LAW OF CONTRACT PREVENTION OF PERFORMANCE MORA CREDITORIS

LAW OF CONTRACT PREVENTION OF PERFORMANCE & MORA CREDITORIS

Prevention of performance: Learning outcomes: 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. �

Study: � Van der Merwe et al Chapter 10 pp. 366 -369. � CASE: � Administrator, Natal v Edouard (A). 1990 (3) SA 581

Nature: � Conduct after conclusion of the contract by which the debtor makes it impossible for himself to perform. � Conduct: positive act or neglect to perform. � Impossibility may be total or partial. � Physically impossible, but also for all reasonable and practical purposes impossible.

Administrator, Natal v Edouard: � 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.

� 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.

� Breach of contract in the form of prevention of performance is complete as soon as performance has been prevented.

Requirements: � 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.

Distinction from other forms of breach: � Mora: performance is still possible, however late. � Positive malperformance: Performance has been rendered, but is defective. Prevention takes place before performance. � Repudiation: predicts eventual malperformance with relative certainty, while prevention predicts malperformance with absolute certainty.

Specific consequences: � 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.

Mora creditoris: Negative malperformance by creditor. � Learning outcomes: � 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.

Study: � Van der Merwe et al Chapter 10, p. 372. � CASES: � Pienaar v Boland Bank � LTA Construction v Minister of Public Works and Land Affairs.

Nature and forms: � CREDITOR wrongfully fails to render his co- operation to enable the debtor to perform. � Can occur before performance by the debtor.

Requirements: � LTA Construction v Minister of Public Works & Land Affairs: � 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.

� 4. The creditor or his employees must cause the delay. � 5. The creditor must be at fault (element of fault- intent or negligence). � 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.

Pienaar v Boland Bank: � Appellant borrowed an amount of money from the first respondent. � When debt had to be paid back, a third party paid the debt on behalf of the appellant. � Boland Bank as creditor refused to accept payment, since it was not made by the debtor himself.

� Court decided that if a third party performed on behalf of the debtor, it is seen as if the debtor him-or herself performed. � This would even be the case where performance was made by a third party against the wishes of the debtor.

The Principle of Reciprocity: � Exceptio non adimpleti contractus. � BK Tooling v Scope Precision Engineering.

What does the principle entail? � 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.

� It is an extraordinary remedy, not an action with which to commence litigation, but merely a “claim in replication”.

BK Tooling (Pty) Ltd v Scope Precision Engineering (Pty) Ltd: � FACTS: � At the end of 1973 the appellant received a drawing for the implementation of a rubber fitting tot the engines of certain Ford vehicles. � A company called Paulstra would manufacture such fittings and deliver same to Ford.

� In order to manufacture these fittings, Paulstra needed metal moulds. � The drawing received by the appellant from Paulstra provided complete measures, and allowed a tolerance of 0, 5 mm. � It was to be symmetrical, consisting of two identical halves that would fit on top of another.

� Appellant made the necessary drawings and at the end of 1973 requested the respondent to finalise the metal moulds to create a prototype. � Prototype was presented to Paulstra, who found it acceptable. � Paulstra then placed an order for 16 moulds at R 5000 each.

� The appellant only received the products on the 19 th of June 1974. � Appellant had not yet paid the respondent for the first order of moulds, and the respondent was unwilling to manufacture a second order. � Respondent also went overseas and only returned on the 20 th of July 1974. By that time, the appellant was already under huge pressure from Paulstra to deliver the order.

� On the 25 th of August 1974 Paulstra tested the moulds. They did not comply with the agreed specifications. � On the 16 th of August the respondent contacted the appellant for payment of the first order. The appellant refused to pay as the work was unsatisfactorily done.

� The respondent requested that the moulds be given back for rectification, but the appellant refused.

Application: � The appellant based his claim on the exceptio in denying that the plaintiff had “duly performed its obligations”. � Jansen JA mentioned a few “aspects” of the principle of reciprocity and its application by means of the exceptio.

� Continued in next lecture…