit 1890 7 SC/AC 19 a mistake made by one party to
a contract which is due to his own careless is not reasonable and

cannot be relied upon as a basis for setting aside a contract.


George v Fairmead Properietary Ltd (1958) 2 SA 465.
NB

Reasonableness/otherwise should be decided on the

facts of each case Yelierton 1972(4) SA 114.


(vi)

A person may not deny the existence of a contract where he is


estopped from doing so i.e. the estopped person cannot succeed
if he sets up the defence that he entered into the contract while
labouring under a material mistake.

TYPES OF MISTAKES
There are generally 3 types of mistakes:
(i)

Unilateral mistake

(ii)

Mutual mistake

(iii)

Common mistake

Unilateral mistake
This occurs where one party is mistaken and the other is not as a general rule
the mistaken party must be bound by the contract on the basis of quasi mutual
asset because, by his conduct he led the other party as a reasonable mean to
believe that he was binding himself as was held in the case of George v
Fairmead at 471 (supra).

However there are instances where a unilateral mistake can vitiate a contract,
these were spelt out in the case of National and Overseas Distributors
Cooperation Pty Ltd v Potato Board 1958(2) SA 473 at 479(g)-(h) where the
court hold as follows:
Our law allows a party to set up his own mistake, in certain circumstances in
order to escape liability under a contract into which he has entered but where
the other party has not made any misrepresentation and has not appreciated at
the time of acceptance that his offer was being accepted under a
misapprehension, the scope for a degree of unilateral mistake is very narrow, if it
exist at all. At least the mistake would have to be reasonable and it would have
to be pleaded.
From this passage 3 possibilities emerge where a unilateral mistake can vitiate a
contract mainly:
(a)

where the other party knew of the mistake at the time of contracting

(b)

where the other party induced the mistake by misrepresentation

(c)

where the mistake is reasonable

However this (c) position was varied in the case of Lamdsbergen v Van der Walt
1972(2) SA 667 where the court held that even a reasonable mistake will not
release the mistaken party from the contract unless the mistake is material in the
sense that he would not have contracted if he had known the truth.

Mutual mistake
This occurs when each party is mistaken about the others intention so that the
parties are at cross-purposes. In solving this problem the court usually applies
the doctrine of quasi mutual assent. Courts have adopted two approaches
namely:
a)

if one parties understanding what has been agreed is unreasonable in


that it conflicts with the impression he has given to the other party, he
will be deemed to have agreed in accordance with the impression he
has given.

b)

If each parties understanding/mistake is reasonable then there will be


no contract between the parties

Maritz v Pratley (1894) 11 SC 345 where M, was an auctioneer, called for bids
lot 1208 which was the successful bidder but he refused to pay because he
thought he had bought the mantel piece together with a mirror which was
standing on it. The mirror was infact a separate lot 1209. The court held that
Pratleys mistake in thinking that Maritz intended to sell the Mantel piece and
mirror together was held to be reasonable and Maritzs mistake in thinking that
Pratley was bidding for the mantel piece only was obviously reasonable. The
court held this to be a case of mutual mistake and there was no contract.
Common mistake
Both parties will be mistaken concerning a particular thing. It occurs where both
parties are labouring under the same mistake. In dealing with this problem the

court usually considers two things namely:


a)

where the common mistake leads to initial impossibility, then the


contract between the parties becomes void e.g. where parties agree to
buy and sell something which they both mistakenly think is still in
existence when in actual fact has been destroyed.

b)

Where there is no initial impossibility the effect of common mistake is


that either party is entitled to rescind the contract if the mistake is
sufficient serious.

Dickinson Motors (Pty) Ltd v Obahozer 1952(1) SA 448(A) where Obahozer paid
291 pounds which was the amount that his son owed on a car he had bought
from the company. In return the company released to Obahozer a car with both
the company and Obahozer mistakenly thought was the car concerned. When
the true owner of the car successfully claimed it. Obahozer relied on common
mistake to justify claiming the repayment of 291 pounds. This is what the court
had to say, The 291 pounds was paid under a common mistake in regard to a
matter which was vital to the transaction and if either of them had been aware of
the position, the transaction would not have gone through
As such the company was ordered to repay Obahozer the 291 pounds paid.

Rectification
It refers to the correction of errors with a contract (in most cases these are
typing errors)

It can only be granted by the court when the written contract contains the exact
wording that the parties intended but the wording produces an effect that the
parties did not intend. This point was underscored in Tesben v SA Bank of
Athens (1994) 4 AII SA 396 p401 where the court held as follows to allow the
words that the parties actually used in the documents to override the prior
agreement or the common intention that they intended to record is to enforce
what was not agreed and so overthrow the basis on which contracts rest in our
law.

DURESS
It occurs when a person is forced into a contract by fear induced through either
actual violent or threats of violence either on his person/family or property.
A contract obtained this way is voidable at the option of the innocent party i.e.
innocent party can elect to set aside the contract.
White Brothers v Treasurer General (1883) 2 SC 337, at p35 the court had this
to say:
where a man is forced by menaces to his person to make payments which he is
not legally bound to make it cannot be said that there is a total absence of
consent but in as much as his consent is forced and not free, the payment is
treated as involuntary and therefore subjected to restitution.
In the same vain Sabbides v Sabbides (1986) 2 SA 321, 325 The court
adopted Van der Linderns observation and held as follows:

When the consent of one of the contracting parties is extorted by undue


violence or fear provided the violence is of such actual important that it would
make an impression upon a courageous person the judge must take into
consideration the circumstances of both the person and of the things e.g. The
fear which cannot be deemed sufficient to disturb the mind of a person of a
mature age or of a soldier may be quite sufficient in the case of a woman or an
old man. Broodnjk v Smuts 1942 TPD at 47, 51 and 52, the court held that for
a party to establish duress he must satisfy the following requirements.
(i)

There must be actual violence or reasonable fear see the Sabbies


case

(ii)

The fear must be because by threats of some considerable evil to the


other party or his family. The question has been raised regarding
whether or not thus requirement can he satisfied when the is a threat to
ones property. In addressing this question English law provides that
duress of goods is not sufficient to set aside a contract.

However the position is different in Roman-Dutch law where economic


duress/duress of goods can infact invalidate a contract. This was stated in the
case of Union Government (Minister of Finance) v Gower 1915 AD 426 p434
where the court stated as follows:
where goods have been wrongly detained and where the owner has been
driven to pay money in order to obtain possession and where he has done so
not voluntarily as by was of gift or compromise but with expressed reservation of

his legal rights, payments so made can be recovered as had been exerted under
duress of goods.
The onus of showing that the payment has been made in voluntarily and that
there has been abandonment of rights would of course be upon the person
seeking to recover and hence the importance of a protect or an unequivocal
statement of objection made at the time. Without such protest it is difficult to see
how the plaintiffs state of mind could be established to the satisfaction of the
court.
(iii)

It must be a threat of imminent evil.


In determining this requirement courts usually assess whether or not
(assuming that the threat was sufficiently serious to affect the mind of
such a person) he could by some method other than agreeing to the
contract. If there was a way to avert the threat other than agreeing to
the contract than there will not be duress.

(iv)

The threat must be unlawful/contra bonos mores (contrary to good


morals) See Shapestone v Shapestone 1914(1) SA 411

(v)

The threat must have caused damage i.e. the threat must have
induced the party into a contract to his detriment. See Freedman v
Kruger 1906 TS 817, p821 and 822. It has come to be accepted that
duress by a third party can vitiate a contract the essential elements for
duress are satisfied. See Broodryk v Smuts. The effects of duress on
a contract is that such a contract is voidable at the option of the

innocent party.

UNDUE INFLUENCE
A party to a contract may rescind it if he can prove that the other party had
acquired an influence over him when weakened his powers of resistance and
made his will probable and used this influence in an unscrupulous manner to
persuade him to consent to a transaction which is to his detriment end with
which normal free will he would not have entered into.
Preller v Jordan 1956(1) SA 485 . The court held that a party leading undue
influence should meet the following five things:
(1)

That the other party obtained an undue influence over the other. In this
regard the law recognises that such an undue influence is more likely
going to exist where there is a special relationship between the parties
e.g. doctor and patient lawyer- client; guardian minor, religious
advisor-disciple relationships.

This point was emphasized in the case of Armstrong v Magid and Anor 1937 AD
276. where the court held as follows, wherever two persons stand in such a
relation that while it continues confidence is necessarily repossessed by one
and the influence which naturally grows out of that confidence is possessed by
the other and this confidence is abused or the influence is exerted to obtain an
advantage at the expense of the confiding party, the person so availing himself
will not be permitted to retain the advantage although the transaction could not

have been impeached if no confidential relation had existed.


(i)

The influence must have weakened his powers of resistance and


rendered his will compliant

(ii)

The other party must have used his influence in an unscrupulous


manner

(iii)

The influence must have induced the conclusion of the contract

(iv)

The contract must be prejudicial to the influenced party

Effects of Undue Influence


(i)

Undue influence makes a contract voidable at the instance of the


influenced party

(ii)

It can also make a contract void ab initio only if the influence induced
in the mind of the party seeking relief such a fundamental mistake that
apparent assent to the contract is in truth not assent at all.

TERMS OF A CONTRACT
These are promises agreed upon by the parties which together make up the
contract. A term must be distinguished from other statements which may have
been made only to induce one of the parties to enter into the contract. Such
statements may be mere puffs or representations which unlike terms cannot
grant an action for breach of contract in the event of them turning out to be
untrue.

This position was emphasized in the case of Petit v Abramson 1946 NPD 673 at
679 where the court held as follows:
It is notorious that statements made by parties when negotiating a contract may
conceivably take the status of either:
(i)

mere puffing/commendation

(ii)

representations

(iii)

undertakings commonly referred to as warranties

Classes of contractual terms


Contractual terms can be classified into two namely:
(i)

express terms

(ii)

implied terms

Express terms
This refers to contractual terms that are gathered from what was actually said by
the parties either orally or in writing. As regards contractual terms in a verbal
agreement.
Small v Smith (1954) 35 ALR 434, 437 held as follows:
A statement made seriously and deliberately during the negotiation of a verbal
contract becomes a term of the contract if the parties by mutual intention either
expressed or implied intended it to be a term of the contract.
The usual challenge is to prove the existence of such terms

Regarding written contracts terms are easy to prove because they are reduced
into writing. Judges tend to uphold the position that,
documents speak for themselves What this means is that judges prima facie
(i.e. on the fact of it) rely on a written contract unless a justifiable reason is
presented to prove otherwise.
Effects of a signature on a written contract (caveat subscripto).
This was well captured in the case of: Burger v Central African Railways 903TS,
571, 578 where the court held that
It is a sound principle of law that when a man signs a contract he is taken to be
bound by the ordinary meaning and effect of the words which appear over his
signature.
This principle is referred to as caveat subscripto (i.e. let the signatory beware i.e.
the signor should be weary).
This principle applies to the doctrine of quasi mutual assent but in essence a
reasonable person is entitled to assume that a person who signs a contract
intends to be bound by it, so he is bound even if that was not his true intention.
George v Fairmead (Pty) Ltd (1958) 2 SA 468
Mathde v Mathde (1951)(1) SA 256
It is important to note that a person who signs a contract containing blank
spaces is prepared to be bound by that contract when the blank spaces are filled
in by the other party.
National Grindlays Bank Ltd v Yelvireturn (1972) (4) SA 114.

But if the signatory has in any way indicated how he wishes the blank spaces to
be filled in the other party must of cause comply with the wishes.
Commercial Bank of Namibia Ltd v Trans Continental Trading (Namibia) (1992)
2 SA 66, 75, 77.
However the caveat subscripto principle is not rigid Courts will not apply it
where there is misrepresentation, fraud, illegality, duress, undue influence and
influence.
Spindufter (Pty) Ltd v Lester Donorvan (Pty_ Ltd (1896) (1) SA 303

Unsigned Contracts/Ticket Cases


It refers predominantly to notices, tickets and other unsigned documents. In
dealing with these courts have adopted a three pronged approach which was
aptly summarized in Kings Car Hire (Pty) Ltd v Wakeling (1970)(4) SA 640, 643
d-f
The approach of the court is to enquire whether the person who received a
ticket knew that there was printing/writing on it.
Secondly if so a further question Did the person who received the ticket knew
that the printing or writing contained provisions or references relating to the
provisions of the contract in question.
If these 2 questions are answered in the affirmative then the provisions in
questions are part of the contract.
If either of such questions are answered in the negative then a third question

becomes relevant namely, Did the person, giving the ticket do what was
reasonably sufficient to give the other party notice of the conditions?
If the answer to such last mentioned question is in affirmative then also the
provisions or conditions are part of the contract. If not then the conditions form
no part of the contract.
A customer is not bound by unreasonable terms printed on an unsigned written
contract such as a ticket.
Exemption Clauses
An exemption clause is a term of a contract which exempts one party from some
specified liability or responsibility which would otherwise fall on him.
An argument in favour of the exemption clauses is that by shading some of his
responsibility which would otherwise fall on him.
An argument in favour of the exemption clauses is that by shading some of his
responsibility the user of the standard form contract will be able to obtain
insurance at a cheaper rate and therefore charge less for the service he
provides for the benefit of all his customers. However courts have not been
impressed by this argument and have placed limits on the effectiveness of
exemption clauses.
Courts have developed a two pronged approach namely:
(i)

Is the exemption clause part of the contract. If it is not part of the

contract then the stay ends there. The other party would not be bound.
But if it is a part of the contract the courts will apply the caveat
subscripto principle and raise the following question:
(ii)

What does the clause mean?


Here the court usually adopts a strict interpretation. In the event of
either doubt or ambiguity, the court will interpret an exemption clause
against the drafter of the clause. This is referred to as the contra
proferentem rule.
Shubwa Ranch (Pvt) Ltd v Shield of Zimbabwe Insurance (Pvt) Ltd
1988(2) ZLR 306

It is important to note that courts have held that a party who wishes to exempt
himself/itself form liability caused by his own negligence should clearly state so
in the exemption clause.
Cotton Marketing Board v National Railway of Zimbabwe 1988(1) ZLR 304
However the above mentioned principle does not apply where the other partys
negligence amounts to breach that goes to the root of the contract.
Transport and Crane Hire (Pvt) Ltd v Hubert Davies and Co (Pvt) Ltd 1991(1)
ZLR 190
However this dispute has been settled by the promulgation of the Consumer
Contracts Act (Chapter 8:03).
In terms of the said Act a consumer contract is defined as a contract for the sale
or supply of goods or services or both in which the seller or supplier is dealing in

the course of business and the purchaser or user is not.


In terms of the Act the following exemption clauses are prescribed:
(i)

those that exclude/limit negligence

(ii)

those that exclude/limit liability in the event that goods do not conform
with any description or sample given in respect of the goods

(iii)

those that exclude/limit liability for latent defects in goods

(iv)

those that deny/limit the buyers right to require the seller/supplier to


either:
(a) re-imburse the goods
(b) replace the goods
(c) repair the goods
(d) reduce the price or amount payable in respect of goods

INTERPRETATION OF EXPRESS TERMS


It has generally been accepted that when a contract is reduced into writing the
courts must rely on the provisions of the written contract (not extrinsic evidence)
to deal with any dispute arising therefrom. This is referred to as the Parole
Evidence Rule and was underscored in the case of Johnson v Lean 1980(3) SA
927, 937, where the court held as follows:
When a contract has been reduced to writing, the writing is regarded as the
exclusive embodiment or memorial of the transaction and no extrinsic evidence
may be given of other utterances or oral acts by the parties which will have the
effect of contradicting, altering, adding to or varying the written contract.

The rational for this is that if parties to a written contract are permitted to give
you extrinsic/external evidence written contracts will lose much of their value.
However the parole evidence rule is not a hard and fast rule (i.e. rigid rule). In a
bid to enhance justice between the parties courts have developed the following
exceptions to the application of the parole evidence rule:
(i)

If the parties did not intend the written agreement to be the exclusive
embodiment of their contract the parole evidence rule will not apply.
This normally occurs where a contract is partly written and partly oral.
Baldachin 1920 AD 312

(ii)

Extrinsic evidence can be allowed to show that the written contract was
contradicted, altered, added to or varied by a subsequent oral contract.
See Johnson v Neil case

(iii)

External evidence may also be given to an oral agreement the making


of which induces the making of a written contract provided the oral
agreement does not conflict with the written agreement.
Duplesis v Nel 1952(1) SA 513

In Stiglingh v Theron 1907 TS 198, 1003 the court pronounced the


following exception but again evidence is admissible of a separate oral
agreement constituting a condition precedent to the attachment of any
liability under the written instrument. Thus is an exception to the

general rule.

(iv)

The parole evidence rule does not prohibit evidence in support of a


claim of rectification of the contract not in support of any defence which
challenges the validity of the contract nor evidence to contradict the
debt of signature recorded in the contracts since this is not part of the
agreement between the parties but an objectively determinable fact.
Otto v Heymans 1971(4) SA 418, 453-153

Express terms: Exceptions to the Parole Rule


The first exception is not strictly one exception as such, it says Parole rule
evidence does not exclude the leading of evidence to establish that the contract
was subject to a suspensive condition.
1.

One will not be varying the terms of the contract.

2.

The rule will not be applicable where it is the intention of


the parties, that the contract should be partly in writing
and partly oral. The court will give effective to that
intention of the parties.

See Oerseput v Avis(1) 943 AD 331 where the court took the view that this was
the situation that the parties had intended that their contract should partly be in
writing or oral. Held that the oral agreement would be given effect to (that the
oral agreement would be given effect to) or will be valid.

Harting Properties and Other v Los Angeles Hotel 1962(3) SA 143 where a
contract was held by the court to be constituted by the lease agreement and a
letter. To counter this problem when drafting a contract one would have to
include an integration clause or a whole contract clause. This will be a term to
the effect that the document will be entire contract between the parties and all
terms, conditions, warranties or representations, not the included will be
expressly excluded.
This means that one would be entrenching the Parole evidence rule into the
contract. See the case of Mhere v Tubbs 1986(2) ZLR 179. The Parole
evidence rule is designed to promote certainty, it reduces the costs should
litigation arises, i.e. instead of leading many witnesses, the contract document
just serve all the purposes. However the exceptions to the Parole evidence rule
makes the written document uncertain and ultimately the court had to balance
the conflicting parties interests. The Parole evidence rule does not apply where
the validity of the contract itself is being challenged by the parties.
Kok v Osborn 1993(4) SA 788 where the court ruled one could not exclude
Parole evidence to establish the ground of invalidity the contract e.g. mistake,
thus courts are prepared to disregard the intergration clause as it did in Mhene v
Tubbs (supra). An intergrational clause is often coupled with non-variation
clause. If the parties intend to vary the terms of the contract it must be in writing
and signed. In such purported and evidence to vary the terms of the contract

will be of no force or effect. There used to be a doubt whether parties to a


contract were bound by a non variation clause in their contract. The argument
was that the parties are at liberty to vary it orally if they intended to do it so. In
1964 the CPD decided that the non variation clause is binding on both parties
and any purported oral variation inconsistent with such a clause will be invalid.
However a non variation clause does not in itself preclude a waiver. Accordingly
a non variation clause is purported by a non variation clause.
Since we are talking of a term in which both parties have an interest they infact
have to agree to waive it as well. With a non-waiver any party which has a right
can unilaterally waive that term. A non-waiver or indulgence clause says that no
indulgence made by the party can be taken to be the waiver of his rights.
The Supreme Court considered this issue in the case of A Finance C v Porcock
1986(2) ZLR 229 SC-138-1986 where P was a farmer who had borrowed some
money from AFC according to the contract, the AFC could come at any time and
possess the farm and sell it. The contract had a non-variation and non-waiver
terms. P fell into arrears, he went to AFC and had discussions with the manager
of AFC, one R, R agreed that instead of AFC moving into the farm they would
enter into arrangement with R, he was surprised to see a letter from AFC
threatening that they would move in and sell the property. P argued that they
had entered into an oral agreement with R. So AFC cannot repossess the farm.
It was argued on behalf of the AFC that there was non-variation and non-waiver
clause hence they were supposed to proceed as they had done. P argued that

the oral agreement constituted a waiver by AFC of its rights in terms of contract.
P further tried to argue that the AFC should be estopped from denying the
existence of the oral agreement with its general manager. Ps argument were
reflected by the court which ruled in favour of the AFC.

Exemption clauses and third parties contracts


The issues arising are
Can a third party sue or rely on the contract between A and B whilst C himself is
not party of the contract. This issue arises inevitably because of the doctrine of
Privity of Contract which postulates that a contract is binding upon and creates
rights and obligations only.
Thus a third party cannot acquire any rights or obligation in the contract.
The case of Adler v Dickson 1955(1) QB 158. The case of A and D (supra)
illustrate the whole issue of third parties and exemption clauses.
Alder was a passenger in a ship owned by P and C, when the ship arrived on a
certain port most passengers got out of the ship and upon reboarding whilst
walking upon the gang of banks and fell due to the unstableness of the which
expressly provided that the company was excluded from liability as well as its
servants for negligence. It is tried that the contract was between Mrs Adler and
Co. Instead of suing the company Mrs Adler sued the companys employees for
negligence. Dickson was manager of gang for the planks. The employee D
relied upon the exemption clause. The court held that the exemption clause.
The court held that the exemption clause exempts the company not the

employees. The employees no matter how efficacy was the wording of the
clause could not derive benefits from a contract to which they were not parties.
The ship in which Mrs Adler was traveling was called Himalaya and the
exemption clause at issue in that case became commonly known as Himalaya
Clause. After the Adler case company went back to the drawing board and
came up with an embracing clause which protected its workers. The issue then
came up again for decision in the case of Scruttons v Midlands Silicons Ltd
1962 AC 446, 1961(2) LLR 365. In this case Lord Raids speech made it clear
that it is possible for exemption clause between A and B to adequately protect C
on condition that (1) the exemption clause must expressly make reference to C
the employee. The one in the Himalaya did not. (2) The company in entering
into contract with the customer must have acted both in its own rights and as an
agent for its employee.
Having considered the speeches in the Midlands case appropriate clause was
now drawn by the company.

Principles of interpretation
The following principles have evolved in interpreting written contracts.
(i)

The ordinary grammatical meaning it provides that the contract must


speak for itself through the ordinary grammatical meaning of its words.
Total SA Pty Ltd v Bekker 1992(1) SA 617 at 625 the court held that,
the underlying reason for this approach is that where words in a
contract agreed upon by the parties thereto and therefore common to

them speak with sufficient clarity, there must be taken as expressing


their common intention.
NB You can use the parole evidence rule principle to support the idea
that our courts still uphold the principle of SANCTITY.
However, the ordinary grammatical meaning will not be applied in the
following circumstances:
(a)

If the result with be absurd Scottish Union and National Insurance


Co Ltd v Native Recruiting Coop Ltd 1934 AD 458, 465, the court
held as follows, It however the ordinary sense of the words
necessarily lead to some absurdity/to some repugnants or
inconsistency with the rest of the contract then the court may modify
the words just so much as to avoid the absurdity of inconsistency
but no more.

(b)

If it is clear from the contract itself or from evidence that the words
have been used in some special and technical sense:
Rand Reitfontein Estates Ltd v Cohn 1937 AD, 517, 318, where the
court held that Again if the words on the contract have been used
in a peculiar sense evidence of the sense in which the parties used
the words may be given.

(ii)

The context: words in a contract must not be read in isolation but in


their context. The courts approach was summarized in the case of
Melmath Town and Board v Marious Mostenrt Pty Ltd 1984(3) SA 718,
728 where the court held as follows, As in the case of statutes the

contextual approach phrase in a contract requires that regard must be


heard not only to the language of the rest of the provision concerned or
the contract as a whole but also to considerations such as the apparent
scope of purpose of the provisions.
The evidence of surrounding circumstances this was aptly summarized in the
case of Delmas Co. Ltd 1955(3) SA 447, 454, where the court held that, If the
difficulty cannot be cleared up with sufficient certainty by studying the language
recourse must be heard to surrounding circumstances i.e. matters that were
probably present to the minds of the parties when they contracted. The court
can also apply rules of interpretation these rules have evolved from common law
and they include the following:
a)

courts may always presume that the parties intended an


interpretation that is fair to them both rather than an
interpretation that gives are party on unfair advantage over the
other

b)

an interpretation that avoids inconvenience is usually preferred

c)

an interpretation that gives effectiveness to a contract is usually


preferred to the one that renders at abortive

d)

it will be presumed that every word in the contract was intended


to have some effect to be of some use

e)

the change of expression will be presumed to signify a change of


meaning

f)

general words will be given a restricted meaning to fit in with the


context in which they are used

g)

greater weight will be given to special provisions rather than to


general provisions

h)

the express mention of one item will be presumed to exclude


similar items that are not mentioned unless it appears that the
one item was mentioned for the sake of caution.

Implied Terms
These are terms that are imposed into a contract from its context. They come in
three forms namely:
(i)

terms implied by law/


These refer to terms that are imported into a contract by operation of
either common law or statute law regardless of the intentions of the
parties e.g. a sale of land has to be in writing i.e. The Labour Act
imposes a number of minimum conditions on an employment contract.
Every contract of sale has an implied warranties against latent defects.
Also the Higher Purchase Act requires every Hire Purchase agreement
to be reduced into writing. It also forbids a purchaser in a Hire
Purchase Agreement to waive his rights given to him by the Hire
Purchase Act.

Terms Implied by Trade Usage


These arise where a specific trade has developed its own universally and
uniformly observed rules which apply in contracts of that trade or profession.
The requirements for implying a contractual term by trade usage were laid down
in the case of Golden Cape Fruits Pty Ltd v Footplate 1973(2) SA 602 as that
the term should have universal, uniform, notorious, reasonable, certainty and
should not conflict with other provisions of the contract.
Such a term can become a term of the contract in two ways namely:
a)

if both parties are familiar with the usage they may be


taken to have tacitly agreed that the usage should be a
term of their contract

b)

if one of the parties is ignorant of the usage he can only be


bound by the alleged trade usage if it satisfies the
requirements laid down in the Golden Cape Fruits case.

Terms implied from facts


Tacit terms
These refer to terms that become patently clear when regard is given to the
language used in the contract and surrounding circumstances.
In the case of Alfred Mcalpale v Transvaal Provincial Administration a tacit term
was defined as, an unexpressed provision of the contract which derives from
the common intentions of the parties as inferred by the courts from the express

terms of the contract and surrounding circumstances.


A question that inevitably arises from the definition from is how are courts
supposed to infer terms implied from facts? This question is answered in the
case of Wilkins v Voges 1994(3) SA 158 where the court adopted a four pronged
approach namely:
a)

whether the proposed implied fact has been written in the contract if
not then the court will ask itself the following question:

b)

whether the tacit term is necessary in the business sense to give


efficiency to the contract

c)

whether it can be competently that of that time the contract was being
negotiated someone had said to the parties, of course so and so will
happen.
This is called the official By-Stander Test

d)

whether the term is capable of clear and exact formulation. See also
Reigate v Union Manufacturing Co. 1918 (KB)(1 592, p605.

It should be noted that the courts are reluctant to imply terms into contract
because:
1

for instance if there is a written contract the whole idea is to have


certainty and it is unlikely that the parties will leave certain terms

if a court started to imply certain terms hence destroy the idea of


certainty

the whole basis of the agreement of contract is agreement and

parties are bound because they had agreed.

Doctrine of sanctity and freedom of contract


The doctrine of freedom of contracts and the doctrine of sanctity
of contract dictates that courts should not interfere with parties
contract.
4

courts are also reluctant because, they do not want to be


accused for making contracts for parties

if implied terms became inconsistence with expressed terms


there is no rational for implication.

Note however that, there are certain implied terms which parties by
mutual assent contract out of.

Freedom of Contract
This essential means that one is free to enter a contract or not to and having
decided to enter the contract, to enter with whom he/she ever wants and to
decide upon which terms they want. The general law is that while it is formal
true, in practice it is very different, if you choose to contract in most cases
depends on the strength of your bargaining power one does not have a choice
especially in cases of standard forms contracts i.e. mortgage bonds.

If one chooses to contract with a building society to borrow money from them
there is no freedom to lent money on daily basis and they draft standard form
contracts, which the borrower may contract to or not. It must be noted however
that those standard form contracts, have merits for bankers who has to enter
into one contract with thousands of customers will reduce their costs.

Sanctity of contracts
This doctrine merely means that where parties had freely entered into the
contract it becomes sacro-sanctity and the courts cannot make another contract
for them. The statutes such as Consumer Contracts Act and Contractual
Penalties Act, seeks to aid interpretations of such contracts.

By making

exemptions clause the party concerned seeks to exempt itself from which it
should be ordinarily be liable. This is interpretation the courts should try to
uphold the doctrine of freedom of contract. The common law position is that the
court will not struck down the exemption clause on the basis of being harsh or
unreasonable against the other party. The court also looks at the liability to
which the proferens would be subject to where there is no exemption clause. At
common law if there is no strict liability the other party will have to prove
negligence CMB v NRZ 1990(1) SA 522, 1988(1) ZLR 304

Transfer of Contractual Rights


Contractual rights can be transferred through:

a)

cession

b)

delegation or

c)

novation

Cession
In regard to cession the contractual obligations are transferred to the other party
known as a cedent. Cession is sometimes described as some kind of novation.
Cession brings in commercial convenient and facilitates commerce by enabling
the creditor to account his rights to account by selling them instead of enforcing
them himself.
Cession curtails circuit of litigation. Notice of cession to the debtor, is not
necessarily required but it is legally advisable that the debtor who pays the
ceded after the cession in good faith without notice of the faith, is considered as
legal have settled the debt. However a debtor who pays the ceded after notice
of cession still remains liable to discharge the debt to the cessionary.
He cannot reclaim the payment from the ceded.

Cession is sometimes

described as a kind of novation but it differs from novation in that novation is


requires consensus of the debtor and consequent of the novation will be that
there will be a new contract to replace the old contract.
Whereas cession result in novation the cessionary still sues on the old contract
but cession does not do so. It is submitted that it is legally improper to refer to
cession as a form of novation. Cession is the opposite of delegation.

Delegation
It requires the agreement of the all parties concerned that a third party be
substituted for the original debtor and the later become discharged from the
obligation of the debtor.

The creditor had to agree the older debtor in

replacement by the new one. The idea behind delegation is to transfer burden
to of the debtor i.e. irrecombly from the original to the new debtor. Accordingly
the creditor cannot sue the original debtor see the case of Van Acherbeck v
Walters 1950(3) SA 734. See also Jacobs v Faw 1982(2) SA 863. The common
intention of all the 3 parties that a delegation should take place may be express
it may be implied from surrounding circumstances including the contract of the
parties. See Metalbox of SA v Dustan (Pvt) Ltd 1974(2) 208. The introduction
of a third party to a transaction does not necessarily mean that there has been
delegation e.g. where a debtor requests a third party on his own initiative,
promises the creditors to discharge the credit on behalf of the debtor. This does
not realize the original debtor.

Novation
It means the replacement of existing contractual obligation by new obligations.
The concept of novation arose during Roman times, to alleviate the problems
caused by supervening or initial impossibility.

Novation discharge the old

obligation and a completely new contract is created. There are 2 types of

novation:
-

Voluntary novation (novatio voluntaria) - where 2 parties to a


contract mutually agree to enter into a new contract to replace a
existing contract.

Compulsory novation where an existing contract is superceded


by a judgment of a court of law. This is sometimes called novatio
necessaria.

See the case of Van Copenhagen v Van

Copenhagen 1947(1) SA 576 , Barclays National Bank v Smith


1975(4) SA 675 and Suncliff (Pvt) Ltd v Dyke 1978(1) SA 1980.

Termination of contractual obligation


A contract is terminated after being performed. What kind of performance is
required? Performance means that each party must perform its own obligations
as envisaged by the contract.
Performance should be made by the party upon whom the obligation is imposed
and that performance must be rendered to the person recognised by the law as
being competent to receive the performance. See Hanornag SA (Pvt) Ltd v Otto
1940 CPD 437. What happens if the performance does not exactly confirm to
performance expected in the contract i.e. must a party performed exactly what
he is obliged to do under the contract (informa specific) does it suffice if a party
rendered equivalent performance.
For a court of law to decide this issue it is always difficult.
However this problem has been fairly settled in SA in the case of Van Diggelen v

De Brain and Anor 1954(1) SA 188 where the court outlined the approach to the
adopted.
First and foremost the court must establish the parties intention, talking into
account the surrounding circumstances and everything which gives a due to that
mutual intention.
The court must seek to find, what the parties would have wished to had their
minds had been directed, whether the performance was to be specific and
equivalent.
Secondly should there be no clues as to the parties to mutual intention, the
presumption that the performance was to be specific.
This is a rebuttable presumption.
Thirdly the court will in case of doubt be more likely to have a favour of
equivalent performance.
If the manner of the act to be performed if it is immaterial or where performance,
informa specific is impossible through no fault of the promissor. See the case of
Peters Hammon v Koksrud 1999 AD 427

Impossibility of performance must be genuine


This that the promissor cannot simply tender equivalent, performance because

specific performance is becoming expensively difficult.


Fourthly the act of performance tendered where such as permissible must in the
just instance be an equivalent to that mentioned in the contract or be of such a
nature that it can make no material difference to the promisee.
Such seems to be the position if any immaterial or inequality can be put right by
compensation given to promisee by promissor.
Finally the courts paramount obligation is to be justice between man and man.
It must to this be guided by the terms and circumstances in the contract under
consideration.
Thus in cases where the promissor had discharged the onus required by
number 2 he may be circumstances falling short of impossibility and even where
there may have been some fault on one party, the promisor and where the court
may come to conclusion that the promissors performance or tendered
performance amounted to substantially performance or is such of a nature that
the promisee may be compensated damages for any shortfalls. See Reliance
Agency (Pvt) v Patel 1946 CPD 465. See also Adler v Eliot SC 169 of 1958.

Termination by mutual agreement


A contract can be terminated by mutual agreement. The methods of discharge

dealt with above all have one thing in common, they are initiated and are a
consequence of mutual agreement. If parties are free to enter into a contract on
any terms and conditions then it follows that they are at liberty to agree to
discharge the contract. Thus where the parties by mutual agreement agreed to
discharge the contract that is legal quite proper. For a contract to be discharged
by agreement, it is not problematic if the contract had not been performed, it is
still executed. Problems may arise where the contract had been partially
performed. If the parties have completely performed, then the question of
discharge by agreement does not arise as such a contract will be deemed to
have been discharged, through the first method dealt with i.e. discharge by
performance. It is submitted therefore, that discharge by mutual agreement is
different from discharge by performance. In general an agreement to discharge
the contract tacitly raises the presumption of restitution of whatever performance
have been rendered. See the case of Geldenhnys v Maree 1962(2) SA 571(O).
Once a contract is discharged by agreement a part cannot be heard to argue
that they seek to enforce the contract or some rights arising therefrom. Lastly
under this rubric, a contract can be discharged through waiver by the promisee.
What are the requirements of waiver. The promisee/or the person who was
supposed to receive the performance must have knowledge of his rights under
the contract and the party alleging waiver must proof the fact of waiver, whether
expressly or by conduct. If a party alleges waiver by conduct, the promisees
conduct must leave no reasonable doubt, as to his intention of abandoning his

rights in the issue. These requirements were underscored succinctly in the case
of Hepner v Roodepoort-Maraisburg Town Council 1962(4) SA 77(A), where the
court stated the requirements as follows:
The onus is on the appellant, (the promissor, he must show the respondent
(promisee) with the full knowledge of her right decided to abandon it, whether
expressly or by conduct, plainly inconsistent with the intention to enforce it.
In Ex Parte Sesseus 141 TPD 15 the need for full knowledge was justified on
the basis that waiver is a form of a contract, in which the promise i.e. taken
intentionally to have surrendered his rights. Intention to sole surrender can only
exist where the promisee has knowledge of the facts of legal ramification of his
consequences. See the case of Chidziva and Others v Ziscosteel SC/137/97.
See also the case of Patel v Controller of Customs and Excise 1982(II) ZLR 82.
Termination of discharge by operation of the law
How courts with supervening impossibility in Zimbabwe. Until the decision of
Pieters, Flamman & Co. v Kokstad Municipality 1919 AD 422, they used to be no
contract between English law and Roman-Dutch law on the effect of
supervening impossibility. English law starts from the general proposition, that
supervening does not excuse non-performance of the contract subject to several
exceptions which include the doctrine of frustration. In Pieters Flamman case
the Municipality contracted that company to provide streets lights for ten years.

During the substance of the contract, the partners were failed as enemy aliens
for imprisonment and their business was wound up under the relevance
legislation.
The municipality claimed damages for breach of contract and forefeiture of the
firms plant under the contract. The Appellate Division dismissed the action.
The court held that if a person is prevented from pertaining his contract by this
vis major casus fortuituous under which falls an act of state i.e. person is
discharged from liability. A contract is void if at the time of its inception its
performance is impossible. The same apply to where the contract became
impossible for performance.
Void everything must be returned to original position status core. Supervening
impossibility discharge the contract provided the promissor proves that the
contract has absolutely become impossible of performance. This does not
mean that the promissor can escape from his obligation simply because
performance has become uneconomic/difficult.

The English doctrine of

frustration does not apply in our law.


If only a part of a contract had became impossible for performance the court
then looks at the divisibility of the contract and if then find that some obligation
may be performed, then the promissor is discharged to the extent of

impossibility. The creditor or promisee had the option to cancel the contract or
accept reduced performance. See Stanfeld v Kuhn 1940 NPD 84, See also the
case of Lupu v Lupu 2000(1) ZLR 120 and the case of Bobs Shoe Centre v
Heneways Freight Services 1995(2) SA 421. See also Minister of Industry and
Technology v Tanaka Powers SC 114/1990. In Stanfeld there was the contract
for the sale of land for 500 pounds per acre, thus major in the form of
expropriation of or a national road, made it impossible for the seller to transfer
more than 0,471 of an acre, the court held that the buyer was entitled to demand
transfer of 0,471 of an acre against a price of 47 pounds. If parties agree to the
performance of something which is risk impossible, then the court will enforce
the contract i.e. remedies of breach of contract. In the same light, impossibility
created by a party does not discharge the case of WireOHMS v Greenbalt
1939(3) SA. See also the case of Hershman v Shapiro and Co. 1926 TPD, 367
and Dickson Motors v Oberholzer 1952(1) SA 443. See Kok v Osborne 1993(4)
SA 788; Benjamin v Myers 1946 CPD @ 655; Bayley v Harwood 1954(3) SA
498. See Kell v Henry [1903] 2 KB 740.
Set off Compansatio
It denotes a situation where two parties to a contract or generally where a
creditor and a debtor have reciprocal obligations. If the debtor or obligation are
equal both are discharged and if they are unequal, the smaller debt is
discharged and the larger is reduced proportionally. See the case of Scheirant v
Union Government 1926 AD 256. See also Treasure General v Van Vuren 1905

TS 582 and Baine v Barclays Bank 1937 SR 191. Set off is the principle of
common law that is Roman-Dutch law not English law. It has to be pleaded and
proved. For set off to be effective the reciprocal debts or obligation and fully
due. Liquid means that the debt must be certain or capable of readily being
ascertain i.e. over draft v interest miscalculations by a bank.
The one debt extinguish the other as if performance or payment have been
rendered. Spurious defences based on bailey denial of the debt will not defend
set off. See the case of Bevcorp v Nyoni and Ors 1992(1) ZLR 352. See also
Roman Catholic Church v Southern Life Assurance Ass 1992(2) SA 807. See
also Central African Railways v Williams 1963 Rand Nyasaland 106/166. See
also Trinity Engineering (Pvt) Ltd v Anglo Shipping Ltd 1986(1) SA 700(25).
Breach of a Contract
It can be rightly be classified as the method of termination or discharge.
However although breach is said to be a mode of termination of contract.
Breach does not of itself automatically terminates a contract. Breach has the
effect of entitling the innocent party to cancel the contract besides to give such
entitlement the breach complained of must be either a major (material), or
fundamental breach, repudiation, or breach in circumstances where the contract
provides that breach will provide an effect of terminating the contracting. Breach
of contract is committed where one party who is bound to vendor performance at
a later date (future date) indicates that he/she will not tender performance when

it falls due (anticipatory breach or repudiation).


Performance that should have rendered is not rendered at all Nonperformance or ordinary breach
Some performance is rendered such performance is not in accordance with the
terms of the contract, the debtor fails to perform timeously. A party who fails to
perform timeously is said be in mora. See the case of Breytenback v Van Wijk
1923 AD 341. See also Broderick Property v Rhool 1962(4) SA 447. See also
Goldstein and Wolff v Maison Blanc 1948(4) SA 646 and the case of MicrouTsicos and Anor v Swart 1949(3) SA 715.
Repudiation
Apart from the time element in breach, where does any other kind of breach
terminate a contract? Repudiation is where one party to a contract evinces
(discloses) an intention no longer to be bound by that contract, that repudiation
can be express or by conduct. Tuckers Land Development Corporation v
Holves 1980(1) SA 645, the appellant property drew a plan of a township on
which appeared on 2 stands, which were then sold to the respondent Holves.
The appellant came up with new plan which two stands did not appear. The
court held that the drawing up of the new plan meant that the appellant have
repudiated the old plan contract. Where somebody expresses an intention no
longer to bound by his contract, that is fine. The innocent party has an election
whether to accept the repudiation thereby terminating the contract, or rejecting

the repudiation/in which event the contract remains in force, such an election
however must be made within a reasonable time. See White and Carter Council
v McGregor 1961(3) AIIER 1178, 1962 AC 413.

The city council were

responsible for distributing litter bins and the defendant owned a garage, the city
council, will allow organizations and people to advertise on the bins. The initial
contract between the council and the defendant was duly performed. Later one
of the employees of the counternewed the contract for a further 3 years. The
employer did not have the authority to renew the contract. Defendant went to
the council that advised then that he had cancelled the contract.
The council decided not to accept the repudiation, thus the contract remained in
force from 1957-1960. The council later ratified what its employer had done
that is irrelevant in determining the outcome. The defendant did not take
advantage of advertisement places but the council claimed payment. The court
held that the contract remained in force for both parties and the council was
entitled to the 3 years of advertising. In that case the court did not take about
the mitigation rule. This rule means that any person who suffers loss or
damages should take reasonable steps to mitigate that loss). Mitigate to
reduce the detrimental. The council in his causa/case had not mitigated its loss.
The mitigation rule applies to damages and not to cases of specific
performance. And it is submitted that in the White and Carter case the court did
not apply the mitigation rule because the council was seeking specific
performance. It was fortuitous though that in that case the council was able to

render performance without Mcgregors consent.


Material breach
This is sometimes called fundamental breach. This is a breach that goes to the
root of the contract, the analysis i.e. is a factual one. Is the breach that had
occurred is so serious that it undermines the contract. And the innocent party is
not reasonably expected to continue with the contract. It amounts to nonperformance. In terms of drafting a contract, parties tend to say or to provide
that any breach if not remedied within 14 days will give the innocent party time
to cancel the contract. The purpose of such provision is to obviate the need to
proof that the breach was fundamental or serious. Spies v Lombard 1950(3) SA
469 ; Universal Cargo Carriers v Citati [1957] 2 QB 401, See also Ankemp v
Morton 1949(3) SA 611. On repudiation see also the following cases Street v
Dublin 1961(2) SA 4. See also Ponisammy v Versailles Estate (Pvt) Ltd 1973(1)
SA 372.
Remedies for breach of contract
When a distressed/distraught dashes client into your offices one had to decide
what can be done, to enforce the contract or to secure some remedies and how
it is going to be done. If X does not pay under his contract you can sue him and
get a contract judgment which can be enforced by selling his property. There
are five remedies of breach of contract:
1

cancellation and damages

order for specific performance

declaratory order

interdict

Exceptio non adimpleti contracts (I cannot perform because you had


not performed your part)

Specific performance

In Roman-Dutch law an order for specific performance is the primary remedy.


This is an order directing the defaulting party to undertook what they had agreed
to do under the contract. Intercontinental (Pvt) Ltd v Nestle Zimbabwe 1993(1)
ZLR 21. Nestle had undertaken to deliver certain quantities of milk and they
failed to deliver the milk, then Intercontinental went to the contract for an
application for specific performance.
The principle that specific performance is the primary remedy is the way of
contrast with English law, where, unless there are special circumstances which
makes specific performance appropriate, the court will award damages. In
Roman-Dutch law the court will order specific performance unless there are
special circumstances which makes it appropriate. See the case of Kruntel Bro
v Lazarus 1992(2) SA 423, 1991(2) ZLR 125. See also Haynes v King
Williams Town Municipality 1950(1) SA 370; where the SA Appellate Division
gave indication where the court will refuse the order of specific performance.
The guidelines in this case require caution because of the influence of English

law. The court will refuse specific performance where the damages are
adequate. (Note that this neglects the primary purpose of specific performance
in Roman-Dutch).

The court will refuse to give order where specific performance is


difficult to enforce.

Where the thing being sought in terms of the contract can be easily be
found elsewhere. It is submitted that this is not a valid ground,
because like the first its nature is to undermine the nature of specific
performance. The SA courts have moved away from 3 and 1. See
Benson v SA Mutual Life Assurance Co. 1986(1) SA 776, where the
plaintiff was seeking specific performance of delivery of company
shares when some were available at the Jorburg Stock Exchange.
The court ordered specific performance. The first ground was also
rejected by court or the Intercontinental case where the court ordered
specific performance and also rejected by Zimbabwean courts.

A court will not order specific performance where that will entail
services of personal nature.

A court will not order specific performance where such performance will
operate unduly harshly over the defendant. Or where the performance
is impossible.

Services of a person nature will arise for instance in employment situations. The

court may not order a worker to go and resume work because one can not be
sure whether the performance will be rendered fully.
At common law a court will not order a specific performance of a contract, See
the case of Sheahood v Union Government 1926 AD 286. See also the case of
Commercial Careers Ltd v Jarvis 1989(1) ZLR 344; Winterton Holmes and Hills
v Paterson SC 115/95 where the Supreme Court accepted that it will not order
reinstatement specific performance where there has been a bitter relationship
between the employer of employee. In the case of Hama v National Railways of
Zimbabwe, the court said that a part who seeks specific performance must have
performed his part of the bargain or alternatively must tender performance and
indicate ability will to perform. The ratio of the Hama case is however the court
will

not

order

specific

performance

where

it

is

impossible

to

perform/enforce/order. See also Farmers Cooperative Read Berry 1912 AD


343.
Exceptio non adimpleti contractus
Like said earlier on a party cannot seek specific performance from the other
party from the contract if he has not performed his own party. The party seeking
specific performance must tender his own performance. The essence of this
remedy is, simply stated, that my obligation to perform has not arisen because
you have not performed your own obligation. It is submitted that this remedy
must be treated with caution as it will optimally apply to reciprocal obligation.

Interdict
There are 2 types of interdict temporary and final interdict. An interdict is an
order stopping the other party from the doing of something, which will jeopardize
ones rights under the contract. A final interdict is an equivalent of specific
performance, where the obligation sought to be enforced in character, i.e.
negative prestation i.e. in a Covenant Restraint of Trade, what the covenantor
undertake not to do something in Zimbabwe or Harare. The undertaking is
negative in character. One is not undertaking positively to do X. The only way
to enforce the covenant is order (final interdict), stopping the covenantor from
breaching the covenant. A temporary interdict (an interdict pendente lite). This
literally means to free a situation pending litigation i.e. where a purchaser wants
to stop the seller from transferring a disrupted property pending litigation (legal
action). Flamelilly v Zimbabwe Salvage (Pvt) Ltd and Anor 1980 ZLR 378 where
the interdict being sought was to stop the respondent from destroying a mining
dump it until litigation pertaining therefrom had been finalized. Christie indicates
that the requirements for a final interdict are the same of these specific
performance but are different to those of a final interdict. The requirements of
temporary interdict are:
1

The applicant or the person who seeks interdict must prove a clear
prima facie right i.e. in the sense that the right might be open to some
doubts, if the averments/submissions made by the applicant taken
together with averments made by the respondents are such that given

the possibility of providing further evidence the right will be proven.


2

There must be a reasonable apprehension of irreparable harm if the


interdict was not granted the Flamelilly case if the respondent had
proceeded to destroy the mining time is that there would be no mining
dump at the end.

There must be no other ordinary adequate remedy which would give


the applicant some protection which would seek through the interdict.
The balance of convenience must be in the applicants favour, this
means that the circumstances must be such that the prejudice suffered
by applicant if interdict were not granted would be greater than the
prejudice suffered by respondent if interdict were granted.

The

potential prejudice to the applicant should he succeed in the main


claim is that he will not be able to get an order for specific
performance. See the case of Gideon v Ngumo 1973 RLR 197. See
also Setlogelo v Setlogelo 1914 AD 221. On the other hand the
prejudice the respondent tend to suffer is being lend to freeze his
affairs. See Ericsson (Pvt) Ltd v Protea Motors Ltd and Anor 1973(3)
SA 655.