Theme 3: 4Breach of Contract
Party fails to honour his contractual obligations in the form of:MoradebitorisMoracreditorisPositivemalperformanceRepudiationPrevention of performance
Forms of Breach of Contract
Debtor does not performtimeouslyin terms of the contract.Requirements:Performance must still be possibleIf performance is impossible due to late performance it would not be breach in terms ofmoradebitoris, but prevention of performance.Debtor fails to performtimeouslyIf date and time of performance is stipulated, debtor is automaticallyinmoraif he does not perform on time.inmoraex re: no request for performance by creditor requiredIf date and time of performance is not stipulated, the creditor must request performance, by delivering a notice of demand, to place the debtorinmora.inmorapersona: Time set must be reasonable. If the debtor fails to perform he is setinmora.Performance already due and enforceableIf performance is impossible due to late performance it would not be breach in terms ofmoradebitoris, but prevention of performance.Delay due to the debtor’s faultFailure to perform must be intentional or negligent. Not performing due to circumstances beyond his control will not be breach of contract.
Moradebitoris(delay by debtor)
Consequences ofmoradebitoris: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 isinmoraand 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 possibleIf performance is impossible due failure to co-operate it would not be breach in terms ofmoracreditoris, but prevention of performance.Impossibility without fault is not breach of contract.Creditor delays performanceOnly possible where co-operation of the creditor is required.Performance due and enforceableNo obligation exists to accept performance prior to arranged date and time.Performance can be rejected if it is subject to asuspensivecondition.Proper performance offered by debtorRefusal to accept performance substantially defective does not constitutemoracreditoris.Delay due to creditor’s faultDefective performance my be rejected. Intentional or negligent failure to accept performance will result in breach of contract.
Moracreditoris(delay by creditor)
Consequences ofmoracreditoris:Debtor not excused from performingDebtor still has to perform unless performance becomes impossible without fault of the debtor.MoradebitoriscancelledMoradebitorisandmoracreditoriscannot exist simultaneously.Debtor’s duty to take care of the object diminishedDebtor now only liable for damage caused intentionally or by gross negligence.Obligation perpetuatedThe creditor bears the risk that the performance could become impossible while he isinmoraand will not be excused for that.
Refers to the contents or the quality of the performance.Requirements:Positive dutyIf defective performance is delivered the debtor is guilty of positivemalperformance.Negative dutyPerson must refrain from doing something,dutdoes it anyway.FaultFault is not required. Liability can be avoidedeg. Act of GodConsequences of positivemalperformanceCreditor can rely on contractual remedies:CancellationSpecific performanceDamages
PositiveMalperformance
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 actWords or conduct / Expressly or tacitlyNotice of cancellation /malperformance/ no performance / etc.Intention to repudiateObjective test is applied: Would the reasonable man have come to the conclusion that the contract is repudiated?Consequences of repudiationAcceptance 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.
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 enforceableRequirements:Fault
Prevention of performance
Consequences of prevention of performanceDebtor prevents performance, creditor may...Cancel contract, reclaim performance and claim damagesUphold contract, claim performance and damages.Creditor renders performance impossible, debtor may...Cancel contract, return performance and claim damagesUphold contract, claim counter-performance and damages.
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