Without a doubt, the Lockdown instituted in terms of the Disaster Management Act from 26 March 2020, resulted in major confusion and uncertainty in the economy. Businesses and parties to any contract was subsequently left begging the question, whether they were bound to perform (pay/deliver etc.) in terms of their respective agreements they were tied into, and given the reigning conditions thereof.

Fortunately the law in general and specifically the South African law evolved to make provision for these type of situations over centuries. Parties to a contract are forthwith bound by the clauses incorporated in the said contract which they undersigned. Therefore thorough regard should be given to interpret the wording of each and every agreement to determine which of the following regulators will apply to the agreement.

Most coherently drafted agreements include a force majeure clause that regulates the rights and obligations of contractual parties to an agreement. This clause determines what should follow if a certain vis major (Act of God) arises. The examples of vis major or plainly stated, Acts of God, include but are not limited to, pandemics, earthquakes, floods, riots and wars etc. Usually these clauses indicate that if such a vis major event arises, the contractual parties are temporarily suspended from performing in terms of the agreement. It may also be seen that one of the parties to the contract bears the risk if such an event arises.

The contracting parties may use the force majeure clause to either narrow or broaden the common law doctrine of a Supervening Impossibility. The material effect that a force majeure clause has on an agreement, solely depends on the drafting of the said clause.

In the absence of a force majeure clause, the South African common law doctrine of a Supervening Impossibility will apply. This common law doctrine determines that if such an impossibility has arisen, parties to the agreement are excused of their obligation in terms thereof.

This doctrine is subject to two qualifiers in order to be applied to an agreement. Firstly the agreement’s terms must be objectively impossible due to a vis major or casus fortuitous event. The court ruled in Frye’s (Pty) Ltd v Ries 1957 3 SA 575(A) that the personal incapability to perform in terms of the contract is not enough reason to rely on the doctrine of Supervening Impossibility, on the flipside, absolute impossibility is also not the benchmark. Secondly, the vis major or casus fortuitous must have been unforeseen and unavoidable.

The Lockdown rules and regulations rendered many acts and the conduct of certain services in terms of existing agreements illegal, thus making the performance at the very least objectively impossible and made default in terms of the agreement’s obligations unavoidable for either of the parties undersigned to the agreement.

The Supreme Court of Appeal held in Transnet Ltd t/a National Ports Authority v Owner MV Snow Crystal 2008 (4) SA 111 (SCA) , that:

“As a general rule impossibility of performance brought about by vis major or casus fortuitous will excuse performance of a contract.  But it will not always do so. In each case it is necessary to ‘look to the nature of the contract, the relationship of the parties, the circumstances of the case, and the nature of the impossibility invoked by the defendant, to see whether the general rule ought, in the particular circumstances of the case, to be applied’.  The rule will not avail a defendant if the impossibility is self-created; nor will it avail the defendant if the impossibility is due to his or her fault.  Save possibly in circumstances where a plaintiff seeks specific performance, the onus of proving impossibility will lie upon the defendant.”

As discussed herein, each agreement has its own unique circumstances to be taken into account if one intends to rely on any remedies provided in either an incorporated force majeure clause in an agreement or the South African common law doctrine of a Supervening Impossibility in the absence of the aforesaid force majeure clause.

Do not hesitate to contact us to assist in your contractual matters, such as leases, service level agreements(“SLA’s”) and the like

 

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[1] “Tacit Hypothec – Right of the Landlord Over Property” Eviction Lawyer 10 March 2019.

[2] Solgas (Pty) Ltd v Tang Delta Properties CC (11388/2015) [2016] ZAGPJHC 158 (20 April 2016)

[3] Bloemfontein Municipality v Jacksons 1929 AD 266

[4] Magistrates’ Courts Act 32 of 1944 (MCA)