Breach of Contract

A contract is an agreement between Parties whereby one Party will perform a service, or alternatively produce a product, and the other Party shall remunerate the first Party for the service rendered or the product supplied.

When any Party to a contract, whether oral or written, fails to perform any of the contract’s terms and/or conditions thereof, whether it is partially or in full, they may be found in breach of contract.

In other words, a breach of contract is a broken promise to do something or provide something. To explore this concept, consider the following breach of contract definition.

A Breach of Contract can be defined as:

1      An unjustifiable failure to perform terms of a contract; alternatively

2   A violation of contract through failure to perform, or through interference with the performance of the contractual obligations

While there are many ways to breach a contract, common failures include failure to deliver goods or services, failure to fully complete a job, failure to pay on time, or providing inferior goods or services.

The Constitution, the Consumer Protection Act and the Protection of Personal Information Act and Common Law are the laws that govern ‘breach of contract’.

When someone breaches a Contract, it can be summed up to one of the five categories of Breach of Contract namely:

•   Positive mal-performance – this relates to the quality and content of performance. The Party did indeed perform but did not perform as contracted. A person who has promised a quality service but has delivered a terrible service (or at least not up to the standard agreed upon); alternatively a product which is not what was expected;
• Mora creditoris – Where the creditor’s co-operation is essential to enable the debtor to perform his contractual obligation, the creditor is obliged to co-operate. Should this co-operation be necessary, and the creditor fails to oblige, the creditor would have committed breach;
• Mora debitoris – the culpable failure of a debtor to make timeous performance of a positive obligation
•   Repudiation – a Party demonstrates, by words or by conduct, and without lawful excuse, an unequivocal intention to no longer be bound by the contract.
• Prevention of performance – where the fault of one Party renders it impossible for the other Party to perform its obligations.

Various remedies are available to the ‘injured Party’ when the other Party has breached its obligations in terms of the contract. The choice of remedy will be determined by factors such as the type of contract and type of performance, actual damage suffered and whether performance is still possible.

1              Remedies that aim to keep the contract in tact:

1 1.          Exceptio non adimpleti contract us – the innocent Party may refuse to perform its obligations in terms of the contract until the guilty Party performs its obligations.

1 2.          A claim for specific performance – the innocent Party may apply for a court order to compel the guilty Party to render its performance

1 3.          Interdict – the innocent Party may apply for a court order interdicting imminent and anticipated breach

2              Remedies aimed at cancellation of the contract:

2 1.          The innocent Party will have the right to cancel the agreement in exceptional and limited circumstances. The breach would have to be serious and the guilty Party must receive notice of the cancellation.

This remedy also involves reciprocal restitution in that every Party will be obliged to return that which was already performed or delivered by the other Party.

3              Remedies aimed at compensating the innocent Party for any loss or damage suffered as result of the breach of contract:

3 1.          This remedy is available in addition to any one of the remedies mentioned above.

The innocent Party may have a claim for damages if he can prove that he has suffered damages. The innocent Party may even be entitled to interest.

Should you have any queries in relation to your contracts and whether or not they have been breached; please do not hesitate to contact Martin Vermaak Attorneys in order to arrange a consultation that will make all the difference.

Bradley Cullingworth

Candidate Attorney