Breach of

Contract and
Remedies
Basic Principles:
pp107 - 119

Breach of contract
Breach of contract may take 5 forms:
Mora debitoris
Mora creditoris
Repudiation
Positive malperformance
Prevention of performance

Mora debitoris

Occurs when performance is possible

but debtor, who is aware that
performance is required, fails to
perform on time.

Requirements for a debtor to be in

mora:
1. Performance due and possible

Date for performance stipulated in contract

(gives rise to mora ex re)

Mora debitoris contd

No date stipulated: demand made by

creditor (interpellatio) gives rise to mora
ex persona

Demand made by creditor must give

debtor a reasonable time to perform.

2. Obligation must be enforceable

Creditor must have valid right to

performance and debtor must have no
defence for non-performance.

Mora creditoris

Occurs when creditor delays in giving

assistance to debtor where this is
required for him to perform.

A creditor who obstructs performance is

in mora if:
1. Performance is due

If no time for performance has been agreed

upon, the creditor must be given reasonable
notice to accept performance.

Mora creditoris contd

2. The debtor tenders proper
performance

Debtor must tender performance in terms of

contract to creditor, who must be given
opportunity to accept it.

The creditors mora does not excuse

the debtor from performing

When the creditor is in mora, she

cannot argue that debtors failure to
perform was breach of contract.

Positive malperformance
Occurs when debtor performs, but
performance is defective or contrary to
terms of the contract.
2 forms of positive malperformance exist:
Debtors performance is incomplete or
defective. (Positive obligation)
Debtor does something which contract
prohibits him from doing. (Negative
obligation)

Repudiation
Occurs when a party, who has no lawful
excuse not to perform, indicates an
intention not to perform some/ all duties
under a contract.
Under certain circs, a party may lawfully
repudiate.
Eg. misrepresentation, duress, material
breach by other party.

Repudiation which occurs before due

date for performance = anticipatory
breach

Repudiation contd
For repudiation the debtor must notify the
creditor that he will not be performing
under the contract.
The debtors intention may be inferred from
the facts.

Where repudiation is anticipatory, the

creditor may seek remedies for breach
immediately, or wait for performance
date.

Prevention of performance
Occurs when there is an inability to
perform as a result of the actions of one
of the parties.
May result from the actions of the creditor
or the debtor.

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Remedies for breach of

contract
The major remedies for breach of
contract are:
Specific performance
Cancellation
Damages

In addition a party may ask for a

declaration of rights.

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Declaration of rights
Where there is confusion about a right or
obligation in a contract, either party may
apply to the High Court for an
interpretation of that right or obligation.
A party who seeks an interdict or specific
performance will often seek a declaration
of rights in addition.
Santos Professional Football Club (Pty) Ltd v
Igesund 2003 (5) SA 73 (C)

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Specific performance
An order of specific performance compels
the defaulting party to perform as
promised under the contract.
May be obtained via an interdict, which
prevents a breach/ threatened breach of
contract.
Interdict may be:
Mandatory: requires a party to perform a
particular act
Prohibitory: prevents a party from performing
a particular act.
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Specific performance
contd
Interdicts:
Eg. Situation of successive sales.

Court has discretion whether or not to

grant an interdict. Applicant must show:
A clear right
An injury, well founded fear of injury
No other remedy exists

For our purposes an interdict will be

regarded as a form of specific
performance.
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General principles of specific

performance
Generally there is a right to specific
performance.
The court has a discretion whether to
award S.P., however, and may refuse.
Particularly where:
Performance is inappropriate (debtor is
insolvent)
Performance is contrary to public good
It would be unduly harsh to expect the debtor
to perform

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General principles contd

S.P. may also be refused where cost of
compliance to defendant is out of
proportion to benefit to plaintiff.
Cases where S.P. was refused:
Haynes v King Williams Town Municipality
1951 (2) SA 371 (A)
York Timbers v Minister of Water Affairs and
Forestry 2003 (4) SA 477 (T)

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General principles contd

In South Africa courts may enforce S.P.
on a contract of personal service.
Santos Professional Football Club v Igesund

If a court refuses to award S.P., the

aggrieved party may still seek damages.

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Specific performance and

reciprocal obligations
In a reciprocal contract, a plaintiff may
only claim S.P. where he is prepared to
perform his own obligation.
Where a plaintiff has not performed his
reciprocal obligation and tries to claim
S.P., the defendant may raise the
defence of the exceptio non adimpleti
contractus.
Motor Racing Enterprises (Pty) Ltd v NPS
(Electronics) Ltd 1996 (4) SA 950 (A)

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The exceptio non adimpleti

contractus
If plaintiff claiming S.P. has performed his
reciprocal obligation, but the performance
is defective and the defendant raises the
exceptio defence, the courts may grant
the plaintiff a reduced S.P.
BK Tooling (Edms) Bpk v Scope Precision
Engineering (Edms) Bpk 1979 (1) SA 391 (A)

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Cancellation
Parties may at any time agree to cancel a
contract.
Here we deal with unilateral cancellation.
This may only be done:
For material breach
In terms of a cancellation clause

Aggrieved party has election whether to

cancel contract or uphold it (and claim
S.P.).

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Cancellation contd
If a party elects to cancel the contract, he
must notify the defaulting party.
In some circumstances conduct may be
sufficient notification of cancellation.

Effect of cancellation:
Contract ceases to exist
Restitution must occur (to extent possible)

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Cancellation contd
Cancellation may occur where:
There has been a material breach
There is a cancellation clause

If on breach, the aggrieved party does not

cancel within a reasonable period of time,
in the circumstances of the contract it
may be argued that he has waived the
right to cancel.

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Damages
Object of contractual damages is to put
the aggrieved party in the (financial)
position he would have been in had the
contract been properly performed.
Contractual v delictual damages:
Contract damages aim at making the
contractual bargain available (positive)
Delictual damages aim to compensate for loss
suffered as a result of the wrongful conduct of
another (negative)

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Contractual v delictual
damages
A contractual claim is limited to financial
loss.
A delictual claim extends beyond this to
non-financial loss, such as injured
feelings or pain and suffering.
Under certain circumstances a party may
have a claim under contract or delict.
Van Wyk v Lewis 1924 AD 438

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Quantifying damages for

breach of contract
Court must determine what the financial
position of the plaintiff would have been
had there been no breach.
Court will take into account loss which
was foreseen by the parties:
Gains not made
Loss actually suffered

Eg. Sale of a painting guaranteed to be a

Picasso

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Quantifying damages
contd
In a claim for breach of contract one may
not claim non-patrimonial (eg. emotional)
loss.
Jockie v Meyer 1945 AD 354
Administrator, Natal v Edouard 1990 (3) SA
581 (A)

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Quantifying damages
contd
Two important principles limit the amount
recoverable by a plaintiff for breach of
contract:
Damages must be reasonably foreseeable as
likely to flow from the type of breach in
question. (General damages)
Damages which are usually regarded as too
remote may be claimable if parties (in the
circumstances of the contract) actually
contemplated that type of harm occurring.
(Special damages)

The relevant time for determining whether

a party foresaw or contemplated loss is
the time of conclusion of the contract.
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Quantifying damages
contd
Example cited by Kerr (Basic Principles,
p 117)
Victoria Laundry (Windsor) Ltd v Newman
Industries Ltd [1949] 1 All ER 997
English case illustrating the contemplation
principle

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Quantifying damages
contd
The innocent party must attempt to
mitigate the loss.
She must take reasonable steps to minimise
her loss.

Onus is on defaulting party to prove

innocent party failed to mitigate her loss.

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Damages and penalty

clauses
Parties may agree on a penalty to be paid
in the event of a breach of contract.
Governed by Conventional Penalties Act
15 of 1962.
However, in terms of the Act, damages
may not be claimed in addition to the
stipulated amount.
Parties may agree to vary this rule by contract

A court may reduce a penalty which is out

of proportion to loss suffered.
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