Developing the Common Law of Contract in the Light of Poverty and Illiteracy: The Challenge of the Constitution

• Jurisdiction: South Africa
• Date: 16 August 2019
• Published date: 16 August 2019
• Citation: (2011) 22 Stell LR 845
• Author: DM Davis
• Pages: 845-864

845

DEVELOPING THE COMMON LAW OF

CONTRACT IN THE LIGHT OF POVERTY

AND ILLITERACY: THE CHALLENGE OF THE

CONSTITUTION

DM Davis

Judge President of the Competition Appeal Court

Honorary Professor in the Faculty of Law, UCT*

“What he [Hale] has to teach us is that the legal ground rules of economic struggle constitute the

economic bargaining power of the combatants... The process of circular causation works between the

private economic system and the public law making system as well as within the economy.”1

1 Introduction

South Africa is one of the most u nequal countries in the world, a condition

which is a product of more than three hundred years of colonial and racist rule.

The con stitutional settlement that ushered in democracy did not su mmarily

erase apartheid from the social, economic landscape. To an extent, the drafters

of the Constitution of the Republic of South Africa, 1996 (“the Constitution”)

understood t hat erasure would not be ach ieved by way of one silver bullet. It

could only occur by way of a journey towards the egalitarian vision pregured

in the const itutional text. At the same t ime the drafters u nderstood that legal

rules which reinforced pat terns of power required recongur ation if the

journey was to be unde rtaken.

For this reason the Constitut ion, after a long and an xious debate, prompted

in sign icant part by the decision of the Constit utional Court in Du Plessis

v De Klerk,2 in which the application of the substa ntive provisions of the

Bill of Rights as contained in the Constit ution Act 200 of 1993 (“the Interim

Constitution”) was narrowed almost exclusively to a vertical application,

boldly in sisted that disputes between pr ivate parties should be subjected to

constitutional scr utiny.

Section 8 reected the determination of the constitutional drafters to ensure

that private parties should also be bound by constitutionally entrenched rights.

A three-fold process was envisaged i n terms of this section:

(i) A cou rt must determine whether a private person is b ound by the

constitutional r ight as alleged.

(ii) If the private person is so bound, the court must apply legislation givi ng

effect to the right.

* This paper owes a g reat intellect ual debt to Karl K lare and Dun can Kennedy for e ducating me about the

importa nce of Robert Hale and thu s opening up a new intelle ctual vist a Thanks are also due to Sandra

Liebenberg and G eo Quinot for encou raging me to wri te this paper

1 D Kennedy “The Stak es of Law or Hale and Foucault” (1991) 15 Legal Studie s Forum 327 336

2 1996 3 SA 850 (CC)

(2011) 22 Stell LR 845

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(iii) If the re is no legislation giving effect to the applicable right, the court

must develop a rule of common law. In so doing, a court is empowered to

develop the rule of common law, both to give content to the constitutional

right a s well as to limit t he right, provided the limit ation accords w ith

section 36(1) (the general lim itations clause) of the Constit ution.3

In addition, the text provided for a fur ther mechanism to infuse all law with

constitutional values, namely section 39(2),4 which was designed to engage

both law and conduct not specically covered by any of the provisions set out

in the Bill of Rights.

Whatever the disputes ab out the scope of these provisions a nd their impact

upon existing common law,5 the idea was t hat the Const itution, whether

through a specic r ight or the inuenc e of its nor mative framework – itself

based upon the foundational principles of dignity, f reedom and equality –

would be central to a recongu ration of the backg round rule s in terms of

which all economic activit y took place.

The need for a post-apartheid legal order to interrogate existi ng rules of law

on the basis that private law r ules empower some actors, while subordinating

others, was well articulated by Madala J in the Du Plessis case where he

wrote:

“Ours is a multi-racial, multi-cultural, multi-lingual society in which the ravages of apartheid,

disadvantage and inequality are just immeasurable. The extent of the oppressive measures in South

Africa was not conned to government/individual relations but equally to individual/individual

relations. In its effort to create a new order, our Constitution must have been intended to address these

oppressive and undemocratic practices at all levels. In my view, our Constitution starts at the lowest

level and attempts to reach the furthest in its endeavours to restructure the dynamics in a previously

racist society.”6

Viewed within the matrix of this compelling observation, it was to be hoped

that the distribut ive importance of the ground rules of contract would have been

the subject of careful interrogation by the cour ts, now mandated to adjud icate

all law i n terms of a constitutional text, which, the Constitut ional C ourt has

asserted, contai ned a particular normative framework of justice.7

This paper seeks to engage with key cases in which South African cour ts, in

effect, ignored these challenges when deciding disputes based upon the law of

contract. The record reveals that the courts either eschewed the signicance of

the Constitution or simply nodded in the direction of the Constitution, before

proceeding in the opposite di rection. This paper employs the realist work of

3 MH Cheadle “Application” in MH Cheadle, DM Davis & NRL Haysom (eds) South African Const itutional

Law: the Bill of Rights 2 ed ( RS 3 2005) 3-1 3-4

4 S 39(2) stat es that “[w]hen interpre ting any legislation , and when developing the com mon law or

customar y law, every cour t, tribunal o r forum must pro mote the spirit , purport a nd objects of the Bil l of

Rights”

5 The most restricti ve approach is that adopte d by A Fagan “The Secondar y Role of the Spirit, Pur port and

Objects of the Bill of R ights in the Comm on Law’s Development” (2010) 127 SALJ 611

6 Du Plessis v De Klerk1996 3 SA 850 (CC) par a 163

7 Carmichele v Minister of Safet y and Security2001 4 SA 938 (CC) para 54 The problem is th at when

the Constitution al Cou rt a sserted the existence of an obje ctive nor mative framework sourced in the

Constitut ion, it failed to provide a clear explication or application in this judgment or any other subsequent

judgment of t he content and henc e the implication s of this frame work for furth er jurispru dential

development

846 STELL LR 2011 3

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