Transcript Slide 1
Theme 3: 4
Breach of Contract
Party fails to honour his contractual obligations in the
form of:
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Mora debitoris
Mora creditoris
Positive malperformance
Repudiation
Prevention of performance
Debtor does not perform timeously in terms of the
contract.
Requirements:
◦ Performance must still be possible
If performance is impossible due to late performance it would not be
breach in terms of mora debitoris, but prevention of performance.
◦ Debtor fails to perform timeously
If date and time of performance is stipulated, debtor is automatically in
mora if he does not perform on time.
in mora ex re : no request for performance by creditor required
If date and time of performance is not stipulated, the creditor must
request performance, by delivering a notice of demand, to place the
debtor in mora.
in mora persona: Time set must be reasonable. If the debtor fails to
perform he is set in mora.
◦ Performance already due and enforceable
If performance is impossible due to late performance it would not be
breach in terms of mora debitoris, but prevention of performance.
◦ Delay due to the debtor’s fault
Failure to perform must be intentional or negligent. Not performing due
to circumstances beyond his control will not be breach of contract.
Consequences of mora debitoris:
◦ Legal obligation between the parties perpetuates.
◦ Legal tie is not terminated unless performance becomes
impossible without the fault of the parties.
◦ The debtor bears the risk that the performance could become
impossible while he is in mora and will not be excused for
that.
Creditor fails to accept proper performance by the
debtor or does not co-operate in order to enable
debtor to perform.
Requirements:
◦ Performance must still be possible
If performance is impossible due failure to co-operate it would not be
breach in terms of mora creditoris, but prevention of performance.
Impossibility without fault is not breach of contract.
◦ Creditor delays performance
Only possible where co-operation of the creditor is required.
◦ Performance due and enforceable
No obligation exists to accept performance prior to arranged date and
time.
Performance can be rejected if it is subject to a suspensive condition.
◦ Proper performance offered by debtor
Refusal to accept performance substantially defective does not constitute
mora creditoris.
◦ Delay due to creditor’s fault
Defective performance my be rejected. Intentional or negligent failure to
accept performance will result in breach of contract.
Consequences of mora creditoris:
◦ Debtor not excused from performing
Debtor still has to perform unless performance becomes
impossible without fault of the debtor.
◦ Mora debitoris cancelled
Mora debitoris and mora creditoris cannot exist simultaneously.
◦ Debtor’s duty to take care of the object diminished
Debtor now only liable for damage caused intentionally or by
gross negligence.
◦ Obligation perpetuated
The creditor bears the risk that the performance could become
impossible while he is in mora and will not be excused for that.
Refers to the contents or the quality of the
performance.
Requirements:
◦ Positive duty
If defective performance is delivered the debtor is guilty of
positive malperformance.
◦ Negative duty
Person must refrain from doing something, dut does it anyway.
◦ Fault
Fault is not required. Liability can be avoided eg. Act of God
Consequences of positive malperformance
◦ Creditor can rely on contractual remedies:
Cancellation
Specific performance
Damages
A party to the contract communicates his intention to
no longer be bound to his obligations in terms of the
contract, without lawful justification.
Requirements:
◦ An act
Words or conduct / Expressly or tacitly
Notice of cancellation / malperformance / no performance /
etc.
◦ Intention to repudiate
Objective test is applied: Would the reasonable man have come to
the conclusion that the contract is repudiated?
Consequences of repudiation
◦ Acceptance of repudiation is not required to constitute
breach of contract.
◦ Contract is not automatically terminated, the prejudiced
party has the choice to accept or reject the repudiation.
Forms of impossibility:
◦ Initial impossibility:
No contract comes into being.
It must be clear that the performance is objectively impossible,
difficulty or inconvenience to perform is not sufficient.
◦ Subsequent impossibility:
Contract comes into being but is terminated due to impossibility.
◦ Performance rendered impossible through culpable conduct:
Contract is valid and enforceable
Requirements:
◦ Fault
Consequences of prevention of performance
◦ Debtor prevents performance, creditor may...
Cancel contract, reclaim performance and claim damages
Uphold contract, claim performance and damages.
◦ Creditor renders performance impossible, debtor may...
Cancel contract, return performance and claim damages
Uphold contract, claim counter-performance and damages.