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Corporate and Business Law- F4 (Zimbabwe)
Doctrine of fundamental breach
The doctrine of fundamental breach has unleashed numerous legal and judicial headaches. No proper definition can be given to it but it has been generally regarded as a breach that goes to the root of the contract or renders the contract inoperative. Charles Worth describes the doctrine as a failure to undertake a certain obligation that concludes an obligation. The fundamental breach doctrine is of English origin and our courts have ‘flirted’ with it. Thus Professor R.H. Christie submitted that: ‘Our courts have flirted with the English doctrine of fundamental breach but the romance has not blossomed, and it is probably even better that it should not as the doctrine is pregnant with difficulties.’ The application of this doctrine in the Roman-Dutch Law is traced in a number of cases of which the case of Harsales Ltd v Wallis (1956) bears testimony – where it was held that an exemption clause will not avail a guilty party to a breach that goes to the root of the contract.
However, complexities of this doctrine, which lead our legal writers into disliking this doctrine is the question of whether it is a rule of law or merely a rule of construction. According to Cheshire and Fifoot, a rule of law is to be applied whether or not it defeats the intention of the parties. A rule of construction exists to give effect to that intention. Our courts, even English courts themselves are not consistent as to whether the doctrine is a rule of law or construction. Thus in the case of Minor Shipping (Pty) Didcott J expressed doubt about the concept of fundamental breach and treated it as a matter of construction.
Following the acceptance of the fundamental breach doctrine in Roman-Dutch law, and since our common law is the Roman-Dutch law, the doctrine could be applied in Zimbabwean cases. This is illustrated by the case of Transport Crane Hire (Pvt) Ltd v Hurbert Davies and Co (Pvt)
Financial Training Company
Ltd (1991). The facts of the case are as follows. The Appellant purchased a Foden truck which
the respondent had assembled. After travelling 43,730 km, the steering column of the truck was found to have been improperly assembled by the respondent, causing it to fall apart and to veer off the road and overturn. The Appellant sued for damages based on negligence. The High Court ruled that the respondent had acted negligently but because of the existence of an exemption clause he was not liable.
The exemption clause read as follows: ‘The company hereby guarantees within a period of nine months or 75,000 km of delivery at its option either to repair or replace any part which may prove to be defective through material or workmanship … Liability for direct or consequential loss of whatsoever nature or however arising is expressly excluded.’ On Appeal, Korsah JA held that the breach of contract was a fundamental breach, and the exemption clause could not exempt the respondent from liability for such fundamental breach. McNally JA also held that the negligent assembly of the steering column was not an act intended to be covered by the exemption clause, properly construed, based on a policy approach to interpretation of such clauses in a contract.
This case clearly shows us that the fundamental breach doctrine was part of our law in contractual cases. However, that was the law as it was, the position has now changed with the coming of the Consumer Contracts Act [Chapter 8:03] which came into effect in 1994. It is therefore submitted that the statute overrides the common law. Where there is a clear statute law to regulate any matter that statutory provision should be applied. What the courts were trying to achieve by applying the fundamental breach doctrine is now regulated by a statute. In terms of s.5 (1)(d) of the Act read with s.4: ‘A court may find a consumer contract to be unfair for the purpose of this Act … if the consumer contract imposes obligations or liabilities which are not reasonably necessary to protect the interests of or if the consumer contract is contrary to commonly accepted standards of fair dealing.’ In terms of s.4(1)(c)(i) the court was empowered to cancel the whole or any part of the consumer contract, if it imposes obligations or liabilities which are not reasonable or if the contract is contrary to commonly accepted standards of dealing.
In so far as the Consumer Contracts Act is concerned there is nothing called ‘fundamental breach’ but the Act empowers the court to set aside contracts presumed to be unreasonably unfair. It can therefore be said that the fundamental breach doctrine is no longer part of our law. It was indeed part of our law before 1994 but now the Act takes precedence over the common law principle.
Financial Training Company
There are five remedies available for breach of contract or a threatened breach of contract. The remedies include specific performance interdict, declaration of rights, cancellation and damages. The first three may be regarded as methods of enforcement and the last two as recompense for non performance. It should be noted that, the choice between these remedies rests solely and primarily with the injured party, who may elect more than one of them either in the alternative or together of course subject to the overriding principles that he must not claim inconsistent remedies and that he must not be overcompensated.
Specific Performance Specific performance can be defined by any of the following; (i) An order to perform a specified act in pursuance of a contractual or any other obligation (ad
(ii) An order to perform a specified act or pay money (ad percunian solvendum). (iii) An order to perform a specified act in pursuance of a contractual obligation. A plaintiff is entitled to specific performance. Zimbabwean law is clear that a plaintiff is always entitled to claim specific performance and assuming he makes out a case his claim will be granted subject only to the court’s discretion. In the case of Farmers Co-op Society (Leg) v
Berry (1912) Innes J said, ‘Prima facie every party to a binding agreement who is ready to carry out his own obligation under it has a right to demand from the other party so far as it is possible ...’
Specific performance will not be granted where it is impossible to comply with the order, where it causes undue hardships on the defendant and generally in contracts for personal services like contracts of employment or where the item that is being claimed by the plaintiff is readily available on the market. It is true that courts will exercise a discretion in determining whether or not decrees of specific performance should be made. In the case of Haynes v Kingwilliamstown Municipality (1951) De Villiers AJA said,
‘The discretion which a court enjoys although it must be exercised judicially is not confined to specific types of cases, nor is it circumscribed by rigid rules. Each case must be judged in the light of its own circumstances’
In the case of Shakinovsky v Lawson and Smulowitz (1904), the purchaser, Shakinovsky, sued for the specific performance of a contract of sale of a shop and business with no alternative for
. it is an ordinary remedy to which. It appeared from the evidence that the seller. . a bona fide purchaser. the injured party usually adds to his prayer for specific performance an alternative prayer for damages. See the case of Woods v Walters (1921) wherein Innes C J said: ‘It is common practice . ‘. . . This remedy was underscored in the South African case of Government of Self-Governing Territory of KwaZulu v Mahlanga (1994) where Eloff J pointed out that. De Villiers AJA said in the case of Haynes v Kingwilliamstown Municipality (1951) ‘In our law a grant of specific performance does not rest upon any special jurisdiction.Financial Training Company damages. Where the thing claimed can readily be bought anywhere a decree of specific performance cannot be ordered. The nature and scope of the right might be inquired into. could not give specific performance as the subject matter to the sale had subsequently been sold to Smulowitz. to add to a prayer for specific performance an alternative prayer for damages. or at least a contention that there is such a right.’ It should however be noted that the decree of specific performance would not be granted where damages would adequately compensate the injured party. It takes the form of a court prohibiting the defendant from doing whatever is specified in the order. . the court is limited to a question of right. Cancellation The act of cancellation. Due to that possibility. The court emphasised that it will certainly not decree specific performance where the subject matter of a contract has been disposed to a bona fide purchaser or where it is impossible for specific performance to be effected. which is also sometimes described as acceptance of the repudiation. the court has no jurisdiction.’ It should also be borne in mind that courts are not there to rule on abstract concepts or any dispute and as far as declaratory orders are concerned. Page 4 . only legally recognisable and enforceable rights are determinable. Declaration of Rights This is remedy whereby parties approach the court for an order declaring the position of their rights.’ Interdict This is a remedy to prevent breach or threatened breach of contract. Lawson. . but in the absence of proof of such a right. in a proper case the Plaintiff is entitled … so in contracts for the sale of shares which are daily dealt with in the market can be obtained without difficulty specific performance will not ordinarily be granted .
such as sales. In essence. and without undue hardship to the defaulting party. The sufferer by such a breach should be placed in the position he would have occupied had the contract been performed . ‘Now. without the assistance of the court. is intended to terminate the primary obligations of the contract there and then but not retrospectively. leases and contracts of employment are frequently assessed according to principles that have evolved to meet the special requirements of the particular contract.’ Damages Damages for breach of certain special types of contracts. but once he has made his mind. . . but to put him in the position he would have been in if the contract had been properly performed. He is entitled to take reasonable time to make up his mind. The reinstatement cannot invariably be complete. In this case C ordered a supply of electric power from V on 25 February 1911. he is bound by that election .Financial Training Company rescission and repudiation may be performed by the innocent party himself. He can elect to take advantage of the event or he can elect not do so. Unlike damages for delict. C sued V for damages for loss in extraction. for it would be inequitable and unfair to make the defaulter liable for special consequences which could not have been in his contemplation when he entered into the contract . the court order would confirm the act which has already been done. . . The power was not actually supplied until 29 September 1912. In considering the principles to be applied Innes C J said. . V replied ‘we have duly noted these requirements and will make the necessary arrangements’. The object of cancellation unlike rescission.’ The law relating to awarding of damages ensures that undue hardship is not imposed on the defaulting party by obliging the sufferer to take reasonable steps to mitigate his loss or damage. Restitution by either party or both parties should therefore be ordered only to the extent necessary to avoid unjust enrichment. when an event occurs which entitles one party to a contract to refuse to carry out his part of the contract. See Feinstein v Niggoli (1981) in Segal v Mazziv (1920) Watermeyer AJ said. damages for breach of contract are not intended to recompense the innocent party for his loss. Additionally. See Victoria Falls and Transvaal Powerco Ltd v Consolidated Langlaagte Mines Ltd (1915) AD1. for deferred profits. that party has a choice of two courses. for loss on development and for loss on shaft-sinking. . ‘we must apply the general principles which govern the investigation of the most difficult question of fact – the assessment of compensation for breach of contract. V was informed that the power was required by 1 July 1912 and was for a new reduction plant. The latter gives rise to damages that flow naturally and generally from the kind Page 5 . the defaulting party’s liability is limited in terms of the broad principles of causation and remoteness.
Tindall JA stated: ‘It was of course the duty of the company to take all reasonable steps to mitigate the loss consequent to the breach of the lease.g. . Ltd (1977) wherein it was stated that: ‘the fundamental rule in regard to the award of damages for breach of contract is that the sufferer should be placed in a position he would have occupied had the contract been properly performed so far as that can be done by the payment of money and without undue hardship on the defaulting party . but the duty did not impose on the plaintiff an obligation to take any steps which a reasonable and prudent man would not ordinarily take in the course of his business. To that end two types of damages exist i. the smaller is extinguished and the larger reduced by the amount of the smaller debt. the principle was exhausted in the case of Hazis v Transvaal and Delagoa Bay Investment Ltd (1939). .Financial Training Company of breach of the contract and which the law presumes the parties contemplated as a probable result of the breach and damages that although caused by the breach of contract. As regards mitigation.’ All in all the principles have been re-stated by Corbett JA in Holmdene Brickworks (Pty) Ltd v Roberts Construction Co. Such agreement may be express or Page 6 .’ Glossary terms (a) Set-Off Where two parties to a contract are reciprocally indebted to each other. See also the case of Shartz Investments (Pty) Ltd v Kolovyrnas (1976). That contemplation is a prerequisite for special damages is a common trite principle enunciated in various case law. if one is larger than the other. ordinarily regarded in law as being too remote to be recoverable unless special circumstances are established attending the conclusion of the contract. A new obligation is introduced.e general damages and special damages. Lester Investment (Pvt) Ltd v Narshi (1951) (b) Novation Novation takes place where the parties to a contract agree to replace it completely with a new contract. the debts are automatically extinguished if they are of the same amount or. replacing the existing obligation e. a contract of sale being converted into a donation or one of exchange.
and of which the other party was unaware. obligations and powers that are vested in one or both of the parties to the contract. The rule will not be applied where there was a mutual mistake. (c) Locus standi in judicio A party desiring to enter into a contract must have the capacity to sue or be sued. The parties however must achieve consensus ad idem (meeting of minds) before a contract can come about. He cannot be heard to say that he meant his promise to be subject to a condition which he omitted to mention. he may face a claim based on breach of contract. (locus standi in judicio) according to the Legal Age of Majority Act (1982). Natural persons who have attained majority status (18 years) have locus standi in judicio. then there is a concluded contract. inebriates. Mhondoro Muchabaiwa v Katekwe (1984) Certain categories of persons such as unassisted infants. the parties honestly attaching different meanings to words in a contract which are not self-explanatory.. As was said by the court in Pieters and Co. Void and voidable contracts A valid contract gives rise to rights.When a man makes an offer in plain and unambiguous language which is understood in its ordinary sense by the person to whom it is addressed. This intention is determined or inferred from the manner in which the person concerned conducts himself. On the other hand a company that is registered in terms of the law acquires contractual capacity upon its registration (section 9 of the Companies Act). v Salomon (1991). There is therefore no consensus between Page 7 . It will do so only if the circumstances raise such a necessary inference. .Financial Training Company inferred from all the circumstances of the case. mentally ill persons. Any unexpressed reservations hidden in the mind of the promisor are in such circumstances irrelevant. Where a party understood something incorrectly it is said that he acted as a result of mistake and in cases of mistake one cannot be said to have consented to that which the other party has in mind. and accepted by him bona fide in that sense. The court will not lightly infer a novation. If the latter does not perform in terms of the contract. insolvent persons and enemy aliens lack locus standi in judicio. These rights always include a personal right to claim performance from the other party. (d) Quasi-Mutual Assent This is also known as the Smith v Hughes doctrine and essentially the position is that in deciding whether there was an intention to (where a dispute has arisen) the test is objective rather than subjective.
These factors which will be discussed in detail below are the following: 1. In Maritz v Pratley (1894) items were displayed for auction each bearing a number for identification. consensus will have been obtained improperly and therefore it would be defective. In George v Fairmead (1958). Mistake can be described as a misunderstanding or misapprehension by one or both of the parties regarding facts. The court ruled that there had been a mistake (error) regarding a fact material to the contract and consequently that no consensus had been reached and the contract was therefore void. The fact that the error is essential and therefore that there is dissensus between the parties is not sufficient on its own to render the contract void. Mistake (error) 2. From the foregoing it is clear that there are factors which may influence consensus between the parties to the extent that the contract may be rendered void and voidable. events or circumstances in the contract. This means that the mistake (error) must not be due to the negligence of the party who relies on mistake in order to avoid liability. In cases involving duress. Misrepresentation 3. He refused to pay separately for the mirror and was sued by the auctioneer for the purchase price. Mistake Error or mistake is one of the greatest defects that can occur in a contract. In addition the mistake must be a justus error (reasonable mistake). Duress 4. Prospective purchasers were requested to inspect the goods which were to be put up for auction. Such a contract would be voidable at the instance of the weaker party. A mirror was displayed on a marble table and Pratley made a bid on the table thinking that the mirror formed part of the table. for agreements can only be formed by the consent of the parties and there can be no consent where the parties are in error in relation to the object of their agreement.Financial Training Company the parties and likewise no contract. A guest at an hotel signed the register without acquainting himself with a clause which Page 8 . Undue Influence 1. An error is justus when it is reasonable or excusable in all the circumstances of a particular case. The rule is that a mistake renders the contract void if it is: (a) one of fact rather than law (b) essential (material) (c) reasonable (justus error) This mistake (error) must concern only the facts of the contract and in particular the essential facts of the agreement in order to have any influence on the consensus between the parties. undue influence and misrepresentation.
However before the purchaser bought the farm they were acquainted with the true facts and they nevertheless decided to go ahead and purchase the farm. he is bound by his choice and he loses the alternative option. (b) The representation was material (c) It was false in fact (d) The other party entered into the contract on the faith of the representation. Misrepresentation A contract can be set aside by the aggrieved party on the ground of misrepresentation where: (a) A representation was made by one party or his agent to the other in order to induce him to enter into the contract. The court decided that they had not been induced to purchase the farm by the misrepresentation and therefore the contract could not be rescinded. (Bowditch v Peel and Magill (1921). (a) He may ignore the contract and if sued on it use the fraud as a defence. 2. He has a choice between enforcing or rescinding the contract and once he has chosen. innocent and negligent misrepresentation. In our law a distinction is drawn between fraudulent/intentional. He must therefore prove that he accepted the represented facts as being true and that they constituted a reason for him to conclude the contract before he will be able to contest the contract. The person to whom the fraudulent misrepresentation was made has the choice of the following remedies. The choice between the enforcement and setting aside of the contract must be made by the innocent party within a reasonable time after knowledge of the deception. Page 9 . restitution and damages – Gous v De Kock (1887) (d) He may treat the contract as binding and claim damages for any loss he has suffered. George maintained that his action was a case of mistake but the court decided that it was not a reasonable mistake and therefore had no effect on the contract. (b) He may rescind the contract and claim restitution – Dibley v Furter (1951) (c) He may claim rescission of the contract. A party cannot claim misrepresentation unless he has been induced thereby to conclude the contract. The party alleging that a misrepresentation is fraudulent has to prove the absence of honest belief by showing in the words of Lord Herschell in Derry v Peek (1889) that a false representation has been made. The test which is applied is whether the innocent party would have concluded the contract if the misrepresentation had not been made. (1) knowingly or (2) without belief in its true or (3) recklessly careless whether it be true or false. In Poole and McLennan v Nourse (1918) a misrepresentation was made concerning the qualities of a farm.Financial Training Company indemnified the hotel from claims arising from theft.
The only remedy available in circumstances involving innocent misrepresentation is rescission and damages are not available. 4. causing him to conclude a contract as a result of this fear. It is now settled law that in appropriate cases damages are available for negligent misrepresentation. Duress Duress may be described as a threat or intimidation which engenders fear in a person. In our law the leading case on this subject is Broodryk v Smuts (1942) where Broodryk was threatened with internment or arrest if he were to refuse to enlist with the defence force. Autorama (Pvt) Ltd v Farm Equipment Auctions (1984). as well as the right to claim damages. Whilst the remedy of rescission is available for negligent misrepresentation for many years it was a debatable point as to whether damages were available for negligent misrepresentation in Zimbabwean law. The innocent party is entitled to claim back whatever he has parted with as a result of the contract but he is also obliged to return what he has taken from the other party. Rescission means that the parties have to be restored to the status quo ante. The party making the misrepresentation genuinely believes the facts to be true while they are actually false. The innocent party must have been threatened by the other contracting party and not by an outsider. The requirements for duress were set out in this case and are the following: (a) the fear must be reasonable (b) the fear must be caused by a threat of ‘considerable evil’ and directed at the contracting party or his family or property (c) it must be a threat of immediate danger which cannot be averted (d) the threat or intimidation must be contra bones mores (contrary to good morals) (e) the moral pressure which is exerted must cause damage. The remedy of rescission is available to all the three forms of misrepresentation. Page 10 . in other words it must be clear that a reasonable person would also have been fearful in the given circumstances. He is negligent if he should have verified the truth of the facts before conveying them to the other contracting party. Simple/Innocent Misrepresentation A misrepresentation made without fraud and without negligence is a simple misrepresentation. Harper v Webster (1956) Negligent misrepresentation occurs where the maker of a misrepresentation fails to display that degree of care which a reasonable man in his position would display. Duress renders the contract voidable at the option of the threatened person and he has the choice between enforcing and setting aside the contract. In order to succeed voiding the contract the fear to which the threat gives rise must be reasonable fear.Financial Training Company Coomers Motor Spares (Pvt) Ltd v Albania (1979) 3.
it must be caused by vis major (an act of God) or casus fortuitous (an inevitable accident). Patel v Grobbelaar (1974) Void ab initio One of the essential requirements for the validity of a contract is that performance must be possible. A distinction can be drawn between initial impossibility and supervening impossibility of performance. Once again because the weaker party’s consent has been improperly obtained the contract is consequently voidable at the instance of the person who has suffered. Initial impossibility of performance exists where performance was impossible at the time of the conclusion of the contact whereas supervening impossibility of performance refers to the case where performance was possible at the inception of the contract but subsequently became impossible. Undue Influence Undue influence and the consequences thereof were described by Fagan JA in Preller and Others v Jordaan (1956). is incapable of being traded or already belonged to the purchaser when the contract of sale was concluded. Between the two phenomena we are looking at events which cannot be foreseen with reasonable foresight in Page 11 . In other words. The requirements for undue influence are as follows: (a) one party obtains influence over the other party (b) this influence weakens the other party’s resistence and renders his resolve malleable (c) the party exerting the influence uses this influence in an unscrupulous manner (d) this influence leads to the conclusion of a contract which is to the detriment of the other party. The impossibility must be objectively beyond the control of the parties. With commercial contracts performance is impossible if the thing which has to be delivered no longer exists or never existed.Financial Training Company 5. Another form of impossibility usually involves physical impossibility for example the house which was to be surrendered for occupation has been razed to the ground. As a general rule it can be stated that if performance of the envisaged contract is impossible from the initial instance the contact will be void ab initio (invalid from the beginning). As the influence which one person has over another which weakens the latter’s resistance and renders his resolve pliable so that the other person may exercise his influence in an unconscionable manner to persuade the victim to conclude a prejudicial contract which he would normally not have concluded.
an outbreak of war will frustrate a contract. In Chandler v Webster (1904) the coronation of King Edward (VII) was postponed because of the sudden illness of the king and contacts for the hire of rooms along the route of the procession were as a result frustrated. For example. In Taylor v Caldwell (1866) the contract was deemed to have been frustrated after a music hall which had been hired for a series of concerts was burnt down. Solomon A. Page 12 . he is discharged from liability. the second World War broke out and the appellants who were German nationals were interned as enemy aliens and their business was wound up under the relevant wartime legislation. Flamman and Co Ltd v Kokstad Municipality (1919). From these cases. So also where a contract has become impossible of performance after it had been entered into the general rule was that the position is then the same as if it had been impossible from the beginning.J said: ‘By the civil law a contract is void if at the time of its inception its performance is impossible. In Condor v Barron Knights (1966) the drummer of a pop group became ill and was forbidden by his doctor from performing for more than four nights each week thereby frustrating his contract which extended for seven nights. the municipality had concluded a contract with the appellants in terms of which the latter were to supply electricity to the town for a number of years. Some terse examples drawn from English law will probably suffice. The authorities are clear that if a person is prevented from performing his contract by vis major or casus fortuitous. During the currency of the agreement. Equally the basis of the contract may be negated as when an agreement is dependent upon some future event which does not take place. This rule applies to all contracts where the passing of the risk rule does not form part of the contract. it is clear what effect supervening impossibility of performance has on a contract. In the case of Peters. under which could be included such an act of state as we are concerned with in this appeal. as would illegally trading with the enemy (Avery v Bowden (1855).Financial Training Company as much as they cannot be prevented with reasonable care. Upon their release from prison they were sued for breach of contract by the Municipality and the court decided that supervening impossibility had terminated the contract.C. Apart from subsequent physical impossibility there may be a change in the law after the contract was made which renders it illegal to perform the contract. As soon as performance has become impossible in its entirety the contract is terminated and the parties are freed of their obligations.’ The concept of supervening impossibility as we know it in Roman-Dutch law more or less equates with the doctrine of frustration in English law.
In Benjamin v Myers (1946) M let a garage to B. for example the contract of sale. Y by contract agreed to supply A with a certain quantity of coal – two trucks of forty tons each per week – for a period of twelve months. and he had to bear the burden of that risk. (d) Where the impossibility is partial. When Y sued for damages. However under Roman-Dutch law a contract is not terminated by supervening impossibility of performance in the following situations: (a) where performance has become impossible as a direct result of the debtor’s own wrongful act. the magistrate found that A and P were justified in cancelling the contract and Y could not receive damages. the contract is not terminated by supervening impossibility. That is a risk which he took upon himself when he entered into the contract. although called upon to fulfil the contract.Financial Training Company In cases where the passing of the risk rule forms part of the contract. Owing to a railway strike which might have continued for an indefinite period. It was held that the appeal should be dismissed.’ (c) When performance is more difficult or costly but not impossible to undertake (Herman v Shapiro and Company (1926) supra). . where the purchaser bears the risk for incidental damage. Curlewis J said: ‘The fact that the plaintiff was prevented by the strike from carrying out his obligations is no answer to the respondents. Herbstein AJ said: ‘A defendant cannot rely on a self-created impossibility . . B pleaded that he had been prevented from selling petrol by the Controller of Petrol.’ (b) When the debtor has taken it upon himself the risk of performance becoming impossible. Y appealed. in which case the obligation remains in existence in so far as the part that is still possible is concerned (Stansfeld v Kuhn 1940). was unable to supply the coal required between 7 and 15 January 1914 and notified A to that effect. On breach of this undertaking M was entitled to cancel the lease. A thereupon cancelled the contract. It was held that finding the Controller had in fact prevented B from selling petrol but had done so because B has been found guilty of a breach of the relevant regulations. M replied that this was a result of B’s wrongful act. In Yodaiker v Angerhrn and Piel (1914). the magistrate’s judgment granting an order of ejectment should be upheld and B’s appeal dismissed. In my opinion the magistrate was correct in holding that the performance of the contract was made impossible as a direct result of the defendant’s own wrongful act. B undertook that at all times he would be available for the sale of sufficient supplies of such brands of petrol and oils as he was permitted to stock and sell on the premises in terms of the lease. Page 13 . B ceased to hold and sell petrol and M cancelled the lease and sued for B’s ejectment. The purchaser is still obliged to perform although performance has become impossible for the seller Pahad v Director of Food Supplies (1949). Y.
South African Reserve Bank v Photocraft (Pvt) Ltd 1969 in which a written lease agreement provided that ‘the lessor hereby grants to the lessee an option to renew this lease for a further period of three years at a rental to be mutually agreed upon under the same terms and conditions as herein contained’. Held. Schneier and London Ltd v Bennet (1927) B was employed as manager of S and L’s timber department at a monthly salary of forty pounds plus a small commission to be agreed at a later date between the parties. Upon a temporary disability preventing one party from fulfilling his obligation the contract continues. significance or consequence as to be unenforceable.’ Held. Those where the agreement is not final and there are still terms to be negotiated the contents of which cannot be determined. But this does not cover the situation in which one party is temporarily disabled from fulfilling his undertaking. P. the lessee exercised the option but the bank which had purchased the building replied that it was unable to negotiate in regard to any extension of the lease as the buildings would be demolished. If the disability persists for a period which judged on the circumstances of the particular case renders it unreasonable that the other party should continue bound whilst receiving no benefit from the contract such party is entitled to terminate the contract.Financial Training Company (e) Where the debtor is only temporarily disabled from fulfilling his obligation. Baretta v Rhodesia Railways (1914). it is discharged. He was dismissed Page 14 . And in Baretta v Baretta (1924) a contract between the parties by which a debt was acknowledged and certain property pledged. provided that the debtor ‘hereby undertakes to pay off a substantial sum every year. Tredgold J said: ‘The law is clear that when a contract becomes finally and completely impossible of performance by reason of an act of state.’ Void for vagueness Those agreements where the language used is so vague and uncertain that it cannot be decided what was in fact agreed upon by the parties. The clause was of no force or effect in the absence of any agreement as to rental and further that the agreement to negotiate was so vague as to its import. This stipulation was too vague to be enforceable in law.
In Anegate v Muckulal’s Estate (1954) A was employed by his uncle who agreed to pay him ‘something. which rate he contended was reasonable.Financial Training Company before any agreement had been reached as to commission. In Katekwe v Muchabaiwa (1984) the Supreme Court ruled that as a result of the Legal Age of Majority Act upon attaining eighteen years of age an African woman acquires locus standi in judicio (contractual capacity). In our law an agreement which is so vague that its meaning cannot be ascertained by a court is void ab initio (from the initial instance). From the foregoing it is quite clear that if an agreement is perceived by the courts as too vague it becomes void for vagueness and of no force or effect. sometime for his services’. It seems impossible to say what is the meaning of the words ‘small commission on the turnover’. Page 15 . As a result all African women older than eighteen years of age are emancipated from the authority of guardians (like their male counterparts). The agreement is too vague to enforce. Contract made void due to age of consent The Legal Age of Majority Act. On the other hand the mere fact that a contract appears to be incomplete or uncertain does not render it void for vagueness if its meaning can in fact. There was therefore in this case an implied term requiring the uncle to pay a reasonable remuneration. 1982 conferred majority status on all Zimbabweans above the age of eighteen years. He sued S and L for commission at the rate of one-fifth per cent on turnover. In Baretta v Baretta (1924) a contract between parties by which a debt was acknowledged and certain property pledged. Held. The court said that this stipulation was too vague to be enforced in law. be determined by a court on the evidence before it. Undue influence A contract can be set aside by the aggrieved party on the ground of undue influence where as was said by Fagan J A in the case of Preller and Others v Jordaan (1956). The court held that the language of the contract was not so much vague as silent and the amount of remuneration could easily be determined by having recourse to the ordinary rules governing implication of terms into a contract. provided that the debtor ‘thereby undertakes to pay off a substantial sum every year’. African women who were hitherto perpetual minors acquired majority status at the age of eighteen years.
J alleged that the transaction had taken place when he was old. In the case of Preller and Others v Jordaan (1956) J. J further argued that he would not have done so had he not been so weak and exhausted and under P. The burden of proof lies with the party who wants to ask the court to set aside a contract on the ground of undue influence and he must prove the following: (i) The other party exercised an influence over him (ii) This influence weakened his powers of resistance and made his will pliable. claimed re-transfer of four farms that he had donated and transferred to P. would not have concluded. This was done under a power of attorney which P has persuaded G to sign. mentally weak and exhausted through P.s wife and farm labourers. spiritually. Influence may be exerted by anyone but it is more likely to exist where there is a special relationship between the parties such as that of parent and child. an elderly farmer. ostensibly the balance due in respect of money lent by P to G. In the meanwhile P had in turn donated and transferred ownership of three of the farms to his son and daughter. to be administered by P for the benefit of J. G would not have signed the power of attorney with normal freedom of volition as he had not borrowed any money from P. (iii) The other party exercised this influence in an unscrupulous manner in order to induce him to consent to a transaction (a) which is to his detriment and (b) which he with normal free will. In a judgment which underlines the fundamental distinction between void ab initio and voidable agreement the appeal court ruled that as the transaction which was induced by undue influence was voidable and not void and as transfer ad been passed to the two children J could not claim back the three farms from them. In Patel v Grobbellaar (1974) G claimed the cancellation of a Mortgage Bond registered against property owned by him in favour of P for $40 000·00. Page 16 .Financial Training Company (a) One person obtains an influence over another which weakens the latter’s powers of resistance and renders his will pliable. A lower court ordered cancellation of the contract and on appeal against that decision by P the Appeal Court ruled that he had satisfied the onus of proof and that the appeal should be dismissed. On the other hand if the contract had been void ab initio J would have been able to recover all the four farms.s influencing him in an improper and unlawful manner to give and transfer the farms to P. doctor and patient. attorney and client. At all relevant times. who at that time was his doctor. However he could still claim the one farm which remained in the hands of the defendant (P) at the time of the action.s influence. teacher and pupil. (b) Such a person then uses his influence in an unconscionable manner to persuade the other to agree to a prejudicial transaction which he would not have entered into with normal freedom of will. G believed P possessed supernatural powers and as a result of this belief P acquired an influence over G.
. . The requisite governmental permit had not been obtained. It is a well established if not universal rule that the court is bound to refuse to enforce a contract which is illegal even though no objection to the legality of the contract is raised by the parties. no action arises) is rigorously applied by our courts and even if the parties are unaware of the illegal nature of the agreement. Certain types of contract are forbidden at common law and therefore prima facie illegal. The firm successfully sued in the Magistrate’s Court for the balance of the price. a firm of auctioneers in breach of a Transvaal statute.Financial Training Company Illegal contracts One of the primary essentials of a valid contract is that for it to be enforceable the agreement must be lawful. sold to S certain cattle on Sunday. Innes CJ said: ‘when a court is asked to enforce a contract which the law expressly forbids. A valid contract cannot come into existence if the agreement is unlawful because (i) it is prohibited by statute. The ex turpi causa rule (from a base cause. The court held that the sale was illegal and therefore unenforecable. the prohibition referring to either the form of the contract or the performance to be made. Equally.’ In Lion Match Co Ltd v Wessels (1946) W sued for the price of wood sold and delivered by him to LM. the court of its own motion raised the point that the sale was illegal and refused to enforce it. On appeal to the Transvaal Provincial Division. the agreement between the two parties is void ab initio (from the initial instance) on the basis of common law illegality. It is clear that the video cassette was smuggled into Zimbabwe in contravention of the Customs and Excise Act and because the agreement between Harry and Michael is tainted by statutory illegality it is unenforceable. (ii) it is prohibited by common law. In Cape Dairy v General Livestock Auctioneers (1924). being regarded as contrary to public policy or contra bonos mores (contrary to accepted standards of morality). the courts will not enforce it. it is not only justified but bound to take cognisance of the prohibition and the consequent illegality . It is often said that an agreement which violates statute law or the common law is void ab initio (from the initial instance). Some of the more common examples are the following: (i) agreements in restraint of trade (ii) agreements in interfering with justice Page 17 .
The maxim in pari delicto pitio est conditio possedentis applies where the parties are equally in the wrong. to retain possession of the property in question. In this case the agreement pertains to pornography and it would be viewed with disapproval by the courts. a party who has fulfilled his obligations under an unlawful agreement is not permitted to reclaim what he has performed. This verdict would be in reliance on the judgment of Schreiner J in the case of Petersen v Jajbhay. This exception to the general principles of cession was applied by Ludorf J in the Seegrey Bag Man case where it was held that the presence of a conditional clause tips the scale in favour of the view that the contract is not capable of cession.Financial Training Company (iii) agreements to stifle the prosecution for a crime (iv) agreements allowing the parties to avoid judicial remedies and to take the law into their own hands (v) agreements derogating from marriage (vi) agreements encouraging immorality. As a general rule. public policy seems to me to point prima facie to his removal from the property otherwise in case of this … there would be unjust enrichment …’ Page 18 . cession will not prevail. The learned judge notes that. if justice is to prevail. In other words the consequences of an agreement containing an illegality is that the agreement does not constitute a contract. Chanetsa is entitled. to the relaxation of the in pari delicto rule. (York Estates v Wareham 1949) The maxim in pari delicto pitio est conditio possedentis Kerr notes that although consent of the party against whom the right is held is not necessary. The exception to this rule is that where there is a conditional clause in a contract. ‘… the lease though invalid. The position that he who is in possession will prevail would be relaxed for considerations of justice between the parties. there are certain exceptions to this principle. It is void of the legal effect intended by the parties.
Page 19 . The purchaser is entitled to the aedilitian remedies which are the actio redhibitoria (rescission of contract) and the actio quanti minoris (reduction of the purchase price). This warranty is inherent to the contract of sale and in terms thereof the seller guarantees that the thing sold is free of latent defects or other abnormalities. the tacit warranty against latent defects comes into operation. one which would not be apparent upon reasonable inspection by the average diligent person. The underlying rationale is that the purchasers would not have bought the hockey sticks had they known of the defect beforehand. In Dodd v Spitaleri (1946) the purchaser bought a horse which was suffering from a debilitating disease. he was still able to recover his purchase price. Jane and the other team members bought are latently defective. through no fault of the buyer. A latent defect is a hidden defect. Before the purchaser can hold the seller liable for latent defects he will have to prove: (i) that the defect existed at the time of conclusion of the contract (ii) that the defect is in fact latent i. The seller is obliged to deliver the thing sold to the purchaser without defects. the purchasers must return the merx (hockey sticks). When there is a latent defect in the thing sold the purchaser has special remedies against the seller. It is abundantly clear that the new Bashem hockey sticks which Sue. if the article has been destroyed. the defect is so serious that the hockey sticks cannot be used for their normal purpose or for the purpose for which they were bought and accordingly the buyers are entitled to cancel the contract. Since redhibitoria involves cancellation of the contract.e it could not readily have been noticed (iii) that the purchaser was unaware of the defect at the conclusion of the contract and that the defect is material in that it renders the merx useless or less useful for the purposes for which it was bought. The seller is therefore liable for any latent defects in the thing sold irrespective of whether he was unaware of such defect at the time of the conclusion of the contract or not. If the merx is latently defective. but that does not prevent the buyer from instituting the actio redhibitoria. Actio redhibitoria In this case. he is of course unable to return the article. On the other hand.Financial Training Company Latent defects One of the primary obligations of the seller is to guarantee the purchaser against the existence of latent defects in the merx (merchandise). There was conclusive veterinary evidence that the disease was incurable although the purchaser had the horse shot.
A latent defect is one which would not be apparent upon a reasonable inspection by a prudent man even though it might not escape the notice of an expert. This duty only relates to defects which are material and an objective test is used to determine materiality. However the manure – having already been used could not be returned.Financial Training Company And in African Organic Fertilizers v Sieling (1949) the buyer sought to rescind the sale of kraal manure which proved unfit for the purpose for which the seller knew the buyer intended it. A seller who sells property voetstoots (as it stands) is protected from liability in the event that the merchandise turns out to be latently defective. namely the Actio Redhibitoria (action for rescission of the contract) and the Actio quanti minoris (reduction of purchase price). The court held that the purchaser could still recover his purchase price. When the rainy season arrived it was discovered that there were bad leaks of water through the roof. As a result of the fraud the court ruled that the seller was not absolved of liability. Where the sale is not voetstoots and the buyer discovers that the merchandise is latently defective he is entitled to claim one of the Aedilition remedies. notwithstanding the voetstoots clause. The rationale underlying this remedy is that if the purchaser had known of the defect prior to the conclusion of the agreement of sale he would not have bought the article when he did. However a voetstoots clause does not protect the seller from fraudulent nondisclosure of latent defects. Thus in the Zimbabwean case of Matambo v Chakauya (1992) the plaintiff purchased a house voetstoots from the defendant. If the latent defect is of such a nature that it simply affects the value of the thing. The court ruled that the defect was a latent one and the defendant had deliberately not disclosed it at the time of the conclusion of the agreement of sale. Warranty against latent defects One of the fundamental obligations of the seller is the duty to deliver property which is free from latent defects. a buyer who inspects the property cannot be heard to complain of the patent defects which the inspection should have revealed. the actio quanti minoris in terms of which a reduction in price is claimed is instituted. The defect is so fundamental that it makes the merchandise unsuitable for the purpose for which it Page 20 . The reduction amounts to the difference between the purchase price and the actual value of the thing sold. (Dibley v Furter 1951). In Roman–Dutch law. The Actio Redhibitoria is an action for cancellation of the contract because the defect is so serious as to make the property unfit for the purposes intended by the contract.
Before the purchaser can hold the seller liable for latent defects he will have to prove that: (1) the defect existed at the time of the conclusion of the contract (2) the defect is in fact latent i. repayment of all expenses with regards to the delivery and preservation of the article and reimbursement of improvements effected by him. Some examples of latent defects in the merchandise are: (a) lung sickness in cattle (Haviside v Jordan (1903) (b) heartwater disease in sheep (Ackermann v Komfass (1904) (c) a welded crankshaft in a motor vehicle (Goldblatt v Sweeney (1918) (d) a leaking roof (Matambo v Chakauya (1992) Under the Actio Redhibitoria. if the merx has perished due to the very defect complained of and in the absence of fault on the part of the purchaser he will still be entitled to recover the purchase price despite the fact that the merchandise would be incapable of redelivery to the seller. (b) if the article has been materially damaged because of the purchaser’s negligence or by a person for whom he is responsible. There was conclusive veterinary evidence that the disease was incurable and to save it from any further pain the purchaser had the horse shot. The purchaser must however return the article together with anything that has accrued to it.Financial Training Company was bought. On the other hand. The court ruled that the purchaser could recover his purchase price despite the fact that he was unable to return the horse. In Dodd v Spitaleri (1949) the purchaser bought a horse which was suffering from a severe bone disease. interest. By instituting this action.e it could not readily have been noticed (3) the purchaser was unaware of the defect at the conclusion of the contract and that (4) the defect is material in that it renders the merx useless or less useful for the purpose for which it was bought. He thus claims the return of the purchase price. it is a condition precedent that the purchaser should restore the article plus any fruits and accessories to the seller if he wants to recover the purchase price and his interest back. The purchaser forfeits the right to the remedy of redhibitoria in the following situations: (a) if the article is not capable of redelivery to the seller. And in the case of Marks v Laughton (1932) the buyer sought to rescind the sale of eggs which had been condemned as unfit for human consumption and as a consequence had already been Page 21 . (d) where the defect is of a trivial nature. he cancels the contract. (c) where the purchaser by exercising unequivocal acts of ownership over the article has delayed to such an extent as to amount to a waiver.
Page 22 . Depending on the circumstances they offer him only cancellations or a price reduction. the Actio Redhibitoria may nevertheless apply even where goods cannot be returned if this is because they have been destroyed due to the latent defects and without fault on the part of the purchaser . . In Odendaal v Bethlehem Romery (1954) the purchaser bought livestock feed form a dealer. The seller was held liable for damages because he was a dealer with expert knowledge regarding that which was sold. Aedilitian remedies are available to the seller only in cases where the thing sold has latent defects. The seller argued that the buyer’s inability to restore the eggs was fatal to his right to rescind the contract. Under Actio quanti minoris. the intention of the seller is to defraud the purchaser. The court said. (b) where the seller is the manufacturer of the thing sold or a dealer who publicises his expert knowledge and skills regarding the article he may also be held liable ex empto for damages.’ The Actio quanti minoris (action for reduction of the purchase price) is instituted when the latent defect is not so material as to render the article completely useless. but both parties were unaware of this. Damages caused by the delay in delivery may be awarded in addition. the purchaser might opt not to rescind the contract and have the purchase price reduced in circumstances in which if he had so desired he could have cancelled the agreement on account of the gravity or seriousness of the defect.Financial Training Company destroyed by the local authority. Alternatively. The feed was infested with a particular germ. they are given in addition to the Aedilitian remedies) which are as follows: (a) where the seller acted fraudulently by not disclosing to the purchaser the existence of a latent defect of which he was aware. the defect however affects the value of the article. (c) where the seller gives an express warranty against latent defects. thirteen head of cattle died. However ordinary damages cannot be claimed in the case of latent defects except in three cases (and where ordinary damages are awarded for latent defects. The dealer dealt almost exclusively in stock feeds. After the purchaser had fed the feed to his stock. This is not simply withholding information. ‘despite the basic prerequisite that latently defective goods must be returned. . he will be liable for damages if there should be a defect in the thing purchased. Failure to deliver in a sale agreement The general principle is that a seller who fails to deliver may be ordered to do so by an order of specific performance. The purchaser keeps the article but claims a price reduction which is the difference between the purchase price and the actual value of the article.
If the buyer claims damages instead of or as an alternative to specific performance. the defaulting party’s liability is limited in terms of the broad principle of causation and remoteness to: (a) those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach and (b) those damages that although caused by the breach of contact are ordinarily regarded in law as being too remote to be recoverable unless. It should be noted that when the scope of an exemption clause is in issue. ‘where two parties have made a contract which one of them has broken. The general approach of our courts is that the injured party is entitled to be put in the position he would have been in had the contract been properly performed. Damages The problem area predominantly revolves around the issue of damages for breach of contract and the approach which the Supreme Court is likely to adopt. Plywood Products Ltd v Tropical (Commercial and Industrial) Ltd 1955. Novik v Benjamin 1972. Where there is no available market. so far as this can be done by the payment of money and without undue hardship to the defaulting party.Financial Training Company Rhodesia Cold Storage and Trading Company Ltd v Liquidatior Beira Cold Storage Ltd 1905. Melfort Motors (Pvt) Ltd v Finance Corp of Rhodesia Ltd 1975. the normal measure of damages is the difference between the price and the value (that is. the prevailing market price) on the date delivery ought to have been made. neither an exemption from liability for representations nor for warranties will relieve the seller from liability for delivering property of a different kind from that promised. in the special circumstances attending the conclusion of the contract. the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally or such as may reasonably be supposed to have been in the contemplation of Page 23 . (Shatz Investments v Kalovyrnas 1976) As was noted by the court in the famous English case of Hadley v Baxendale. the parties actually or presumptively contemplated that they would probably result from its breach. In order to ensure simple justice between man and man. the damages must be calculated from the best evidence available. The buyer’s loss of profit resulting from non-delivery of the property may be recovered if the seller knew at the time of contracting that the buyer required the property for resale or for use in manufacturing for sale.
After R had used all the bricks. Corbett JA said: ‘It seems to me that respondent’s loss was one flowing naturally and generally from appellant’s breach of contract and one which the law should presume to have been contemplated by the parties as a probable result of the breach.00 damages as per item (i) and declining to award $5 000 000. falls fairly and squarely within the category of loss for which general damages are available. To remedy the position R demolished the walls containing defective bricks and rebuilt them with bricks obtained from another source. so far as that can be done by the payment of money and without undue hardship to the defaulting party. . it discovered that a substantial number were defective. in as much as they manifested ‘efflorescence’ which made them crumble and decompose. Held.Financial Training Company both parties at the time they made the contract . In Holmdene Brickworks v Roberts Construction Co 1977) R bought bricks from H for the erection of factory building. . The reinstatement cannot invariably be complete. H’s appeal should be dismissed. Damages under item (i) flow naturally from the breach and should be deemed to have been within the contemplation of the parties whereas those falling under (ii) are remote. Likewise.’ There are a number of cases drawn from the Roman-Dutch law jurisdictions which define the concept of causation and remoteness of damages in breach of contract situations in a very neat way. the Supreme Court would be Page 24 . therefore. The cost of doing so amounted to a sum of R27 000 which R now claimed from H on the basis that it represented consequential loss suffered by reason of a latent defect in the goods sold. for it would be inequitable and unfair to make the defaulter liable for special consequences which could not have been in his contemplation when he entered into the contract.00 damages as per item (ii) is correct. Also in the case of Victoria Falls and Transvaal Power Company v Consolidated Mines (1915) the court ruled that the sufferer by such a breach should be placed in the position he would have occupied had the contract been performed. It.The Transvaal Provincial Division gave judgment for R and H appealed. In light of cases applicable to our jurisdiction it would appear that the High Court’s approach in awarding $20 000 000.
In Jockie v Meyer (1945) J. This principle has been restated in a number of cases.’ To ensure that undue hardship is not imposed on the defaulting party the sufferer is obliged to take reasonable steps to mitigate his loss or damage. told him that there was a mistake as to the room number and asked him to return the key. . ‘The fundamental rule in regard to the award of damages for breach of contract is that the sufferer should be placed in the position he would have occupied had the contract been properly performed.Financial Training Company expected to adopt the same approach. Damages for sentimental loss in breach of contract The general approach of our courts in the case of breach of contract is that we are not concerned with the mental or bodily sufferings of the creditor. J did so and was then told that the hotel was full and there was no room Page 25 . In addition the defaulting party’s liability is limited in terms of the broad principle of contractual causation and remoteness of damages to: (a) those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach. (b) those damages that although caused by breach of contract are ordinarily regarded in law as being too remote to be recoverable unless in the special circumstances attending the conclusion of the contract the parties actually or presumptively contemplated that they would probably result from its breach Shartz Investments Ltd v Kalovyrnas (1976). Corbett J A in Holmdene Brickworks v Roberts Construction (1977) made the following observation. a Chinese and second officer on a British ship having reserved a room at M’s hotel in Port Elizabeth was allotted the key to room 309 and took occupation. . The action for damages in such a case is intended to place the creditor as much as possible in the same position as regards his property as he would have been in if the contract had been performed. so far as this can be done by the payment of money and without undue hardship to the defaulting party . A few minutes later M sent for J. The general approach of our courts would appear to be that in an ordinary commercial contract damages may not be claimed for sentimental loss or injured feelings unlike in an action founded in the law of delict or tort. Hence the damages must have been in satisfaction of some pecuniary loss.
Tindall. ‘If the contract is not primarily a commercial one in the sense that it affects not the plaintiff’s business interests but his personal. He did so on the faith of S’s sales brochure which described the holiday in very attractive terms. The appeal court set aside the portion of the damages relating to J’s humiliation and annoyance. Mrs D engaged S. . The argument then would be that emotional and mental satisfaction is an important plank of the contract. the upset and the frustration caused by the breach. She paid a deposit for which she was given a receipt.. One such case is for a holiday or any other contract to provide entertainment and enjoyment. . Allowing damages for sentimental loss Lord Denning MR said: ‘In a proper case damages for mental distress can be recovered in contract .. damages can be given for the disappointment. as it is when a travel agent makes specific representations about the facilities and entertainment available at a hotel. J sued M in the Magistrates court for two hundred pounds damages and was awarded fifty pounds damages. Magistrate was not entitled to award damages for the injury to the Plaintiff’s feelings which he suffered as a result of the refusal of accommodation by the defendant’ As an exception to the general rule it can be said that where the pleasure to be obtained from the proper performance is an important aspect of the contract. In the event the holiday was a great disappointment and most of the things that had been advertised in the brochure like a house party. the distress. The real reason for the breach of contract was J’s race. In Jarvis v Swans Tours Ltd (1973) J. skiing etc were not provided. a professional photographer to take photographs for her wedding. The court ruled that damages could competently be awarded.’ In Diesen v Samson (1971). a solicitor aged about 35 years booked a 15 day Christmas winter sports holiday. social and family interests. Judge of Appeal said:- ‘I have come to the conclusion that the . S failed in breach of his contract to appear at the wedding or at the reception. If the contracting party breaks his contract.. As a result Mrs D had no photographs of her wedding and claimed damages for the resulting injury to her feelings. or a photographer undertakes to take wedding photographs the courts may take mental distress into account in awarding damages. forty pounds of which was in respect of the humiliation and annoyance felt by J. the door is not closed to awarding damages for Page 26 .Financial Training Company for him..
where there is a material breach. the injured party must take reasonable steps to mitigate his loss. This position was codified and classified in the Consumer Contracts Protection Act. the approach to the court in this case will depend on whether or not there was a breach by Virgin Airlines. for a party to be exempted the exemption clause must be reasonable and it must not go to the root of the contract as was enunciated in the celebrated case of Hubert Davies v Crane Hire (1995). the question which shall remain unanswered is that of damages.’ In summation. It is contended inter alia on behalf of Virgin Airlines that they are exempted from liability through the operation of the alleged exemption clause in the contract. Essentially the piece of legislation seeks to protect vulnerable consumers from unreasonable and vague contractual provisions to the extent that the court was given the power to strike down any unfair clauses in consumer contracts. Specific and general damages It is an established principle of contract that. the injured party may claim from the other party damages such as he can prove he has suffered as a result of the breach.Financial Training Company mental suffering should the court think that in the particular circumstances the parties to the contract had such damages in their contemplation . It is likely that in view of this piece of legislation. The law relating to exemption clauses is very trite. In addition. the High Court of Zimbabwe is likely to strike out the exemption clause in question and as such. . Page 27 . Be that as it may. in so far as that can be done by the payment of money and without undue hardship to the other party. These principles have been re-stated by Corbett JA in Holmdence Brickworks (Pvt) Ltd v Roberts Construction Co Ltd (1977) where he aptly underscores the following ‘the fundamental role in regard to the award of damages for breach of contract is that the victim should be placed in the position he would have occupied had the contract been properly performed. At common law. in appropriate and limited cases an exception is made to award damages for sentimental loss as well. in assessing damages. The injured party is entitled to be put in the hypothetical position he would have been in had the contract been properly performed. the court only awards such damages as naturally flow from the breach (general damages) or as may reasonably be supposed to have been in the contemplation of the contracting parties as likely to result from the breach (special damages). it can be noted that although the general rule is that our courts will award damages for patrimonial or material loss in breach of contract cases. . To ensure the other party does not suffer undue hardship. so far as this can be done by payment of money and without undue hardship on the defaulting party’.
contemplation is pre-requisite if one is to succeed. At most the court is likely to grant damages for one night.’ As regards claims (a) to (c) clearly these are general damages. The primary requirements of a valid offer are as follows: (a) the offer must be clear and unambiguous. (Baker v Crowrie (1962) (d) The offer must be made with the intention that is shall serve as an offer so that it may be accepted and result in a contract coming into existence. This is so unless in the special circumstances attending the conclusion of the contract. Page 28 . the parties actually or presumptively contemplated that they would probably result from its breach. The South African position was put forward in Lavery and Co Ltd v Jungheinrich (1931) and upheld in Shatz Investments (Pty) Ltd v Kalovyrnas (1976) that the defaulting party’s knowledge of special facts must have been imparted to him in circumstances amounting to a tacit contract that he would undertake liability for special damages should a breach occur. The Zimbabwean position here. If any of the material terms of the offer are vague and obscure or ambiguous. If an offer is addressed to a specific person it cannot be accepted by a third party. An offer is usually addressed to a specific person but it can be made to the world at large (the general public). however.’ This essentially points to those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach and those damages that. remains unclear. although caused by the breach of contract are ordinarily regarded in law as being too remote to be recoverable. as the damages for the other night were due to no-one’s fault but an act of God. the offeree will not be able to form an idea of what the offeror has in mind. the court is likely to take into consideration the aspect of supervening impossibility in the form of vis major caused by adverse weather conditions.Financial Training Company In Victoria Falls and Transvaal Power Company Ltd v Consolidated Langlaagte (1915) the court had occasion to explain the issue of damages where it stated that ‘the defaulting party’s liability is limited to the broad principle of causation and remoteness. As regards special damages. Specific performance of the contract An offer is an unconditional declaration by the offeror of his intention to conclude a contract while all the terms on which he is prepared to contract are set out in this declaration. on claim (a). (b) the offer must be complete (c) the offer must be communicated to the offeree. However.
The plaintiff then sued for breach of contract and the court ruled that the plaintiff had made a counter offer which ‘rejected the offer previously made by the defendant’. because as soon as the defendant’s offer to sell on certain terms was rejected by the plaintiff making a counter offer to buy on different terms. the injured party has a right to claim specific performance (an order compelling a party to a contract who is in breach. Watermeyer rejected this new arrangement. However the courts will exercise a discretion in determining whether or not decrees of specific performance should be made. Plaintiff then agreed to pay £950·00. Murray sued for specific performance or alternatively £1000 in damages for breach of contract. to perform his obligation in the manner required by the terms of the contract) if ready to carry out his obligations under it. F then sued B asking for specific performance of a contract to deliver 1200 bags and in the alternative. Thus he could not afterwards ‘revive the proposal of the defendant by tendering an acceptance of it’ and therefore there existed no obligation of any sort between the parties. In general. he cannot be bound by any subsequent acceptance of his original offer unless he so wishes. Murray agreed. But by now the defendant no longer wished to sell. Specific performance as a remedy Specific performance is a remedy aimed at the fulfilment of the contract because when it is claimed by the innocent party. In Farmers’ Co-op Society v Berry (1921) B who was a member of F and as such obliged to send in his whole crop to F. it follows that the defendant’s offer was no longer open for acceptance. damages and addressing the question of specific performance the court ruled that: ‘Prima facie every party to a binding agreement who is ready to carry out his own obligation Page 29 . The court ruled that there was no contract and therefore no breach. but then through his attorneys unilaterally drew up and signed an agreement stipulating that the £1000·00 was to be paid only after the current lease on the farm had expired. he is trying to achieve the result envisaged at the conclusion of the contract by the parties. Also in the case of Watermeyer v Murray (1911) Murray sought to buy Watermeyer’s farm for £1700·00. Murray then tried to revert to the original offer but Watermeyer now refused to sell. Watermeyer offered to sell at that price provided Murray paid all expenses plus £1000 immediately the agreement was signed. notified it that he had a crop of 1200 bags of mealies but later refused to deliver any to F. The principle underpinned by the two cases is that where an offer has been revoked by a counter-offer and the original offerer has in turn rejected such counter offer. Plaintiff then agreed to pay £1000·00 after all.Financial Training Company In Hyde v Wrench (1840) the defendant offered to sell land to the plaintiff for £1000·00. The defendant rejected this. The fundamental principle here is that a counter offer revokes the original offer to which the counter offeror may therefore not return unless the original offeror agrees.
. It is true that the courts will exercise a discretion in determining whether or not decrees of specific performance should be made. It will certainly not decree specific performance where the subject matter of a contract has been disposed of to a bona fide purchaser or where it is impossible for specific performance to be effected. in such cases it will allow an alternative of damages. The court said that it was not practicable to award specific performance and the purchaser had to contend with damages. Each case must be judged in light of its own specific and peculiar circumstances. may be mentioned (a) where damages would adequately compensate the injured party. ‘Now a plaintiff has always the right to claim specific performance of a contract which the defendant has refused to carry out but it is in the discretion of the court either to grant such an order or not. shares etc.’ Examples of the grounds on which the courts have exercised their discretion in refusing to order specific performance although performance was not impossible.Financial Training Company under it has a right to demand from the other party. for example. if the subject matter of the contract can easily be bought on the open market as is the case with items like cars. so far as it is possible a performance of his undertaking in terms of the contract. As was noted by the court in Woods v Walters (1921) ‘It is common practice to add to a prayer for specific performance an alternative prayer for damages . . MR ‘have never dreamt of enforcing agreements strictly personal in Page 30 . L could not give specific performance as he had subsequently sold the same business to Smulowitz who had no notice of the previous sale. nor is it circumscribed by rigid rules. (b) where it is impossible to effect In Shakinovsky v Lawson and Smulowitz (1904) where the plaintiff purchaser sued for the specific performance of a contract of sale of a shop and business with no alternative claim for damages.’ The discretion which the court enjoys in awarding (or declining to award) must be exercised judicially and is not confined to specific types of cases. The injured party usually adds to his prayer for specific performance an alternative prayer for damages. ‘The courts’. bicycles.’ (c) where the subject matter of the contract involves the rendering of services of a personal nature Since it is undesirable and indeed in some cases impossible to compel an unwilling party to maintain continuous personal relations with another it is well established that a contract for personal services is not specifically enforceable at the suit of either party. said Jessel.
’ To ensure that undue hardship is not imposed on the defaulting party the sufferer is obliged to make reasonable steps to mitigate his loss or damage. Page 31 . or whether they are agreements for the purpose of pleasure or for the purpose of scientific pursuits. ‘The fundamental rule in regard to the award of damages of breach of contract is that the sufferer should be placed in the position he would have occupied had the contract been properly performed.Financial Training Company their nature. An action for specific performance by the plaintiff was dismissed by the court because full compliance with the agreement would have resulted in a positive danger to the health of the Municipality’s citizens. In breach of contract cases it is quite clear that the courts award specific performance on a discretionary basis rather than as a matter of course. Hence the damages must have been in satisfaction of some pecuniary loss. so far as this can be done by the payment of money and without undue hardship to the defaulting party . The action for damages in such a case is intended to place the creditor as much as possible in the same position as regards his property as he would have been in if the contract had been performed. (d) where the order would work great hardship on the defaulting party or the public at large If the effect of a decree of specific performance is to cause undue and great hardship to the defendant and members of the public alike the courts are unlikely to award it. After some time the defendant was unable to honour the agreement because of a crippling drought. Undue hardship The general approach of the Zimbabwean courts in the case of breach of contract is that they are not concerned with the mental or bodily sufferings of the creditor. In addition the defaulting party’s liability is limited in terms of the broad principle of contractual causation and remoteness of damages to: (a) those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach. whether they are agreements of hiring and service. In Haynes v Kingwilliamstown Municipality (1951) the defendant contracted to supply the plaintiff with 250 000 gallons of water per day for a number of years. This principle has been restated in a number of cases.’ (Rigby v Cannol 1880). or for the purpose of charity or philanthropy. being the common relationship of master and servant. . Corbett J A in Holmdene Brickworks v Roberts Construction (1977) made the following observation. .
a solicitor aged about 35 years booked a 15 day Christmas winter sports holiday. . J sued M in the Magistrates Court for £200 damages and was awarded £50 damages £40 of which was in respect of the humiliation and annoyance felt by J. . damages can be given for the disappointment. J did so and was then told that the hotel was full and there was no room for him. He did soon the faith of S’s sales brochure. . the upset Page 32 . The appeal court set aside the portion of the damages relating to J’s humiliation and annoyance. told him that there was a mistake as to the room number and asked him to return the key. or a photographer undertakes to take wedding photographs the courts may take mental distress into account in awarding damages. a Chinese and second officer on a British ship having reserved a room at M’s hotel in Port Elizabeth was allotted the key to room 309 and took occupation. which described the holiday in very attractive terms. The argument then would be that emotional and mental satisfaction is an important plank of the contract. In Jockie v Meyer (1945) J. One such case is for a holiday or any other contract to provide entertainment and enjoyment. . If the contracting party breaks his contract. as it is when a travel agent makes specific representations about the facilities and entertainment available at a hotel. skiing etc were not provided. The real reason for the breach of contract was J’s race. Judge of Appeal said: ‘I have come to the conclusion that the . Tindall. the distress. Allowing damages for sentimental loss Lord Denning MR said: ‘In a proper case damages for mental distress can be recovered in contract . In Jarvis v Swans Tours Ltd (1973) J. Magistrate was not entitled to award damages for the injury to the Plaintiff’s feelings which he suffered as a result of the refusal of accommodation by the defendant’ As an exception to the general rule it can be said that where the pleasure to be obtained from the proper performance is an important aspect of the contract.Financial Training Company (b) those damages that although caused by breach of contract are ordinarily regarded in law as being too remote to be recoverable unless in the special circumstances attending the conclusion of the contract the parties actually or presumptively contemplated that they would probably result from its breach Shartz Investments Ltd v Kalovyrnas (1976). In the event the holiday was a great disappointment and most of the things that had been advertised in the brochure like a house party. The general approach of our courts would appear to be that in an ordinary commercial contract damages may not be claimed for sentimental loss or injured feelings unlike in action founded in the law of delict or tort. A few minutes later M sent for J.
it will not be treated as a supervening impossibility because it would obviously be unfair to treat the contract as discharged when the interruption might turn out to be of short duration.’ In Diesen v Samson (1971). Mrs D engaged S. but in William Maine & Son (Pvt) Ltd v Rhodesia Railways 1976 a ministerial Page 33 . Irresistible force includes legislation or act of state making performance illegal. . This will happen if it is interrupted by irresistible force of inevitable accident of a contract requiring continuity of performance. However.Financial Training Company and the frustration caused by the breach. . Thus variation and discharge of contracts are all as a result of the act of the parties to the contract.’ In summation. the door is not closed to awarding damages for mental suffering should the court think that in the particular circumstances the parties to the contract had such damages in their contemplation . ‘if a contract is not primarily a commercial one in the sense that it affects not the plaintiff’s business interests but his personal. It was said in Strachan v Lloyd Levy (1923) that because contracts are made by agreement so may they be unmade by agreement but they cannot be unilaterally varied or discharged. such as a declaration of war . S failed in breach of his contract to appear at the wedding or at the reception. in appropriate and limited cases an exception is made to award damages for sentimental loss as well. However. it can be noted that although the general rule is that our courts will award damages for patrimonial or material loss in breach of contract cases. Beretta v Rhodesia Railways (Ltd) 1947 shows how in such a case the contract is not discharged by operation of law but may be cancelled by the party to whom the performance is due if the interruption continues for an unreasonably long time. Cancellation resulting from repudiation or breach is probably the next most common. variation or discharge of contracts can also take place as a result of the operation of law. Supervening impossibility Performance of a contract is the most common method of discharge of contracts. social and family interests. She paid a deposit for which she was given a receipt. As a result Mrs D had no photographs of her wedding and claimed damages for the resulting injury to her feelings. if this happens in a contract of employment. a professional photographer to take photographs for her wedding. The court ruled that damages could competently be awarded.
It will not be a case of supervening impossibility if the parties did foresee and made provision for or accepted the risk of the very event that has happened. so obedience to it did not excuse non-performance. Page 34 .Financial Training Company directive given without statutory authority was held not to be irresistible force.