CONTRACT B NOTES

Breach
Note: four types of breach
Positive malperfomance/ordinary breach (debtor performs but in a defective or incomplete
manner)
Repudiation and anticipatory breach (either party indicates an unequivocal intention not to
honour the agreement)
Mora or negative malperfomance (mora debitoris -debtor culpably fails to make timeous
performance of his or her obligations and mora creditoris -the creditor culpably fails to
cooperate timeously with the debtor so that the later may perform his or her obligations)
Ordinary breach or positive malperfomance
Kerr 601
If without lawful excuse a party fails to do what he has contracted to do, or does what he has
contracted not to do, an ordinary breach of a contract is said to have occurred.
It relates to the content of the performance made. It may take either two forms, depending on whether
the duty in question is positive or negative
Where the duty to do something, positive malperfomance occurs when the debtor duly
performs but in an incomplete or defective manner.
In the case of obligatio non faciendi, positive malperfomance occurs when the debtor does the
act that he or she is bound to refrain from doing
Requirements
The debtor must have performed
The performance rendered must be defective or improper or not to the standard required (see
Holmdene brickworks v Roberts (facts).
Holmdene facts
(a) During June and July 1971 it purchased from appellant some 212 000 bricks, most of
which were of the variety known as "fair face" and the remainder being what are known as
"stock" bricks, for use in the erection of certain factory buildings at Standerton for Nestl
(S.A.) Ltd. ("Nestl");
(b)these bricks were delivered to respondent at the construction site in a number of loads
over the period 1 July to 30 November 1971 and were in fact used in the erection of the
factory buildings;
(c) that in January 1972, after the completion of all the brickwork, it was found that a
substantial proportion of the bricks so used were defective in that they manifested a condition
known as "efflorescence" and were beginning to crumble and decompose;
(d) That in order to remedy the position respondent demolished the walls containing the
defective bricks and rebuilt them with other bricks obtained from a different source (the cost
of such demolition and reinstatement being assessed by the trial Court at
R27086, 24); and
(e) That appellant, as the manufacturer and seller of bricks containing a latent defect, was
bound to compensate respondent for the consequential loss suffered in the aforementioned
sum of R27 086, 24.
Fault is irrelevant or assumed
Loureiro (negative breach) did what he was refrained from doing
Mr Loureiro entered into an oral agreement with iMvula Quality Protection (Pty) Ltd
(IMvula) for a 24-hour armed security guard service at his home. He instructed iMvula not to allow
anyone onto the premises without his prior authorisation.
In January 2009, robbers masquerading as police officers approached the home and demanded entry.
When iMvulas security guard on duty was not able to communicate over the intercom with the men
seeking entry, he opened the pedestrian gate without first checking their identity or business. The
robbers then accosted the Loureiros and their household staff, and stole items worth millions of
Rands.The Loureiro family was successful in the High Court, which held iMvula contractually and
delictually liable. On appeal, a majority of the Supreme Court of Appeal overturned the High Courts
decision, while a minority would have upheld it.
In a unanimous judgment, written by Van der Westhuizen J, the Constitutional Court granted leave to
appeal and found in favour of the Loureiro family. The Court held that iMvula is liable for breach of
contract. By allowing access to the imposters, a strict term of the contract was contravened. The Court
also found iMvula vicariously liable in delict. The Court held that, in its conclusion on wrongfulness,
the majority in the Supreme Court of Appeal failed to have regard to weighty normative and
constitutional considerations. Wrongfulness was established because iMvulas employee opened the
gate for the robbers. There is a great public interest in ensuring that private security companies and
their guards, in taking on the remunerated role of crime prevention, succeed in thwarting avoidable
harm. iMvulas employee furthermore acted negligently by failing to foresee the possibility that an
unauthorised person might try to gain access by purporting to be someone he is not; and by failing to
take the fairly simple precautions a reasonable person in his position would have taken to guard
against the harm. The amount of the claim (quantum) is to be determined by the High Court in
separate proceedings.
Ordinary breach is about strict liability
Prevention of performance
Where performance to a contract becomes impossible due to the fault of one of the
contracting parties. Rare and often categorised under one of the other forms of breach.
It is not necessary that the performance should be objectively impossible in order for the
breach to arise; subjective intention must suffice. In other words, the breach is committed
even when the impossibility attaches only to a particular debtor.
In theory there is a difference between prevention of performance and repudiation, namely the
former can be created negligently, whereas repudiation requires an unequivocal intention to
repudiate.
Performance may be rendered impossible not only by the debtor but also by the creditor.
Performance may be rendered impossible not only after the date of performance but even long
before such time, in which the innocent party need not wait until the inevitable non-
performance on due date before invoking the appropriate remedies he or she may take action
immediately.
Fault is required as an essential element of breach since in its absence supervening
impossibility will terminate the contract.
The onus rests on the debtor to prove that his or her inability to perform is not due to his or
her fault, the fault must be on the side of the creditor.
Repudiation and anticipatory breach
A party to a contract commits the breach of repudiation when by words or conduct (or both)
and without lawful excuse, he or she manifests an unequivocal intention no longer bound by
the contract or by any obligation forming part of the contract.
There would be refusal to perform at all of which evidence would be indicating that there is a
contract
Also making excuses to try and get away from the contract
Repudiation unlike other forms of breach may occur before the time stipulated for
performance in which it is known as anticipatory breach of the contract.
The anticipatory breach not only in the sense that it predates the time for performance but also
in that it anticipates or predicts the other form of breach. A party who indicates in advance of
the due date that he or she will not make or accept the stipulated performance, or that
performance will be late, defective or incomplete, thereby gives notice that he or she will later
commit mora debitoris, mora creditoris or positive malperfomance, as the case may be.
Anticipatory breach Where the consideration for one persons promise is an executory
promise by the other party, of such a character that it goes to the root of the contract, it is an
implied condition that the first partys obligation should be voidable by him if the second
party before or during, the time of performance, declares his intention of not performing, or
continuing to perform his promise, or disables himself from doing so. It is usually said, in
such circumstances, that the obligation is discharged by an anticipatory breach on the part of
the defaulting party.
Repudiation may also occur on or after the due date for performance, in which case it will
often merely reinforce one of the other forms of breach. A mere delay in making or receiving
performance should not be construed as a repudiation of the contract, at least positive conduct
is needed
Requirements datacolor
Intention not to be bound must be communicated in some way either when the obligation is
owing or prior to the obligation coming into force (anticipatory breach i.e in anticipation of
the time of performance) datacolor Repudiation is accordingly not a matter of intention, it is
a matter of perception. The perception is that of a reasonable person placed in the position of
the aggrieved party. The test is whether such notional reasonable person would conclude that
proper performance [in accordance with the true interpretation of the agreement] will not be
forthcoming.
By words or conduct (or both)
The test is objective (the test being whether the party accused of repudiation has acted in such
a manner as to lead a reasonable person to believe that he or she does not intend to fulfil, or
completely fulfil, his or her part of the contract.
Must be a major breach
Tuckers Land and Development Corporation v Hovis 1980

Respondent had bought two properties from appellant (developer).
Contract of sale was suspensive: subject to the successful demarcation of the township.
Respondent had made certain payments already, but became aware later that the appellant had
run into some difficulty proclaiming the said township.
Because of the above fact, the appellant drew up a new plan for the township.
The two properties purchased by the respondent did not appear on the new plan.
Respondent viewed this omission as an act of repudiation, and cancelled the contract.

Question: Would the appellants action have lead a reasonable person to believe that the
appellant did not intend to honour the contract?
Court decided that the appellant had committed repudiation.

Respondent was allowed to rescind from the contract and claim compensation.

Jansen JA refrained from using the terms offer and acceptance, but said that repudiation
was a choice.
Jansen JAs decision was viewed as a new approach to repudiation.

Repudiation occurs at the place where the innocent party is notified of it and not at the place
where the repudiating party is informed of the acceptance of the repudiation.

Reason: Otherwise it would come down to the principles of offer and acceptance.
Stewart Wrightson (pty) (Ltd) v Thorpe 1977
The respondent had been the director of B Company and a managing director of another of
appellants company. These two companies merged with another company and the respondent
was not happy with it and decided to resign. He submitted a letter of resignation, giving the
required period of six months notice. M, the director of the merging company, instructed the
respondent to leave forthwith subject to a payment of salary and commanded him to absent
himself from work. Thus they were denying the respondent of work and use of his office and
to leave.
Appellant an insurance broking company had sued the respondent for damages alleging that
while in its employ, and in breach of his contract of employment, he had canvassed for and
had obtained an insurance business to the T Company of which he was the director. The
respondents defence was that the appellant had repudiated the agreement of employment and
the respondent had elected to regard the agreement as terminated.
The court decided that it were the respondents who had repudiated the contract by denying the
respondents work and use of his office and to demand him to leave forthwith. They stated
that the appellant, through M, had committed a fundamental breach of the service of contract.
Also stated that the respondents position as director and manager, as also the special
relationship between insurance broker and client and that denial of work and the use of office
did amount to a fundamental breach of contract, as being not only prejudicial to his future
prospects, but also to the degradation of his status. The court also noted that the test for
fundamental breach is objective not subjective
The question the court had to deal it also was whether the respondent effectively elect to
terminate the contract. The court decided that indeed the respondent had elected to terminate
the contract as noted when he claimed a months salary plus certain accrued benefits as of r
Negative malperfomance
Mora
G.A Mulligan MORA 1952 69 SALJ 276
In the law of contract, mora means delay without any lawful excuse, of the performance of a
contractual duty, or a wrongful failure to perform timeously.
Mora debitoris and mora creditoris.
Mora debitoris
Mora debitoris is the unjustifiable failure of a debtor to make a timeous performance of a
positive obligation that is due and enforceable and still capable of performance in spite of
such failure.
Mora consists of an omissio, failure to perform on time, it can occur as a result of positive
obligation (obligatio faciendi)
Distinguished from other forms of breach
Mora consists of an omissio, a failure to perform on time, it can occur only in respect of a
positive obligation (obligation faciendi), and when a debtor who acts in breach of a negative
obligation (obligatio non faciendi) is guilty of positive malperfomance
The debtor is guilty of positive malperfomance, rather than mora, if he or she makes a
performance that is incomplete or defective in some respect
The creditor may reject imperfect performance within a reasonable time, in which case a
failure to comply will place the debtor in mora
If such imperfect performance is made after the debtor has already fallen into mora, the
creditor could elect to treat the breach as either mora or positive malperfomance(ordinary
breach)
If the delay or default renders performance impossible because of the circumstances, the time
stipulated for performance is so inextricably linked to the content of the obligation that late
performance is tantamount to no performance at all-the form of breach involved is prevention
of performance.
Mere delay in performing an obligation should not be construed as a repudiation of the
contract, but where the delay is accompanied by words or conduct evidencing an intention not
to honour the obligation, such as denial of liability or refusal to perform, the creditor may
elect to proceed on the basis of either mora debitoris or repudiation
Requirements
The debt must be due and enforceable and possible to perform
The time of performance must have been fixed, either in contract or subsequent demand for
performance, and the debtor must have failed to perform timeously that is performance must
not have occurred
Such failure to perform on time must be without legal justification
Delay must be at the fault of the debtor
The time of delay depends on whether it is a case of mora ex re or mora ex persona
Debt due and enforceable
When a creditor has a valid right to claim performance forthwith and the claim cannot be
defeated by any valid defence.
In the absence of an agreement to the contrary, the general rule is that the creditor may
demand performance immediately on the conclusion of the contract, or, where this is not
practical or possible as soon thereafter as may be reasonably be expected in the
circumstances.
Failure to perform timeously
timeous performance presupposes certainty as to the time for performance
thus, although a debtor is liable to perform as soon as his or her debt has become due,
failure cannot constitute mora unless or until a definite time has been fixed for
performance and has arrived
there are two forms that delay can be drawn from that is mora ex re and mora in persona
Mora ex rei
delay out of the thing
determined from the contract or from the surrounding circumstances, that the intention of
the parties was that performance should be made on or before a certain date
the contract will tell you when performance was due
3 situations to take note of
Time is expressly fixed on the contract
Eg performance on a certain date or within 10 days
The time stipulated must not only certain to arrive but also certain as to when to arrive
As soon as this time lapses you are in mora
Time is expressly fixed by necessary implication
Eg if you have a ticket for the opening ceremony for the world cup, the ticket needs to be
provided to you before the ceremony starts
Where it can be implied that performance must occur immediately-creditor need make no demand
Eg if you geyser bursts its implied that the plumber must come immediately
Broderick Properties Ltd v Rood 1962 at 453
As a reductio ad absurdum of an inflexible rule that where there is no date specified in
the contract there must be interpellatio before there can be mora I put to counsel the case
of contract by phone for the dispatch of a fire engine to put out a fire in a house, or the
case of an undertaking by a plumber to send a man to repair a broken tap which to the
knowledge of the plumber was flooding the premises. The obvious answer is that the
circumstances impliedly fix the time for performance as a reasonable time, which means
immediately. In other words if the terms of the contract and the circumstances of the case
show that time was of the essence, and no date was fixed then, if performance is offered
when what in the particular case, is a reasonable time has elapsed, the innocent party
may either refuse to accept performance and repudiate the contract, or he may accept
and sue for damages due to the delay. And in my view time is clearly of the essence in the
cases of the motor-car, the fire-engine and the plumber even though no specific time or
date was mentioned.
Also if no time was expressly stipulated in the contract but by necessary implication it
can be shown that performance by some specific time was intended and was essential
Colman J.
Mora ex persona
Where no time for performance has been stipulated, there will be no mora until the
creditor has demanded that occur at a specific time
This may be done even though the debt may be due and enforceable and the delay quite
unreasonable, the creditor must place the debtor under in mora ex persona by demanding
that the debtor perform on or before a definite date or time that is reasonable in the
circumstances
Requires an interpellatio ( a demand for performance at a specific time) made extra
judicially in a letter of demand or can be done verbally (Willowdene Case0
The creditor has to bear the costs of the summons if the debtor duly performs
The creditor need not allow reasonable period to lapse after the conclusion of the contract
before demanding performance, provided the debt is due he or she may demand at any
time after the contract has been entered into
The creditor also is under no duty to demand performance within a reasonable period, he
or she by failing to make a demand within the period of prescription may lose the right
but apart from this there is no principle in our law according to which a right can be lost
through mere delay of enforcing it.
The debtor does not fall into mora immediately upon the receipt of the demand
The creditor when making the demand for performance must stipulate the time or date
that allows the debtor for a reasonable period to perform and it is only after that period
has expired that the debtor falls into mora (test for reasonable time Willowdene)
Onus rests on the debtor to prove that the time given was unreasonable
When timeous performance must be considered of such importance that when the debtor fails to
make timeous performance (i.e. when he falls into mora debitoris) the creditor has the right to cancel
the contract." Broderick
Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1977 at 348
In the light of the authorities referred to above, I have come to the conclusion that, in our law, the
general principle is that, in the case of a contract in which no time for performance has been fixed, the
debtor must be placed in mora by interpellatio before damages can be claimed on the grounds of such
debtor's non-timeous performance. A mere failure to perform or mere non-performance in the absence
of a fixed time for a performance, although it may constitute a ground for a defence of exceptio non
adimpleti contractus, cannot give rise to a claim for damages because it can never be a breach.
Mora creditoris
When the person who is due to receive the performance is unavailable/inaccessible for the
performance to be delivered / delays the performance
The debt must have been capable of being fulfilled
The debtor must have tendered proper performance what constitutes proper tender of
performance depends on the nature and content of obligation in question. The performance
tendered must be full and perfect performance otherwise the creditor may deny it without the
risk of falling into mora
The creditor must have failed to receive the performance
The delay must be the fault of the creditor (the creditor must delay in accepting performance
for example not being present at the stipulated time of performance or refusing debtor
admission when the debtor arrives to perform his or her part of the contract)
It is rare that the creditor can be stumbling block in the performance of a contract
There are times in which the creditors cooperation is required and a culpable failure to
provide such cooperation timeously amounts to mora creditoris
Mora creditoris and mora debitoris cannot coexist but in cases of reciprocal contracts, a party
may be guilty of mora debitoris and mora creditoris simultaneously
As with mora debitoris, mora creditoris the idea of delay presupposes that the time has been
fixed
If such a time has been fixed in the contract mora creditoris arises automatically on default of
the creditor (dies offert pro homine)
Where no time is fixed the debtor must notify the creditor of the time he or she wishes to
perform allowing the creditor reasonable opportunity to prepare to receive the performance
that is if the debtor wishes to discharge the debt before the time stipulated for its performance.