Study Unit 4
Performing Contractual Obligations
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The outcomes for this learning unit are that
you should be in a position to:
◦ Discuss Agency
◦ Discuss the nature of performance
◦ Discuss contractual breach
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The essential, residual & incidental terms of a
contract
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Express and implied terms
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Conditions
◦ The suspensive and resolutive condition
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Valid, void & voidable contracts
◦ Duress, Misrepresentation & undue influence
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…When one person, with the necessary
authority to do so, conducts a juristic act for
and on behalf of another in such a manner
that he obtains rights and obligations for the
other person without him acquiring any rights
or becoming accountable
 Fouché (2007) pg 244
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One person acts on behalf of another
The act is a juristic act
The act is authorised
The action results in a legal tie between two
people, one of which was not involved in the
original action
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By agreement
By operation of law
Through estoppel
By ratification
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By agreement Principal gives Agent
authority to act on his behalf
No formalities required
Can be by way of written Power of Attorney
Where one party in absence of
agreement has authority by law to
represent another
 Eg:
◦ Guardian representing a minor
◦ Curator acting for mentally insane
◦ Partner representing a partnership or
other partners
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Where a person creates the false impression
that another person may act on his behalf
and a third party acts on the strength of
that (mis)representation, the “principal” can
be bound by the false impression he
created.
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Where the “principal” gives his consent or
authority after the representation has taken
place
Unilateral act by principal
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The legal bond will exist between the
principal and the third party.
The agent does not acquire any rights or
duties
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To perform in accordance with the
principal’s instructions
Act honestly and in good faith
Display care, skill & diligence
Account to the principal
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To pay the agreed remuneration
To account
To reimburse the agent for all expenses
necessarily incurred by him
To indemnify the agent for all losses or
liabilities incurred in performing the
authorised act
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Where the agent acts on behalf of a pricipal
without disclosing the fact.
Requirements
◦ Agent must be authorised to act for principal
◦ Agent must have intended to contract on behalf of
principal
◦ Agent must fail to disclose agency at all
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Third party can sue principal or agent but not
both
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Principal (not agent) liable if agent guilty of
misrepresentation or duress
Agent liable if he acts outside of his
authority
◦ Third party may claim damages for
 Breach of contract
 Delictual damages for misrepresentation
 Damages for breach of implied warranty
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Agent liable for any guarantees he has
given (eg: that the principal will pay etc…)
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On fulfilment of the mandate
By expiry of agreed time period
Supervening impossibility of performance
Death of the agent or principal
By agreement
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Form and manner of performance should be
as specified in contract between the parties
unless it is clear that equivalent type of
performance acceptable
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If date and or time for performance has been
agreed upon, debtor has until then to
perform
If no agreement performance should be
immediate or within reasonable time
depending upon the individual circumstances
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Performance should occur at place specified
in contract
If no place specified, then debtor has to seek
out the creditor to perform
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Unless it is clear from the contract that the
debtor himself must perform personally, it is
acceptable for an agent of the debtor or even
a third party to perform
Performance must be tendered to the creditor
◦ Creditor can nominate an agent to receive
performance
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In legal tender
Debtor must stipulate what payment is for if
multiple debts – other wise creditor may
nominate
If party alleges performance, they bear onus
of proof
If creditor refuses or frustrates properly
tendered performance – breach by creditor
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Mora debitoris
Mora creditoris
Positive malperformance
Repudiation
Prevention of performance
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Mora Debitoris
◦ When the debtor fails to perform at the agreed time
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Two Requirements
◦ Performance must be delayed
◦ Delay must be the debtors fault
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Mora ex re – where a time for performance
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Mora ex persona – where no time for
has been set and debtor fails to perform, he
is automatically in mora
performance has been set & creditor then
demands performance within a reasonable
time & debtor fails to perform
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Mora Creditoris
◦ When the Creditor causes the debtor’s performance
to be delayed
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Performance must be dischargeable
Debtor must tender performance
Creditor must fail to co-operate & thereby
delay performance
Default must be due to the fault of the
creditor
Default by Creditor Default by Debtor
Debtor’s duty of
Creditor entitled to
care reduced
remedies for
breach of contract
Debtor entitled to
any counterperformance due
by creditor
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When debtor performs contrary to the
agreement
◦ Debtor tenders defective or improper performance,
or;
◦ Debtors does something not allowed in terms of the
agreement
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Behaviour by a party which indicates that they
do not intend to honour their agreement
◦ Eg, where party denies the existence of the
agreement or
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Specific performance
Damages
Cancellation
Penalty clause (roukoop etc)