Transcript Law of contract prevention of performance & mora creditoris

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Explain the nature of prevention of performance, with
specific reference to the distinction between absolute
and relative prevention of performance.
List and discuss the requirements for prevention of
performance.
Distinguish between prevention of performance and
other forms of breach of contract generally.
Discuss the specific consequences of prevention of
performance.
Discuss cancellation on the grounds of prevention of
performance.
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Van der Merwe et al Chapter 10 pp. 366-369.
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CASE:
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Administrator, Natal v Edouard 1990 (3) SA 581
(A).
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Conduct after conclusion of the contract by which
the debtor makes it impossible for himself to
perform.
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Conduct: positive act or neglect to perform.
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Impossibility may be total or partial.
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Physically impossible, but also for all reasonable
and practical purposes impossible.
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Medical doctor undertook to sterilise a patient
immediately after the birth of her third child.
Doctor failed to perform sterilisation, with the
result that the woman became pregnant again.
Doctor’s failure amounted to prevention of
performance in terms of his failure to
(successfully) sterilise the patient.
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Can occur before, on or after date set for
performance.
Performance can be absolutely (objectively) or
relatively (subjectively) impossible.
Absolute prevention predicts malperformance
with absolute certainty.
Relative prevention anticipates
malperformance only with reasonable
certainty.
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Breach of contract in the form of prevention of
performance is complete as soon as
performance has been prevented.
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Can only constitute breach if conduct infringes
a contractual obligation and is therefore
wrongful.
Vis maior, casus fortuitous: extinguishes the
obligation.
Above: no breach, element of wrongfulness is
excluded.
Fault is a requirement of prevention of
performance.
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Mora: performance is still possible, however late.
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Positive malperformance: Performance has been
rendered, but is defective. Prevention takes place
before performance.
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Repudiation: predicts eventual malperformance
with relative certainty, while prevention predicts
malperformance with absolute certainty.
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No order for specific performance can be
granted.
If performance has become only partially
impossible, a creditor can claim specific
performance of possible part.
The debtor remains bound despite
impossibility of performance.
Creditor may choose to uphold the contract or
resile.
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Learning outcomes:
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Shortly discuss the nature of mora creditoris.
List and shortly discuss the requirements for mora
creditoris.
Distinguish between mora creditoris and other
forms of breach of contract in general.
Critically evaluate and discuss the special
consequences of mora creditoris.
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Van der Merwe et al Chapter 10, p. 372.
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CASES:
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Pienaar v Boland Bank
LTA Construction v Minister of Public Works and
Land Affairs.
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CREDITOR wrongfully fails to render his cooperation to enable the debtor to perform.
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Can occur before performance by the debtor.
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LTA Construction v Minister of Public Works & Land
Affairs:
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1. Performance must have been capable of being
fulfilled.
2. Debtor must have made proper performance or
at least have tendered performance.
3. Creditor must have failed to accept performance
tendered or refused to co-operate with it being
made.
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4. The creditor or his employees must cause the
delay.
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5. The creditor must be at fault (element of faultintent or negligence).
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Remember: Mora creditoris isn’t the only form of
breach able of being committed by creditor. See
examples on pp. 123-124 of study guide.
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Appellant borrowed an amount of money from the
first respondent.
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When debt had to be paid back, a third party paid
the debt on behalf of the appellant.
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Boland Bank as creditor refused to accept
payment, since it was not made by the debtor
himself.
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Court decided that if a third party performed
on behalf of the debtor, it is seen as if the
debtor him-or herself performed.
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This would even be the case where
performance was made by a third party against
the wishes of the debtor.
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Exceptio non adimpleti contractus.
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BK Tooling v Scope Precision Engineering.
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Obligations are reciprocal: Created “one in
exchange for the other”.
Reciprocal contract: performance by a plaintiff is a
REQUIREMENT for the enforceability of his claim
for counter-performance.
Party to reciprocal contract may withhold
performance in order to secure counterperformance.
The right to withhold performance: Exceptio non
adimpleti contractus.
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It is an extraordinary remedy, not an action
with which to commence litigation, but merely
a “claim in replication”.
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FACTS:
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At the end of 1973 the appellant received a
drawing for the implementation of a rubber
fitting tot the engines of certain Ford vehicles.
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A company called Paulstra would manufacture
such fittings and deliver same to Ford.
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In order to manufacture these fittings, Paulstra
needed metal moulds.
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The drawing received by the appellant from
Paulstra provided complete measures, and
allowed a tolerance of 0,5 mm.
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It was to be symmetrical, consisting of two
identical halves that would fit on top of another.
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Appellant made the necessary drawings and at the
end of 1973 requested the respondent to finalise
the metal moulds to create a prototype.
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Prototype was presented to Paulstra, who found
it acceptable.
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Paulstra then placed an order for 16 moulds at
R5000 each.
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The appellant only received the products on the 19th
of June 1974.
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Appellant had not yet paid the respondent for the first
order of moulds, and the respondent was unwilling to
manufacture a second order.
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Respondent also went overseas and only returned on
the 20th of July 1974. By that time, the appellant was
already under huge pressure from Paulstra to deliver
the order.
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On the 25th of August 1974 Paulstra tested the
moulds. They did not comply with the agreed
specifications.
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On the 16th of August the respondent
contacted the appellant for payment of the
first order. The appellant refused to pay as the
work was unsatisfactorily done.
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The respondent requested that the moulds be
given back for rectification, but the appellant
refused.
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The appellant based his claim on the exceptio
in denying that the plaintiff had “duly
performed its obligations”.
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Jansen JA mentioned a few “aspects” of the
principle of reciprocity and its application by
means of the exceptio.
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Continued in next lecture…