Study Unit 4 Performing Contractual Obligations

 ◦ ◦ ◦ The outcomes for this learning unit are that you should be in a position to: Discuss Agency Discuss the nature of performance Discuss contractual breach

 The essential, residual & incidental terms of a contract  Express and implied terms  ◦ Conditions The suspensive and resolutive condition  ◦ Valid, void & voidable contracts Duress, Misrepresentation & undue influence

 …When one person, with the necessary authority to do so, conducts a juristic act for and on behalf of another in such a manner that he obtains rights and obligations for the other person without him acquiring any rights or becoming accountable  Fouché (2007) pg 244

    One person acts on behalf of another The act is a juristic act The act is authorised The action results in a legal tie between two people, one of which was not involved in the original action

    By agreement By operation of law Through estoppel By ratification

   By agreement Principal gives Agent authority to act on his behalf No formalities required Can be by way of written Power of Attorney

  Where one party in absence of agreement has authority by law to represent another Eg: ◦ Guardian representing a minor ◦ Curator acting for mentally insane ◦ Partner representing a partnership or other partners

 Where a person creates the false impression that another person may act on his behalf and a third party acts on the strength of that (mis)representation, the “principal” can be bound by the false impression he created.

  Where the “principal” gives his consent or authority after the representation has taken place Unilateral act by principal

  The legal bond will exist between the principal and the third party.

The agent does not acquire any rights or duties

    To perform in accordance with the principal’s instructions Act honestly and in good faith Display care, skill & diligence Account to the principal

    To pay the agreed remuneration To account To reimburse the agent for all expenses necessarily incurred by him To indemnify the agent for all losses or liabilities incurred in performing the authorised act

  Where the agent acts on behalf of a pricipal without disclosing the fact.

◦ ◦ ◦ Requirements Agent must be authorised to act for principal Agent must have intended to contract on behalf of principal Agent must fail to disclose agency at all  Third party can sue principal or agent but not both

   Principal (not agent) liable if agent guilty of misrepresentation or duress Agent liable if he acts outside of his authority ◦ Third party may claim damages for  Breach of contract  Delictual damages for misrepresentation  Damages for breach of implied warranty Agent liable for any guarantees he has given (eg: that the principal will pay etc…)

     On fulfilment of the mandate By expiry of agreed time period Supervening impossibility of performance Death of the agent or principal By agreement

 Form and manner of performance should be as specified in contract between the parties unless it is clear that equivalent type of performance acceptable

  If date and or time for performance has been agreed upon, debtor has until then to perform If no agreement performance should be immediate or within reasonable time depending upon the individual circumstances

  Performance should occur at place specified in contract If no place specified, then debtor has to seek out the creditor to perform

 Unless it is clear from the contract that the debtor himself must perform personally, it is acceptable for an agent of the debtor or even a third party to perform  ◦ Performance must be tendered to the creditor Creditor can nominate an agent to receive performance

  In legal tender Debtor must stipulate what payment is for if multiple debts – other wise creditor may nominate  If party alleges performance, they bear onus of proof  If creditor refuses or frustrates properly tendered performance – breach by creditor

     Mora debitoris Mora creditoris Positive malperformance Repudiation Prevention of performance

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Mora Debitoris

◦ ◦ ◦ When the debtor fails to perform at the agreed time Two Requirements Performance must be delayed Delay must be the debtors fault

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Mora ex re

– where a time for performance has been set and debtor fails to perform, he is automatically in

mora



Mora ex persona

– where no time for performance has been set & creditor then demands performance within a reasonable time & debtor fails to perform

 ◦ Mora Creditoris When the Creditor causes the debtor’s performance to be delayed

    Performance must be dischargeable Debtor must tender performance Creditor must fail to co-operate & thereby delay performance Default must be due to the fault of the creditor

Default by Creditor Default by Debtor

Debtor’s duty of care reduced Creditor entitled to remedies for breach of contract Debtor entitled to any counter performance due by creditor

 ◦ ◦ When debtor performs contrary to the agreement Debtor tenders defective or improper performance, or; Debtors does something not allowed in terms of the agreement

 ◦ Behaviour by a party which indicates that they do not intend to honour their agreement Eg, where party denies the existence of the agreement or

    Specific performance Damages Cancellation Penalty clause (roukoop etc)