- D Bhana ‘The Horizontal Application of the Bill of Rights: A Reconciliation of Sections 8 and 39 of the Constitution’ (2013) 29 SAJHR 351, 351–53.
- D Bhana ‘The Substance of Contractual Autonomy in the Twenty-first Century: The South African Experience’ (2015) 48 Verfassung und Recht in Ubersee: Law and Politics in Africa, Asia, Latin America forthcoming.
- See for instance, D Bhana & M Pieterse ‘Towards a Reconciliation of Contract Law and Constitutional Values: Brisley and Afrox Revisited’ (2005) 122 SALJ 865, 887–89; L Hawthorne ‘The Principle of Equality in the Law of Contract’ (1995) 58 THRHR 157, 171–76. See further, J Lewis ‘Fairness in South African Contract Law’ (2003) 120 SALJ 330; G Lubbe ‘Taking Fundamental Rights Seriously: The Bill of Rights and its Implications for the Development of Contract Law’ (2004) 121 SALJ 395; C-J Pretorius ‘Individualism, Collectivism and the Limits of Good Faith’ (2003) 66 THRHR 638.
- S Woolman & DM Davis ‘The Last Laugh: Du Plessis v De Klerk, Classical Liberalism, Creole Liberalism and the Application of Fundamental Rights under the Interim and Final Constitutions’ (1996) 12 SAJHR 361,382–90.
- Bhana & Pieterse (note 3 above) 866–69; see further discussion of classical liberalism in part IV(a) below.
- See generally, SA Smith ‘In Defence of Substantive Fairness’ (1996) 112 LQR 138; A Cockrell ‘Substance and Form in the South African Law of Contract’ (1992) 109 SALJ 40, especially 41–46.
- Bhana & Pieterse (note 3 above) 868 and the authorities cited there; see further discussion of the reliance and ‘harm to interests’ theories in part IV(c) below.
- See discussion in parts III & IV below.
- For a detailed discussion of these doctrines, see SWJ (Schalk) van der Merwe, LF van Huyssteen, MFB Reinecke & GF Lubbe Contract General Principles 4 ed (2012) chapters 2 & 4. See also part IV below.
- Admittedly, the categorisation of these requirements as issues of procedural fairness is not unequivocal. Nevertheless, insofar as they remain pre-requisites for the valid exercise of autonomy, their categorisation as such does not impact materially on my analysis.
- Cockrell (note 6 above) 52–63 where he discusses the infusion of collectivism into contract law; Hawthorne (note 3 above) 169–75; SA Smith Contract Theory (2007) 89; Brisley v Drotsky 2002 (4) SA 1 (SCA) (judgment of Cameron JA) paras 88–95, the first Supreme Court of Appeal (SCA) case to deal with the impact of the Constitution on our common law of contract. Briefly stated, the court interpreted the foundational constitutional values of freedom, dignity and equality in an essentially classical liberal manner. This, in turn, led the court in casu to reconfirm the so-called Shifren principle, namely that a non-variation clause is in line with public policy and therefore, legal, valid and enforceable in our law; Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA) paras 14–24, which not only confirmed Brisley's purported constitutionalisation of our classical common law of contract as per the values of freedom, dignity and equality, but went further to submit that freedom of contract itself is a constitutional value — this case upheld the legality of an exclusion clause that purported to exclude liability for the negligence of a nurse in the post-operative care of Strydom; Napier v Barkhuizen 2006 (4) SA 1 (SCA) paras 6–14; Ngcobo J's majority judgment in Barkhuizen v Napier 2007 (7) BCLR 691 (CC) especially para 30, which dealt with the legality of a 90-day time-bar clause — see discussion in notes 27 & 39 below; Bredenkamp v Standard Bank of South Africa Ltd 2010 (4) SA 468 SCA paras 50–51 (see note 36 below); compare Johannesburg Country Club v Stott 2004 (5) SA 511 (SCA) para 12, where the SCA intimated that the right to life could well trump freedom of contract — this case dealt with the interpretation of an exclusion clause in terms of which the Country Club purported to exclude liability for the death of one of its members who was struck by lightning whilst under a shelter on the club's golf course. In casu, the SCA found that the exclusion clause in question did not cover such death. See also part III below.
- Brisley (note 11 above) paras 94–95; Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) paras 9B–9C.
- In the sense that parties are free to determine whether, with whom and on what terms to contract, without interference from the state.
- In the sense that all contracts are entered into in good faith between parties on a formally equal footing. This emanates from the Roman-Dutch law underpinnings of South African contract law. See Bhana & Pieterse (note 3 above) 867–68.
- On the traditional hegemony of contract law, see generally, A Cockrell ‘The Hegemony of Contract’ (1998) 115 SALJ 286.
- D Bhana ‘The Role of Judicial Method in the Relinquishing of Constitutional Rights through Contract’ (2008) 24 SAJHR 300, 305–06.
- This section draws heavily from the discussion by my colleague and me in Bhana & Pieterse (note 3 above) 866–69, 889–93. I include it here for the sake of completeness of my discussion of the external reach dimension of contractual autonomy.
- Bhana & Pieterse (note 3 above) 867. Interestingly, in English law too, the more progressive (and essentially European) concept of good faith has recently found application. See Yam Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB); and Compass Group UK and Ireland Ltd (t/a Medirest) v Mid Essex Hospital Services NHS Trust [2012] EWHC 781 (QB); compare Compass Group UK and Ireland Ltd (t/a Medirest) v Mid Essex Hospital Services NHS Trust [2013] EWCA Civ 200 where the Court of Appeal (Civil Division) reverted to a more conservative position.
- Bank of Lisbon of South Africa Ltd v De Ornelas 1988 (3) SA 580 (A). Briefly stated, the exceptio doli was an equitable Roman law defence against the substantive unfairness of a contract. Bank of Lisbon effectively jettisoned this defence from South African law on the basis that it never really formed part of our law in the first place.
- As grounded in the notion of ‘simple justice between man and man’ — Sasfin (note 12 above) 9G.
- Sasfin (ibid) 9B—9C. In this case, Dr Beukes had ceded all of his book debts to Sasfin as security for a loan that he had received from Sasfin. However, the effect of the cession was to deprive Beukes of all of his income. Moreover, the cession was in no way connected to the amount owed by Beukes to Sasfin. As a result, Sasfin would continue to be entitled to Beukes’ book debts even after he paid off the loan. The court thus found the contract to be unconscionable and against public policy. See also Baart v Malan 1990 (2) SA 862 (E), where a substantively equitable result was likewise achieved by employing the device of public policy, as it features in the doctrine of legality. In this case, the court considered unconscionable, a divorce settlement agreement in terms of which the husband got custody of the children (aged 9 & 15 at the time) and the wife agreed to pay her gross salary as maintenance for them for the next 20 years.
- 1997 (4) SA 302 (SCA) (Saayman), which involved a contract of suretyship between a bank and Mrs Saayman. In terms of the contract, Mrs Saayman ceded certain shares to the bank as surety for the debts of Mrs Saayman's son. However, at the time of signing, Mrs Saayman was not aware that she was signing a suretyship — at the time, she was 85 years old, hard of hearing and almost blind. Whilst the majority judgment dealt with the issue as one of contractual capacity, the minority invoked the value of good faith through the doctrine of legality and found that the bank had acted in bad faith when it failed to explain the effect of signing the suretyship to Mrs Saayman. Accordingly, it would be against public policy for the bank to now enforce the contract against Mrs Saayman; Bhana & Pieterse (note 3 above) 890. See also D Bhana ‘The Role of Judicial Method in Contract Law Revisited’ (2015) 132 SALJ 122, 136.
- D Hutchison ‘Non-variation Clauses in Contract: Any Escape from the Shifren Straitjacket?’ (2001) 118 SALJ 720, 742. See also the minority judgment of Olivier J in Brisley (note 11 above) paras 63–78; compare the majority judgment paras 11–22. See for instance, NBS Boland Bank Ltd v One Berg River Drive CC; Deeb v ABS A Bank Ltd; Friedman v Standard Bank of SA Ltd 1999 (4) SA 928 (SCA) paras 25–26; Mort NO v Henry Shields-Chiat 2001 (1) SA 464 (C) 474B-476I; Miller NNO v Dannecker 2001 (1) SA 928 (C) para 19; Silent Pond Investments CC v Woolworths (Pty) Ltd 2011 (6) SA 343 (D) paras 44–52 & 66–67; Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) paras 22–24 & 30–34; compare South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) paras 27–32.
- Brisley (note 11 above) paras 11–34; Afrox (note 11 above) para 32; Bredenkamp (note 11 above) para 50; Maphango v Aengus Lifestyle Properties (Pty) Ltd 2011 (5) SA 19 (SCA) paras 23–25; compare Silent Pond Investments (note 24 above) paras 51–52, where the court held that a duty of good faith will be enforceable if contracting parties expressly agree to it — for a similar position in English law see Compass Group UK and Ireland Ltd (t/a Medirest) (QB) (note 18 above); however this case was subsequently overturned by the Court of Appeal in Compass Group UK and Ireland Ltd (t/a Medirest) (EWCA Civ) (note 18 above).
- Unless otherwise indicated, I use the terms fairness, reasonableness, justice, equity, and good faith loosely and interchangeably. No significance should be attached to the use of one term or another.
- Barkhuizen (note 11 above) paras 48, 70, 73 & 79–82. Briefly stated, Barkhuizen (note 11 above) dealt with the legality of a time-bar clause in a standard short-term insurance contract in respect of Mr Barkhuizen's motor vehicle. In terms of the clause, Barkhuizen had 90 days to institute action against the insurer from the date on which the latter denied his insurance claim. Barkhuizen had failed to sue within the 90 days and hence the issue of the legality of the time-bar clause. See also Everfresh Market Virginia (note 24 above) (minority judgment of Yacoob J) paras 22–24. The minority judgment focused on the enforceability of an agreement to agree on the basis of good faith.
- As per Chapter 2 of the Constitution, 1996. See also FDJ Brand ‘The Role of Good Faith, Equity and Fairness in the South African Law of Contract: The Influence of the Common Law and the Constitution’ (2009) 126 SALJ 71, 84–89.
- As based on the reasonable reliance on the appearance of consensus; see discussion in part IV(c) below.
- C-J Pretorius ‘The Basis of Contractual Liability (3): Theories of Contract (Consideration, Reliance and Fairness)’ (2005) 68 THRHR 575, 583–84, where he submits that ‘perhaps reliance might best be viewed as a manifestation of good faith, or rather principles of reasonableness and fairness …’. See also C-J Pretorius ‘The Basis of Contractual Liability (4): Towards a Composite Theory of Contract’ (2006) 69 THRHR 97, 99–100; and the two-staged public policy (reasonableness) test formulated in Barkhuizen (note 11 above) paras 30 & 56–58.
- See for instance, Price Waterhouse Coopers Inc v National Potato Co-operative Ltd 2004 (6) SA 66 (SCA); 2005 (8) BCLR 786 (CC) paras 23–46 & 50–52, where the SCA reconsidered the validity of champertous agreements in light of public policy as informed by the rights and values of the Constitution.
- In brief, the ‘will theory’ ascribes contractual liability on the basis of the subjective ‘special choice’ that the contracting parties make when they consent voluntarily to a particular arrangement of affairs with the requisite animus contrahendi, ie the serious intention to contract.
- See authorities cited in note 11 above.
- Afrox (note 11 above) para 123.
- D Bhana ‘The Law of Contract and the Constitution: Napier v Barkhuizen (SCA)’ (2007) 124 SALJ 269, 273–75.
- Bredenkamp (note 11 above) paras 47–52 especially 50 & 27–8. In brief, Bredenkamp dealt with the legality of a standard termination clause in a long-term/continuing contract between a bank and a customer. In terms of this clause, either party was entitled to cancel the contract on written notice. The SCA maintained that such clause is valid and enforceable; the reasons for termination being irrelevant. This position was reconfirmed in Maphango (note 25 above) paras 23–25, which dealt with a similar termination-type clause in the context of a lease agreement.
- Bredenkamp (note 11 above) para 30.
- Bredenkamp (ibid) paras 36–40; and authorities cited in note 11 above. See also Bhana & Pieterse (note 3 above) 876–83.
- Barkhuizen (note 11 above) paras 56–59 - so in casu, the 90-day time-bar clause needed to be objectively reasonable as per the broader concerns of public policy (as informed by the rights and values of the Constitution, including, most notably in casu, the right of access to courts). In addition, it must be subjectively reasonable to enforce the clause in the particular circumstances of the parties, ie the court must consider the effect of enforcement on the particular parties — arguably, the relevant factors would be delineated at the objective level of the public policy scale and translated at the subjective level to determine their actual effect on the parties before the court. In casu, the court held that the clause was both objectively valid and subjectively enforceable in the circumstances. See also D Bhana ‘Contract Law and the Constitution: An Evaluation of Bredenkamp v Standard Bank of South Africa (Pty) Ltd (SCA)’ (2014) 29 SAPL 508; D Bhana & A Meerkotter ‘The Impact of the Constitution on the Common Law of Contract: Botha v Rich NO (CC)’ (2015) 132 SALJ 494.
- Barkhuizen (note 11 above) paras 30, 57, 70 & 87–88.
- 2014 (4) SA 124 (CC) (Botha), where the CC was concerned inter alia with the application of the exceptio non adimpleti contractus defence (albeit upon the wrong principle) as well as the legality and enforceability of a lex commissoria, ie a clause conferring the right to cancel for breach of contract, in relation to an instalment sale of land agreement.
- Botha (ibid) paras 49 & 51. See further Bhana & Meerkotter (note 39 above) 505–08.
- Bhana & Meerkotter (ibid) 505–08; compare Cool Ideas 1186 CC v Hubbard 2014 (4) SA 474 (CC) para 52, compare paras 126, 143, 150 & 167.
- Bhana (note 35 above) 273–75.
- Pretorius (note 3 above) 640; C-J Pretorius ‘The Basis of Contractual Liability (1): Ideologies and Approaches’ (2005) 68 THRHR 253, 259–60; G Lubbe & C Murray Farlam and Hathaway Contract: Cases, Materials, Commentary 3 ed (1988) 20–21 & 25–26; L Hawthorne ‘Distribution of Wealth, the Dependency Theory and the Law of Contract’ (2006) 69 THRHR 48, 49–52; PS Atiyah ‘Essay 6: The Liberal Theory of Contract’ Essays on Contract (1988) 121.
- As opposed to its function as the underlying rational for contractual liability or autonomy's externally delineated limits, as highlighted in part III above. See M Pieterse ‘The Interdependence of Rights to Health and Autonomy in South Africa’ (2008) 125 SALJ 553, 553, where he submits ‘… the dominance of “classical” conceptions of liberty in many legal systems tends to preclude meaningful engagement with the substantive and material dimensions of human autonomy [itself]’. Compare the quotation of HR Hahlo in Barkhuizen (note 11 above) para 169, which epitomises classical liberal thinking on the internal content dimension of autonomy.
- On standard form contracts generally, see TD Rakoff ‘Contracts of Adhesion: An Essay in Reconstruction’ (1983) 96 Harvard LR 1173; see also A Robertson ‘The Limits of Voluntariness in Contract’ (2005) 29 Melbourne Univ LR 179, 187–96; Sachs J in Barkhuizen (note 11 above) para 139; DL Pearmain ‘Contracting for Socio-economic Rights: A Contradiction in Terms? (2)’ (2006) 69 THRHR 466, 475; PJ Sutherland ‘Ensuring Contractual Fairness in Consumer Contracts after Barkhuizen v Napier 2007 5 SA 323 (CC) - Part 2’ (2009) 20 Stellenbosch LR 50, 62–3.
- See D Bhana Constitutionalising Contract Law: Ideology, Judicial Method and Contractual Autonomy (2013) unpublished PhD thesis, University of the Witwatersrand, <http://wiredspace.wits.ac.za/handle/10539/12816> 49–57, regarding the underpinning ‘philosophy’ of self- determination, self-reliance and self-interest. See also L Hawthorne ‘Contract Law's Choice Architecture: The Hidden Role of Default Rules’ (2009) 73 THRHR 599, 599; Lubbe & Murray (note 45 above) 21; L Hawthorne (note 45 above) 53–55.
- Atiyah (note 45 above) ‘Essay 12: Freedom of Contract and the New Right’ 355 & 358; L Hawthorne ‘Materialisation and Differentiation of Contract Law’ (2008) 71 THRHR 438, 441; compare Hawthorne (note 3 above) 162–63.
- Ibid.
- Smith (note 11 above) 107, 139–40. On the flawed nature of the premise of rationality, see Hawthorne (note 48 above) 599–601 & 618–19. Hawthorne submits ‘… rationality [is] under suspicion … individuals do not necessarily make the best choices for themselves. Moreover, the enormous disparity of resources in domestic and global markets, economic necessity and ignorance force patients, consumers of milk and bread, the insured and everyone else into decisions based on misleading or no information or driven by necessity; this situation has led to a worldwide recognition of the modern state's protective role …’ 600. See also Smith (note 6 above) 175, 179–80 & 185–86, where he recognises that individuals can make non-valuable choices and furthermore, that self-interest is not always a sufficient safeguard; compare Smith (note 11 above) 126–27.
- Smith (note 6 above) 177; Smith (ibid) 139–40.
- J Beatson & D Friedman ‘From Classical to Modern Contract Law’ in J Beatson & D Friedman (eds) Good Faith and Fault in Contract Law (1995) 7–8.
- Bhana (note 48 above) 49–67.
- See discussion in part III above on the limited role of competing policy concerns. In addition, in the context of a delict, ‘no positive act is required for these rights to come into existence’ Smith (note 11 above) 73.
- Robertson (note 47 above) 182–86; Smith (note 11 above) 73, 77, 139–40 & 157.
- I use the terms cognitive and conative strictly to denote a legal understanding of the respective abilities, as set out in the text. I do not purport to venture into the scientific/medical meanings of capacity. For an exposition of capacity from a psychological perspective, see DA Louw & DJA Edwards Psychology: An Introduction for Students in Southern Africa (1993).
- See the majority judgment in Saayman (note 22 above) where the court effectively forced the facts of the case into the category of mental illness to find that Mrs Saayman had no contractual capacity. This, notwithstanding the fact that being old, hard of hearing and almost blind are not tantamount to having a mental illness as defined in our law. Arguably, this scenario highlights the deficiency of our rules articulating contractual capacity in the constitutional era. See Bhana (note 22 above) 136–37; compare s 39 of the Consumer Protection Act 68 of 2008, which appears to shift emphasis away from the ability of the consumer, to the risk of the supplier not knowing the consumer's lack of full legal capacity. See D Bhana & CJ Visser ‘The Capacity of a Minor to Enter into a Consumer Contract: The Consumer Protection Act and the Common Law’ (2014) 77 THRHR 177.
- Children's Act 38 of 2005 s 17.
- See Van der Merwe et al (note 9 above) 99; Pretorius (note 3 above) 640; H Collins ‘Contract and Legal Theory’ in W Twining (ed) Legal Theory and Common Law (1986) 142; compare Robertson (note 47 above) 182–86; MJ Trebilcock ‘External Critiques of Laissez-faire Contract Values’ in FH Buckley (ed) The Fall and Rise of Freedom of Contract (1999) 78, 91.
- See J Heaton The South African Law of Persons 3 ed (2008) 38–39; JC Knobel (ed and trans), J Neethling & JM Potgieter Neethling-Potgieter-Visser Law of Delict 6 ed (2010) 125; Rakoff (note 47 above) 1186, where he submits ‘… contract law is grounded on the voluntary assumption of obligation, or on what may reasonably be interpreted as such …’.
- This includes the voluntary creating of an impression of making a choice. Rakoff (ibid) 1180–83, where the ‘Dimensions of Choice’ in relation to the terms of a contract are discussed. See also C Albertyn ‘Substantive Equality and Transformation in South Africa’ (2007) 23 SAJHR 253, 267, for a discussion of the choices of women in terms of marriage.
- Hawthorne (note 3 above) 166; Collins (note 60 above) 147–48; Pieterse (note 46 above) 565–67. ‘Context’ here would refer to the broader socio-economic context as well as the more personal context of the contracting parties.
- In economic terms, the internal and external parameters of contractual autonomy are meant to accommodate failures of the market and thereby to curb inefficient transactions. Most notable, are those internal failures relating to imperfect competition in the marketplace by reason of inequalities in information and/or bargaining power which, in turn, lead potentially to a deficient exercise of autonomy itself. In this respect, see discussion of improperly obtained consensus in part IV(d) below. South African contract law, as it currently stands, needs to grapple with realities of unequal bargaining power, as well as the legal delineation of the concept of economic duress. In this respect, even neo-classicists clamour for necessary alignment. See further Hawthorne (note 49 above) 451; Trebilcock (note 60 above) 82–86; Medscheme Holdings (Pty) Ltd v Bhamjee 2005 (5) SA 339 (SCA) para 18. See also discussion of autonomy and the doctrine of mistake in part IV(c) below; Smith (note 6 above) 173; Robertson (note 47 above) 180–81. Market failures may also be caused by the externalities of market transactions — these translate generally into the (potential) harm of market transactions to third parties and/or the community as a whole. In the extant contract law, such externalities are accommodated, presumably, by the doctrine of legality. MJ Trebilcock The Limits of Freedom of Contract (1993) 17; Trebilcock (note 60 above) 88–90. Of particular concern, are the policy implications of the purported situating within the marketplace of certain social facets of what comprises a valuable life and their resulting commodification. Smith (note 6 above) 174, refers to the marker of ‘efficiency’ as ‘a morally unattractive foundation’. See further, Smith (note 11 above) 260–3; Trebilcock (note 60 above) 88–90; compare Collins (note 60 above) 147–51, who advocates for a social market theory; Hawthorne (note 49 above) 443–44 & 445–53, on the movement from ‘solitary’ to ‘solidarity’ in the sphere of contract. See also H Collins The Law of Contract 4 ed (2003) chapter 5.
- Such interests are said to include future (long-term) interests. This presumes that individuals are able to presentiate future intentions and risks. But such at least requires more-or-less perfect market conditions, where participants have access to all relevant information, and therefore, can compete fairly equally with one another. Smith (note 6 above) 173.
- Bhana (note 48 above) 53–67.
- Such would at least include those needs like housing, water, education, etc, as embodied by the socio-economic rights founded in our Bill of Rights.
- See for instance the case of Bhikhagee v Southern Aviation (Pty) Ltd 1949 (4) SA 105 (E), where the contractant's inability to read English was not considered an acceptable excuse.
- Hawthorne (note 45 above) 61–62 states “The “centre” contracting party is a disembodied, unsituated entity who has the power to strike bargains concerning his or her basic needs. In the developing world the resources of the centre are education, economic and political power and the concomitant riches. However, the median person in the developing world, the peripheral contracting party, is rarely skilled, knowledgeable, well-educated or wealthy. Nevertheless, in terms of the classical theory all contracting parties are treated like the average person without needs, and thus all parties are treated as equal. The invisible hand of the market is deemed to be neutral and thus to treat everyone equally … The developing periphery of the poor is thus denied equity-based defences … These inequalities which typify the developing world can be signified in the term ‘internal colonialism’, which connotes the economic subordination of the indigent underclass in a system originating in or affiliated to the developed world.’ See also Hawthorne (note 3 above) 170; Hawthorne (note 48 above) 618–19; Atiyah (note 45 above) ‘Essay 7: Executory Contracts, Expectation Damages, and the Economic Analysis of Contract’ 150 & 155; Smith (note 6 above) 177, where he refers to such as the horizontal dimension of autonomy.
- Smith (note 6 above) 177; Smith (note 11 above) 258–60; Atiyah (note 45 above) 126.
- Bhana (note 35 above) 273–78.
- In the South African law of contract, there is no overarching category of improperly obtained consensus, see Extel Industrial (Pty) Ltd v Crown Mills (Pty) Ltd 1999 (2) SA 719 (SCA). So, a court must fit the case before it into one of the established categories or if appropriate, develop a new category.
- For a detailed discussion of the relevant categories, see Van der Merwe et al (note 9 above) chapter 4.
- Bhana (note 48 above) 58–61.
- Note that one or both parties can be mistaken. Further, if both parties are mistaken, the parties can make the same mistake or different mistakes. For purposes of this discussion, I focus on unilateral mistakes. For a detailed discussion of the basic rules of mistake, see Van der Merwe et al (note 9 above) chapter 2, 22–45.
- That is, a causal mistake that leads to dissensus between the parties as to the terms, parties and/or animus contrahendi in relation to the contract. See also, the discussion of reliance theory in Bhana (note 48 above) 61–63.
- Ibid.
- See for instance Saambou-Nasionale Bouvereeniging v Friedman 1979 (3) SA 978 (A); George v Fairmead (Ply) Ltd 1958 (2) SA 465 (A); National and Overseas Distributors v Potato Board 1958 (2) SA 473 (A); Steyn v LSA Motors Ltd 1994 (1) SA 49 (A); Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pty) Ltd) v Pappadogianis 1992 (3) SA 234 (A); Slip Knot Investments) 777 (Pty) Ltd v Du Toit 2011 (4) SA 72 (SCA). In each of these cases, the focus was on the doctrine of quasi mutual assent, ie the reasonable reliance of the non-mistaken party.
- See for instance, Diedericks v Minister of Lands 1964 (1) SA 49 (N); Allen v Sixteen Stirling Investments (Pty) Ltd 1974 (4) SA 164 (D); Mercurius Motors v Lopez 2008 (3) SA 572 (SCA); compare Brink v Humphries & Jewell (Pty) Ltd 2005 (2) SA 419 (SCA). In each of these cases, the focus was on justus error.
- D Hutchison & B van Heerden ‘Mistake in Contract: A Comedy of (Justus) Errors’ (1987) 104 SALJ) 523, 524–27.
- This category of mistake is dealt with separately in the next sub-section.
- Hutchison & Van Heerden (note 80 above) 524–29.
- Sonap (note 78 above); Slip Knot (note 78 above).
- See Bhana & Pieterse (note 3 above) 868 and the authorities cited at fn 18; Beatson & Friedman (note 53 above) 3–21; Collins (note 64 above) chapters 1 & 2; Trebilcock (note 64 above) chapter 1; Collins (note 60 above); Cockrell (note 6 above) 48; Smith (note 11 above) 256 ff.
- That is, the individualist underpinnings of self-interest, self-reliance and self-determination.
- As per the classical model. See Bhana (note 48 above) 49–53.
- Sonap (note 78 above); Slip Knot (note 78 above).
- See for instance, Nasionale Behuisingskommissie v Greyling 1986 (4) SA 917 (T); Lake NNO v Caithness 1997 (1) SA 667 (E). See also Hutchison & Van Heerden (note 80 above), where the authors contrast the approach taken in Greyling with that taken in Horty Investments (Pty) Ltd v Interior Acoustics (Pty) Ltd 1984 (3) SA 537 (W).
- Brink (note 79 above) para 8, where the court purported to combine the doctrine of quasi mutual assent and the justus error approach. However, far from resolving the legal quandary, the court created further difficulties. See M Nortje “‘Unexpected terms” and caveat subscriptor’ (2011) 128 SALJ 741, 748.
- Note further, the debate regarding mistake and whether it has its roots in the doctrine of estoppel. Cockrell (note 6 above) 46–50; A Cockrell ‘Reliance and Private Law’ (1993) 4 Stellenbosch LR 41, 47; Hutchison & Van Heerden (note 80 above) 528–30. More generally, see Collins (note 64 above) chapter 5. The issues surrounding estoppel aside, the considerations identified here remain important, given that reliance theory ought to be more rooted in collectivist/distributive justice.
- Note, that the capacity to act with fault is determined in terms of the delictual standard, see Neethling et al (note 61 above) 125–26. The focus shifts to the mistaken party, where fault is used as the basis of ascribing personal responsibility.
- See also the scenario in Lake (note 88 above), where the mistaken party was very ill and therefore vulnerable at the time of contracting.
- The question of what comprises harm, for the purposes of the doctrine of mistake, is unclear - at present, it would seem our law treats the mere entering into the contract as the prejudice/harm. In other words, there is no need for the non-mistaken party actually to act to his or her detriment by relying on the contract before the existence of a mistake is discovered. For example, in reliance on a building contract, a builder enters into employment contracts with labourers.
- For a discussion of the doctrine of mistake and estoppel/reasonable reliance relationship see Cockrell (note 6 above) 46–50.
- See the scenario in Potato Board (note 78 above) where the non-mistaken party acted in reliance on the appearance of a contract and began incurring costs in preparation of making performance to the mistaken party; see also Maritz v Pratley 1894 (11) SC 435 where the mistake was discovered almost immediately after conclusion of the contract and before the non-mistaken party had acted in reliance thereon.
- Elements of reliance theory in the sense of distributive justice feature elsewhere within our common law of contract. Nevertheless, in relation to apparent autonomy the articulation is somewhat vague. See Bhana (note 48 above) 61–67.
- Likewise, there is no express requirement of capacity on the part of the non-mistaken party in terms of his or her ability to rely on the appearance of consensus.
- Most notably, a person's capacity may fall short of the contractual standard but not the delictual standard.
- There is the argument that it is pragmatic to use the declaration theory as a starting point and that a mistaken party can then escape a contract if his or her error is justus. According to MG Martinek ‘Contract Law Theory in the Social Welfare State of Germany — Developments and Dangers’ (2007) TSAR) 1, 18, this will go some way within the law of contract to striking ‘a moderate balance between the formal ethics of liberty and the material ethics of responsibility’.
- Cockrell (note 90 above) 57, argues that the mistaken party's conduct is ‘sufficiently intentional to generate duties even while falling short of a fully-fledged contractual assumption of obligation’. Also quoted in Bhana (note 48 above) 63 fn 75.
- Cockrell (ibid) 57–60. The satisfaction of the reasonable preventable element of fault is likely to be inevitable in the sense that the contract denier could have avoided the situation, quite simply, by not creating the impression in the first place.
- Procedural fairness being the fairness of the process through which consensus is secured. See part II above.
- I use the term ‘guilty’ loosely to denote the party who makes the misrepresentation etc and the term ‘innocent’ loosely to denote the party who is subject to such misrepresentation etc.
- Note that whilst I am mindful that misrepresentation, duress, undue influence, and bribery are discrete categories, and furthermore, that there is no overarching principle of ‘improperly obtained consensus’, my analysis of these categories’ relationship with contractual autonomy focuses on their commonalities (so-called ‘linking devices’). As such, they do not need to be distinguished to the extent of their detailed requirements, except, where otherwise indicated.
- Smith (note 6 above) 173 & 185.
- If an element for formation of a valid contract is absent, the contract is null and void. See generally, Van der Merwe et al (note 9 above) chapters 2 to 8.
- The restitutio in integrum is the common law remedy that allows the innocent party to set aside the contract. For the requirements of the restitutio, see Van der Merwe et al (ibid) 116–18.
- Van der Merwe et al (note 9 above) 116–18. The innocent party would, however, still be able to claim delictual damages for the relevant wrong.
- Novick v Comair Holdings Ltd 1979 (2) SA 116 (W); Feinstein v Niggli 1981 (2) SA 684 (A).
- In the case of duress, the applicable rules go further to recognise that the wrongful conduct (duress) of a third party also entitles the innocent party to invoke the contractual remedy of restitutio in integrum. See generally, Van der Merwe et al (note 9 above) 99–105 & 116–18.
- Collins (note 60 above) 142.
- Cockrell (note 6 above) 56–58.
- See Bhana (note 2 above).
- In other words, those factors that obstruct the making of materially autonomous choices, ie rational, informed, valuable, and ultimately fair choices. See Hawthorne (note 49 above) 618–19; Hawthorne (note 3 above) 169–70; Hawthorne (note 45 above) 57; Smith (note 6 above) 175, 179–80 & 186; Martinek (note 99 above) 7.
- See Smith (note 6 above) 175, on the importance of systemic external factors and their counterpart, which he terms ‘background conditions necessary for the achievement of autonomy’. See also Martinek (note 99 above) 4–5 & 7; Hawthorne (note 45 above) 61–62; Atiyah (note 45 above) ‘Essay 7: Executory Contracts, Expectation Damages, and the Economic Analysis of Contract’ 155; Trebilcock (note 60 above) 82–88 & 91–93; Pieterse (note 46 above) 563–67 & 570–72.
- Smith (note 6 above) 178–80 & 185–86, future autonomy should not be limited unnecessarily or disproportionately in the pursuit of non-valuable goals (as defined by the state), where the contractants’ ‘self-interest’ does not comprise an adequate safeguard.
- Atiyah (note 45 above) 142.
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