Chapter 13 Flashcards
(19 cards)
There are mechanisms to bring the
contract to an end lawfully:
1) Full performance on both sides, OR
2) In accordance with the provisions regulating the life of the agreement
Lifespan of a contract–
1) A relatively short life (a cash sale)
2) Longer but determined lifespan (a 10-year lease)
3) Seemingly have an indefinite lifespan (a contract of employment or a monthly lease
with no termination date)
4)
A relatively short life (a cash sale)
1) In the case of once-off contracts, where each party owes a distinct performance –
1.2) This brings the contract to its natural end.
1.3) Some provisions of the contract may nonetheless remain alive for a period
afterwards, but even these will usually terminate after a specified period of time
Seemingly have an indefinite lifespan (a contract of employment or a monthly lease
with no termination date)
1) In the case of longer-term relational contracts (such as leases or employment) –
2) The contract will usually make provision for the contract to run for a specific period
of time
3) Contain a mechanism for either party to bring the contract to an end.
However, the parties may insert provisions into their contract that are designed to regulate the consequences of a breach of the agreement:
1) A cancellation clause (lex commissoria);
2) A penalty clause to avoid practical difficulties when proving damages;
3) An acceleration clause, making the outstanding debt immediately due;
4) An interest clause regulating the amount or rate of interest payable if the debtor
defaults
5) A restitution clause regulating what has to be restored upon cancellation of the contract.
Three types of remedy available to an innocent party after a breach:
1) Remedies aimed at keeping the contract alive
2) Remedies aimed at cancelling the contract
3) Remedies aimed at compensating an innocent party for loss caused by the breach
Remedies aimed at keeping the contract alive:
1) Exceptio non adimpleti contractus.
2) Specific performance.
3) Interdict.
Remedies aimed at cancelling the contract:
1) In certain circumstances, the innocent party is entitled to cancel the contract, thus
terminating the contract
Remedies aimed at compensating an innocent party for loss caused by the breach
1) Claim for contractual or delictual damages (when actions constitute both breach and delict).
2) Claim for interest on amounts owing (mora interest).
Enforcement and cancellation are mutually exclusive:
1) The remedies for enforcement and the remedies for termination are mutually exclusive
2) That is, the innocent party is only entitled to rely on one or the other
3) However, it is possible to plead the remedies in the alternative.
For instance, if a party wants to cancel the agreement but is not sure that they are entitled to do so, they may claim cancellation of the agreement, and in the alternative, specific performance should they not be entitled to do so
Damages and interest cumulative to other remedies:
1) Claims for damages and interest are cumulative to the other remedies that the innocent party can prove they have suffered damages or are entitled to interest.
Thus:
1) A party can claim cancellation, plus damages, plus interest on the amount that is owed (including interest on the damages).
2) A party can claim specific performance, plus damages, plus interest.
A breach of contract constitutes an unlawful infringement of the other party’s rights that arise from the contract
1) One party fails to fulfil their obligations as specified in a contract, thereby violating the
contract, namely, the agreed benefits or performances each party expects to receive.
2) However, while a breach of contract primarily concerns the rights and obligations defined within the contractual framework
3) It can also simultaneously constitute a delict if the breaching party’s actions infringe on rights that exist independently of the contract.
Distinction from pre-contractual misstatements:
1) A delictual claim related to a breach of contract should be distinguished from one arising from pre-contractual misstatements.
2) Pre-contractual misrepresentations (statements made before entering into a contract) can constitute a delict if they involve deceit or fraudulent misrepresentation.
Choice of action: the innocent party has a choice to -
1) Sue as a delict if it caused harm, independent of the contractual obligations.
2) Sue based on breach of contract if the misrepresentation was guaranteed as part of the contract’s terms.
Damages for breach of contract:
1) When a breach occurs, the default remedy is a claim for damages.
2) However, these damages are typically limited to patrimonial loss, which refers to actual financial losses incurred as a direct result of the breach.
3) Any claim for non-patrimonial losses caused by the breach (such as pain and suffering, etc.) will have to be framed as a separate delictual claim
Two potential claims when a breach occurs:
1) Contractual claim: patrimonial losses that result directly from the breach.
2) Delictual claim: non-patrimonial losses, such as emotional distress or physical injury
resulting from the same set of facts that constituted the breach.
For a delictual claim, it is also required to meet the following five requirements:
1) Conduct
2) Wrongfulness
3) Fault
4) Causation
5) Damages
The question of whether patrimonial losses due to a breach of contract can also be claimed under delict law is complex:
1) Generally, the innocent party has a choice of remedies where the loss flows from injury to their person or property –
2) However, the claim is typically confined to contract law, where the loss is purely economic (such as lost profits or additional operational costs) and does not involve personal injury or property damage
