From bona fides to ubuntu: The quest for fairness in the South African law of contract

• Jurisdiction: South Africa
• Published date: 24 December 2019
• Author: Hutchison, D.
• Pages: 99-126
• Date: 24 December 2019

99

From bona des to ubuntu:

The quest for fairness in the

South African law of contract

DALE HUTCHISON*

The role of fairness in the law of contract – and, more particularly,

the extent to which a court may refuse to enforce an otherwise valid

contract term on the grounds of unfairness – has for many years been

a very contentious issue in South Africa. The Constitutional Court and

the Supreme Court of Appeal appear to hold divergent views on the

matter. This has led to some tension between these two courts, and is

causing an undesirable level of legal uncertainty, as judges in the High

Court choose to follow one approach or the other. Each new issue

of the law reports promises to herald another development in what

has become an ongoing saga. This paper traces the unfolding story

through the cases, and concludes with a plea for a denite r uling by

the Constitutional Court on the issue.

I INTRODUCTION

My association with Danie Visser goes back a long way. We both

applied for the same chair at the University of Cape Town in 1983

and the selection committee evidently had a hard time choosing

between us, because in the end the University was persuaded to

appoint both of us! Since then, Danie has proved to be a true friend

and an accomplished scholar. His numerous publications include

one on the role of equity in the law of contract,1 which I believe

makes my choice of topic a tting one.

The topic has caused a considerable amount of controversy in

recent times. Indeed, it can safely be said that the most burning issue

in the modern South African law of contract is the extent to which

a judge can refuse to enforce an otherwise valid contract term on

the grounds that, in the particular circumstances of the case, he or

* BCom LLB (Cape Town) PhD (Cantab); Emeritus Professor, University of

Cape Town.

1 S Laing & D Visser ‘Pr inciples, policy and practice: Human rights and the

law of contract’ in E Reid & D Visser (eds) Private Law and Human Rights, Bringing

Rights Home in Scotland and South Africa (2014) 330.

2019 ACTA 99

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100 PRIVATE LAW IN A CHANGING WORLD

she considers that it would be unduly harsh, unfair or unreasonable

to do so.

The issue is a dicult one because of the competing goals of

certainty and fairness in the law of contract. Certainty is a rule of

law concern in commercial dealings: since contracts are planned

transactions, the application of the law must produce predictable

outcomes. On the other hand, unless those outcomes are generally

considered to be acceptable by fair and reasonable people in the

particular context, contract law will lose its legitimacy.

Finding the right balance between these competing goals

is one of the most intractable problems of contract law, and one

that is shared by all legal systems. Before 1994, the South Afr ican

courts undoubtedly favoured certainty over fairness but now, in the

constitutional era, the pendulum is swing ing the other way. The

Constitutional Court has repeatedly stated that contract law must

be infused with the constitutional values of fairness, good faith and

ubuntu.2 Few would disagree with that sentiment, but, as Wallis has

observed,3 some of the court’s pronouncements ‘appear to suggest

that the enforcement of contractual obligations depends on the

judicial sense of reasonableness, fair ness and good faith rather than

the terms of the contract’ – a suggestion that runs counter to the

strongly held and frequently expressed view of the Supreme Court

of Appeal.

This apparent dierence in approach has led to some tension

between our two top courts, as evidenced by the contributions to

the law journals of a number of SCA judges.4 It is also breeding

uncertainty in the law of contract, to such an extent that a recent

judgment by Davis J commences with the rather dramatic statement

that ‘[t]his case goes to the heart of the debate as to what now

constitutes the law of contract in constitutional South Africa’.5

2 See the discussion below.

3 M Wallis ‘Commercial certainty and constitutionalism: Are they compatible?’

(2016) 133 SALJ 545 at 550.

4 See, in addition to the article by Wallis (n 3), C Lewis ‘The uneven journey

to uncertainty in contract’ (2013) 76 THRHR 80; L Harms ‘The puisne judge, the

chaos theory and the common law’ (2014) 131 SALJ 3; and cf F Brand ‘The role of

good faith, equity and fairness in the South African law of contract: The inuence

of the common law and the Constitution’ (2009) 126 SALJ 71, and ‘The role of

good faith, equity and fairness in the South African law of contract: A further

instalment’ (2016) 27 Stell LR 238.

5 Beadica 231 CC and Others v Trustees, Oregon Unit Trust and Others 2018 (1) SA

549 (WCC) para 1.

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