A Bird’s-Eye View of the Current State of the Law relating to the Interpretation of Contracts and the Slow Death of the Parol Evidence Rule
Pages | 18-24 |
Author | Conor Mcfadden,Daniel Hart,Johan Coertze |
Published date | 01 December 2021 |
DOI | 10.10520/ejc-btclq_v12_n4_a4 |
Date | 01 December 2021 |
18 © Siber ink
A Bird’s-Eye View of the
Current State of the Law
relating to the Interpretation
of Contracts and the Slow
Death of the Parol Evidence
Rule
JOHAN COERTZE* & DANIEL HART†
(Under the supervision of CONOR MCFADDEN‡)
ABSTRACT
The legal rules applicable to the interpretation of contracts and, more specifi-
cally, the rules regarding the admission of extrinsic evidence by a court when
tasked with the interpretation of a contractual provision, have undergone
substantial development over the preceding two decades, which develop-
ment came to a head in two recent judgments by the Supreme Court of
Appeal and the Constitutional Court.
This article explores how recent judgments have grappled with the
inherent conflict between the contemporary expansive approach to the inter-
pretation of contracts, one which permits the admission of extrinsic evidence,
and the more traditional approach which embraces the common-law parol
evidence rule and a reluctance to admit extrinsic evidence save in exceptional
circumstances.
The article then examines, firstly, the Constitutional Court’s judgment in
University of Johannesburg v Auckland Park Theological Seminary and Another
2021 (8) BCLR 807 (CC); 2021 (6) SA 1 (CC), where the court, in departing
from the earlier decisions of the SCA, held that a court should err in favour of
admitting all extrinsic evidence and that this approach would not effect the
application of the parol evidence rule.
Secondly, the article considers the manner in which the effect of this
judgment, specifically in relation to the parol evidence rule, was construed
by the Supreme Court of Appeal in the subsequent judgment of Capitec Bank
Holdings Limited and another v Coral Lagoon Investments 194 (Pty) Ltd and
others 2021 ZASCA 99.
The article concludes with a summary of the current state of the South
African law relating to the interpretation of contracts, and specifically the
approach to the admission of extrinsic evidence when a court is tasked with
interpreting a contractual provision.
* Associate, Corporate Commercial and Tax, Fasken.
†
Senior Associate, Corporate Commercial, Fasken.
‡ Partner, Corporate Commercial and Tax, Fasken.
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