Breach of contract

• Breach of contract


  Failure to honour contractual obligations, without lawful excuse
• Forms of breach


  • Mora debitoris
  • Mora creditoris
  • Positive malperformance
  • Repudiation
  • Prevention of performance
• Mora debitoris


  Debtor fails to make timeous performance
• Mora creditoris


  Creditor fails to timeously cooperate with debtor
• Positive malperformance


  Debtor performs defectively
• Repudiation


  Unequivocal intention not to honour the agreement
• Prevention of performance


  Performance of contract rendered impossible
• Both mora creditoris and mora debitoris relate to the time of performance (and can be termed negative malperformance)
• Repudiation


  Either Mr Handyman or Bheki denies the existence of the contract, or unjustifiably claims that the contract has been cancelled
• Anticipatory breach


  Breach can be committed prior to the stipulated time for performance
• Remedies for breach of contract

  • Uphold the contract and insist on its fulfillment
  • Rescind the contract (if sufficiently serious to merit rescission), tender the return of other party's performance, and claim restitution of any performance already made
• Mora debitoris


  The failure of the debtor, without lawful excuse, to make timeous performance of a positive obligation that is due and enforceable and still capable of performance in spite of such failure
• Mora debitoris is different from breach of a negative obligation or performance that is incomplete or defective, debtor's delay rendering performance impossible, and the debtor's words/conduct evidencing an intention not to honour the obligation
• Requirements for mora debitoris

  • Debt is due and enforceable
  • Time for performance fixed and debtor failed to perform timeously
  • Such failure is without lawful excuse
• Due and enforceable debt


  Creditor has a valid right to claim immediate performance
• Mora ex re


  Automatic placing into mora where the time for performance is stipulated in the contact, and failure to perform on time
• Mora ex persona


  If contract silent as to date for performance, the creditor must place the debtor in mora (ex persona) by demanding that they perform on or before a date or time that is reasonable in the circumstances
• Reasonable period for performance

  Depends on circumstances, onus on debtor to show it was unreasonable
• Fault not required for mora debitoris, courts only excuse debtor in certain circumstances
• Consequences of mora debitoris

  • Specific performance can be claimed
  • Perpetuatio obligationis
  • Recission of contract (where time is of the essence)
  • Damages
• Perpetuatio obligationis


  Supervening impossibility of performance usually terminates the contract, but if debtor was in mora when performance became impossible, the obligation continues to exist
• Damages for mora debitoris


  Compensate for any losses the creditor suffers as a result of the delay, including interest payable from the date of mora
• Rescission for mora debitoris

  Only available where time is of the essence, either by express agreement, tacit agreement, or creditor giving notice to make time of the essence
• Mora creditoris


  Failure of the creditor to timeously provide their cooperation to the debtor in the performance of a duty
• Mora creditoris and mora debitoris cannot coexist in the same obligation
• Requirements for mora creditoris

  • Debtor is under an obligation to make performance
  • Creditor's cooperation must be necessary
  • Tender of performance
  • Delay
  • Fault
• Consequences of mora creditoris

  • Cancellation (when time is of the essence)
  • Damages
• Creditoris


  Creditor's obligations
• Mora debtoris


  Debtor's delay in performance
• Creditoris and mora debtoris cannot coexist in the same obligation
• Where the contract provides for reciprocal obligations, the same party may be guilty of both mora creditoris and mora debitoris at the same time
• Requirements for mora creditoris

  • Debtor is under an obligation to make performance
  • Creditor's cooperation must be necessary
  • Tender of performance (tendered performance must be full and perfect)
  • Delay (If time to perform has been fixed, then mora creditoris arises automatically, if not, then the debtor must provide reasonable notice to the creditor)
  • Fault (debatable but generally the delay must be due to the fault of the creditor, ie not by vis maior or casus fortuitus)
• Consequences of mora creditoris

  • Cancellation: Right to cancel is when time is of the essence
  • Damages: for any loss suffered as a result of the mora
  • Specific performance: in suitable circumstances, at debtor's election, may sue for order to compel creditor to co-operate
  • Counter-performance: Reciprocal contracts – where the creditor is uncooperative, the debtor can sue him for counter-performance
  • Care of article and supervening impossibility of performance: Mora creditoris relieves the duty of the debtor to take care of an article that s/he has to deliver
  • Effect on Security: Releases sureties (unclear of its effect on mortgages, pledges, liens)
  • Discharge of the Debt: Unless debtor cancels the agreement, or obtains an order compelling co-operation, unclear what the debtor must do to discharge the debt
• Positive malperformance


  Relates to the content of the performance made (as opposed to: mora creditoris/mora debitoris which relates to the time of performance)
• Forms of positive malperformance


  • Duty to do something, and debtor performs but in an incomplete or defective manner
  • Duty to refrain from doing something (obligatio non faciendi), and debtor does the thing he is supposed to refrain from doing
• Unclear if fault is an element of malperformance
• Remedies for positive malperformance

  • Rescission: If lex commissioria for the particular type of malperformance – creditor may cancel (but must abide by any notice period)
  • Rescission: If no lex commissoria – cannot cancel if 'substantial performance of the contract'. May only cancel if the performance is sufficiently serious
  • Remedies aimed at fulfillment of the contract: Accept the defective or incomplete performance as partial performance of the contractual obligation (and claim damages that are the difference in value), or Reject the defective performance and demand either specific performance or surrogate damages
• Surrogate damages are different from consequential damages
• Rejection of defective performance does not amount to rescission of the contract
• Repudiation


  Occurs where one party to the contract, by words or conduct, and without lawful excuse, manifests an unequivocal intention no longer to be bound by the contract or by any obligation forming part of the contract