A contract is a mutual agreement between parties which is legally enforceable.

Discuss

the remedies for breach of contract. (30 points)

A breach of contract occurs when one party to an agreement fails to perform as promised in

the terms and conditions of a contract. More specifically, a breach of contract is a violation of

any agreed-upon terms and conditions within a valid contract. The breach could be any action

or lack of action from a late payment to a more serious infraction, such as the failure to

deliver a promised good or service. Whenever there is an alleged breach of contract, five

things have to be established. First, which party breached the contract; second is in respect of

which obligation the party breach did; third is, which obligations are reciprocal to the

obligation that was breached; fourth, is which form of breach the party committed and what is

the appropriate remedy in the circumstances.

Breach of contract constitutes a single cause of action. The aggrieved or innocent party

should therefore claim in one action all the remedies that he is entitled to. This is referred to

as the once and for all rule. He must claim all the damages he is entitled to, at the same time

because he cannot split his claim into one for a portion of his claim and the rest for institution

later, irrespective of the difficulties he may experience in calculating his full claim. He must

therefore claim future loss together with past loss. The rule aims to prevent a multiplicity of

actions based on a single cause of action and to ensure that there would be a definite end to

litigation.

Purpose of remedies for breach of contract

In the case of Custom Credit Corporation (Pty) Ltd v Shembe 1972 (3) SA 462 (A) it was

mentioned that remedies for breach of contract aim at either fulfilment of the contract or

termination of the contractual relationship. Whenever breach occurs, the innocent party has a

right to choose and elect to either uphold the contract or cancel it and claim appropriate
remedies commensurate with his or her election. This election can be express or inferred

from conduct.

Specific performance

The first remedy is specific performance and the aim is to uphold the contract obtain the

performance as promised. Specific performance is the primary remedy for breach of contract

and usually it is claimable. By claiming specific performance, the innocent party is asking the

court to order the defaulting party to exactly what he contracted to do or put differently, to

fulfil his or her contract obligations. For instance, in Intercontinental (Pvt) Ltd v Nestle

Zimbabwe, N had undertaken to deliver certain quantities of milk and failed to deliver the

milk. Intercontinental then went to the court for an application for specific performance.

Brennan’s Diesel Svcs (Pvt) Ltd v Tenda Bus Svcs (Pvt) Ltd establishes that an order for the

payment of a sum of money in terms of a contract is in fact an order for enforcement of the

contract.

The general rule under Roman Dutch law is that an innocent party has a right — in every

case of breach of contract — to a remedy of specific performance unless there are exceptional

circumstances which justify refusal of an order for specific performance. According to

Farmers Co-operative Society (Reg) v Berry, prime 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, a performance his undertaking in terms of the contract. As

remarked by Kotz CJ in Thompson v Pullinger ’the right of a plaintiff to the specific

performance of contract where the defendant is in a position to do so is beyond all doubt’

According to Savanhu v Marere NO and Others: he right to claim specific performance of a

contract by the other party is premised on the principle that the appellant must first show that
he has performed all his obligations under the contract or that he is ready, able, and willing

to perform his own side of the bargain. It therefore follows that the court will not decree

specific performance where the petitioner has broken the contract or made a material default

in the performance

It is important to note that the court has discretion whether or not to grant specific

performance. In Mufakose Housing Co-operative Society v Magozore, it was established that

the court’s discretion includes compelling the performance of a personal obligation under a

contract. In Minister of Public Construction & National Housing v Zescon (Pvt) Ltd, the court

held that the court’s discretion should not be exercised arbitrarily or capriciously. In

Farmers’ Co-operative Society (Reg) v Berry, the Court held that a party in breach of

contract does not have the option of purging his default by paying damages, but the injured

party may elect to demand specific performance, subject to the discretion of the court.

Circumstances under which specific performance cannot be ordered:

Where it is impossible to perform; Where the order causes undue hardship: In a contract for

personal services. In Winterton Holmes and Hills v Paterson, the Supreme Court accepted

that it would not order reinstatement (specific performance) where there has been a bitter

relationship between the employer and employee. However, in the Magozore case, the court

could not exercise the discretion to compel performance of a personal obligation under a

contract because doing so would infringe on freedom of association by compel a citizen to

associate with another against his will even if he is so bound in contract.

Where it would be difficult to supervise the Defendant to ensure that he performs properly. In

Ncube v Mpofu and Others, the Court reiterated the following principles from Haynes v King

William’s Town Municipality the discretion which the 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. As examples of the

grounds on which the courts have exercised their discretion in refusing to order specific

performance although performance was not impossible may be mentioned: a) where

damages would adequately compensate the plaintiff; b) where it would be difficult for the

court to enforce its decree; c) where the thing claimed can be readily bought elsewhere; d)

where specific performance entails a rendering of services of a personal nature.

Interdict

One remedy for a breach of contract is an interdict. An interdict is a court order either

restraining a person from doing a particular act or compelling a person to do a specific act.

Interdicts usually come in three forms namely:

i) Prohibitory Interdict

This is an order restraining a person from doing a particular acts

ii) Mandatory Interdict

This is an order compelling a person to do a positive act in order to remedy a wrong.

iii) Restitutionary Interdict

In International Trading (Private) Limited v Nestle Zimbabwe (Private) Limited 1993 (1)

ZLR, it was underscored that it is an order compelling a person who has disposed another of

his property to restore possession. It normally comes in the form of a spoliation order and all

that a party alleging spoliation needs to prove is that he was in peaceful possession and was

dispossessed unlawfully. Interdicts may be either interim or final. For an interim interdict to

be granted, Phillips Electrical (Pvt) Ltd v Gwanzura held that the innocent party has to

establish: a) a prima facie right (or a right on the face of it): b) a well-grounded

apprehension of irreparable harm if the interim relief is not granted and the ultimate relief is
granted: c) that the balance of convenience favours the granting of on interim interdict; and

d) that the applicant has no other satisfactory remedy.

Declaration of rights

Section 14 of the High Court Act [Chapter 7:06] empowers the High Court to issue a

declaratory order even if no consequential relief can be claimed. Declaratory orders can be

issued (at the discretion of the court) to resolve disputes on the existence, validity and

interpretation of a contract and the rights of a party to a contract. This remedy was discussed

in the case of Blue Ranges Ests (Pvt) Ltd v Muduviri & Anor 2009 (1) ZLR 368.

Cancellation

The cancellation remedy aims at ending the contract. Cancellation is an extraordinary remedy

and can be claimed only in special circumstances. The effect of cancellation is twofold. First,

cancellation extinguishes all existing and future unfulfilled obligations under the contract.

Second, cancellation creates an obligation to restore any performance that was made.

Damages

Damages are claimed only for financial loss. The locus classic is Victoria Falls and Power

Company Limited v Consolidated Langlaagte Mines Limited, where the court held that:

sufferer by such breach should be placed in the position he would have occupied had the

contract been performed, so far as that can be done by the payment of money, and without

undue hardship to the defaulting party. Rowland Electro Engineering (Pvt) Ltd v Zimbanks

emphasized this point as follows: The rationale for awarding damages to an aggrieved party

based on a breach of contract is to place that party in the position he would have occupied

had a breach not occurred by the payment of money and without causing undue hardship to

the defaulting party. A comparison is made between the patrimonial position that the plaintiff

would have occupied had the breach not occurred and the position that exists as a result of the

breach. The plaintiff would therefore be entitled to the difference where the former exceeds
the latter. According to Mudukuti v F C M Motors (Pvt) Ltd,512 `(t)he general rule is that

damages for breach of contract are to be assessed at the time of the breach of contract, the

time of performance or the time of cancellation.’ However, there are instances (as in a

hyperinflationary environment) where it is necessary to assess the quantum of damages as at

the time of trial in order to achieve justice between the parties.

REFERENCE LIST

Cases and materials

A Burrows, A Casebook on Contract (3rd edn Hart 2011)

E McKendrick, Contract Law: Text, Cases and Materials (OUP 2010)

Textbooks

Atiyah, P.S. (2000). An Introduction to the Law of Contract. Clarendon.

Beatson, J.; Burrows, A.; Cartwright, J. (2010). Anson's Law of Contract (29 ed.). OUP.

Collins, H. (2003). Contract Law in Context (4 ed.). CUP.

Goode, R.; McKendrick, E.. "3—4". Goode on Commercial Law (4 ed.). Penguin.

McKendrick, E. (2009). Contract Law (8 ed.). Palgrave.

Peel, E.; Treitel, G.H. (2011). Treated on the Law of Contract (13 ed.). Sweet and Maxwell.

Articles

R Stevens, "The Contracts (Rights of Third Parties) Act 1999" (2004) 120 Law Quarterly

Review 292

J Steyn, "Contract Law: Fulfilling the Reasonable Expectations of Honest Men" (1997) 113

Law Quarterly Review 433