Law of Contract

1. Law of Contract UNIT 8 POSSIBILITY OF PERFORMANCE

2. Background: • Objectively possible. • Impossibilium nulla obligatio est: No obligation is created. • Requirement stems from Roman and Roman-Dutch law. • Undertaking to do the impossible has from the earliest times been regarded as an irrational choice which could not lead to the conclusion of a valid agreement.

3. Reason: It is unreasonable to hold a person bound to initial impossibility. • Point of departure: Neither party would have contracted if the actual state of affairs had been known, and therefore the risk of impossibility cannot be attributed to either of them.

4. Meaning of “impossibility” • 1. Subjective (Relative) impossibility: • Debtor is unable to perform. • Someone else may still be able to render the performance in question. • It relates to the inability of the particular debtor to perform.

5. 2. Objective (absolute) impossibility: • General impossibility to perform. • No-one is able to render performance in the eyes of the law. • Examples:

6. Delivery of a non-existent thing. • Res extra commercium: Attempt to sell a natural person. • Mandate to sell shares on the stock exchange which are not listed at all.

7. Test for objective impossibility: Pragmatic. • An absolute physical impossibility will satisfy the test. • A performance that is physically possible may be rendered objectively impossible if insistence on its performance would be unreasonable in the circumstances.

8. If performance is prohibited by law, the inability to perform may be treated as an instance of objective impossibility or illegality. • If performance is merely difficult, it would not amount to objective impossibility, but to subjective impossibility. • Performance may however be so difficult an lead to such hardship that it may be considered objectively impossible.

9. Effect of impossibility: • Subjective impossibility: Does not prevent the creation of an obligation. • If debtor does not perform eventually: commits breach of contract. • Objective impossibility: No obligation is created in terms of that performance. • Guarantee: Person who guarantees performance is bound thereto, even of possibility is objectively impossible.

10. BlouBulBoorkontrakteurs v McLachlan: • Facts: • Contractors would clean a drilling hole to a depth of 132 metres at R18 per metre. • Necessary material would also be installed at that depth, also at R18 per metre. • Steel poles and waste were found in the hole which made further drilling impossible.

11. Legal Question: • Objectively or subjectively impossible? • Could other company with better material perhaps have rendered the performance in question?

12. Decision: • Performance was objectively impossible. • No obligation was created in terms of that performance.

13. Ratio decidendi: • Eloff, JP: • Where impossibility is raised, it is no longer about the question of the presence of consensus . What is then applicable is that one of the ways in which an obligation had arisen, can be eliminated. It ought to be mentioned that the appellant’s claim to impossibility can only succeed if the impossibility is (objectively speaking) absolute.

14. TEST 1 • 8 MARCH 2010. • 08:30 • HMS, SSO • 45 MARKS, 1 HOUR.

15. UNITS 1-7 • RELEVANT CHAPTERS FROM TEXT BOOK.

16. COURT CASES: • UNIT 1: • Brisley v Drotsky. • UNIT 2: • Du Toit v Atkinson Motors.

17. UNIT 3: • Preller v Jordaan. • UNIT 4: • Steyn v LSA Motors.

18. UNIT 5: • Reid v Jeffreys Bay Property Holdings. • Driftwood Properties v McLean. • Craib v Crisp. • UNIT 6: • De Jager v Burger.

19. UNIT 7: • SA Sentrale Graanmaatskappy v Shifren en Andere.