Law for Tourism

1. Law for Tourism Study Unit 4 Performing Contractual Obligations

2. Outcomes • 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

3. Recap of Study Unit 3 • The essential, residual & incidental terms of a contract • Express and implied terms • Conditions • The suspensive and resolutive condition • Valid, void & voidable contracts • Duress, Misrepresentation & undue influence

4. AGENCY

5. What is Agency? • …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

6. The elements of agency • 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

7. How does agency arise? • By agreement • By operation of law • Through estoppel • By ratification

8. Authority by Agreement • By agreement Principal gives Agent authority to act on his behalf • No formalities required • Can be by way of written Power of Attorney

9. Authority by Operation of Law • 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

10. Authority by Operation of Estoppel • 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.

11. Authority by Ratification • Where the “principal” gives his consent or authority after the representation has taken place • Unilateral act by principal

12. The Effects of Representation • The legal bond will exist between the principal and the third party. • The agent does not acquire any rights or duties

13. Duties of the Agent • To perform in accordance with the principal’s instructions • Act honestly and in good faith • Display care, skill & diligence • Account to the principal

14. Duties of the Principal • 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

15. The Doctrine of the Undisclosed Principal • 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 • Third party can sue principal or agent but not both

16. Liability of the Agent • 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 • Agent liable for any guarantees he has given (eg: that the principal will pay etc…)

17. Termination of Agency • On fulfilment of the mandate • By expiry of agreed time period • Supervening impossibility of performance • Death of the agent or principal • By agreement

18. PERFORMANCE OF CONTRACTUAL OBLIGATIONS

19. Form and manner of performance • Form and manner of performance should be as specified in contract between the parties unless it is clear that equivalent type of performance acceptable

20. Time of performance • 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

21. Place of performance • Performance should occur at place specified in contract • If no place specified, then debtor has to seek out the creditor to perform

22. Who must perform? • 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

23. Payment & Proof of Performance • 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

24. Breach of Contract • Mora debitoris • Mora creditoris • Positive malperformance • Repudiation • Prevention of performance

25. Default by the debtor • Mora Debitoris • When the debtor fails to perform at the agreed time • Two Requirements • Performance must be delayed • Delay must be the debtors fault

26. Failure to perform on time • Mora ex re – where a time for performance has been set and debtor fails to perform, he is automatically in mora • Mora ex persona – where no time for performance has been set & creditor then demands performance within a reasonable time & debtor fails to perform

27. Default by the creditor • Mora Creditoris • When the Creditor causes the debtor’s performance to be delayed

28. Requirements for moracreditoris • 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

29. Consequences of default

30. Positive Malperformance • When debtor performs contrary to the agreement • Debtor tenders defective or improper performance, or; • Debtors does something not allowed in terms of the agreement

31. Repudiation • 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

32. Remedies for breach of contract • Specific performance • Damages • Cancellation • Penalty clause (roukoop etc)