Analyses: Notices in terms of the National Credit Act: Wholesale National Confusion

• Jurisdiction: South Africa
• Published date: 16 August 2019
• Citation: (2010) 22 SA Merc LJ 595
• Date: 16 August 2019
• Pages: 595-607
• Author: JM Otto

Analyses

Notices in Terms of the National CreditAct:

Wholesale National Confusion. Absa Bank Ltd v

Prochaska t/a Bianca Cara Interiors;Munien v

BMW Financial Services;Starita v Absa Bank

Ltd;FirstRand Bank Ltd v Dhlamini

JM OTTO

University of Johannesburg

1 Introduction

Breach of contract, like mosquitoes, naughty children and goalless soccer,

is a fact of life. Should one ask a layperson what a creditor’s right is if breach

of contract occurs, he or she will invariably and very conf‌idently answer that

the creditor may cancel the contract. In fact, many lawyers who are not

regularly involved with contracts will provide the same response. This is, of

course, not correct. Cancellation of a contract is an extraordinary remedy.

Broadly speaking, cancellation is allowed only when the breach is material

enough to justify termination or when the creditor can rely on a lex

commissoria in the contract (DJ Joubert General Principles of the Law of

Contract (1987) at 236; S van der Merwe et al Kontraktereg: Algemene

Beginsels 3 uitg (2007) at 424). A lex commissoria is a clause that gives the

creditor the right to cancel the contract should the debtor commit breach

thereof (Joubert op cit at 236). It is a consensual right of cancellation. The

wording of the clause will determine the circumstances under which the

creditor may exercise the right. More often than not, the clause is cast in very

wide terms. This will enable the aggrieved party to cancel the contract,

regardless of the seriousness of the breach. According to the positive law at

present, he may do this even if the breach is trivial (Oatorian Properties (Pty)

Ltd v Maroun 1973 (3) SA 779 (A); Joubert op cit at 237). It remains to be

seen whether the courts will countenance the enforcement of the clause (in

contradistinction to the validity of the clause itself) under circumstances that

may lead to oppressive or harsh results (JM Otto ‘Die Konsensuele

Terugtredingsreg (lex commissoria). Breidelloos Afdwingbaar?’ 2001 Tydskrif

vir die Suid-Afrikaanse Reg 203).

The South African Parliament has for many decades, and in various

legislative enactments, curbed the exercise of the right contained in a lex

595

(2010) 22 SA Merc LJ 595

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