The Role of Good Faith, Equity and Fairness in the South African Law of Contract: A Further Instalment

• Jurisdiction: South Africa
• Citation: (2016) 27 Stell LR 238
• Author: Fritz DJ Brand
• Date: 27 May 2019
• Pages: 238-253
• Published date: 27 May 2019

THE ROLE OF GOOD FAITH, EQUITY AND

FAIRNESS IN THE SOUTH AFRICAN LAW OF

CONTRACT: A FURTHER INSTALMENT

Fritz DJ Brand

SC BA LLB LLM (Stell) LLD (hc) UFS

Former Judge of Appeal of the Supreme Court of Appeal

Judge of Appeal of the Botswana Court of Appeal

Professor Extraordinary in Private Law, University of the Free State

Honorary Professor of Private Law, University of Stellenbosch*

1 Introduction

Ever since Professor Gerhard Lubbe and I were in the same rst year class at

Stellenbosch University, I have been intimidated by his knowledge and grasp

of the law. This became even more evident in our thi rd year when I gained the

perception that there was perhaps one person who knew more about contract

law than Gerhard, a nd that was our lecturer, Professor JC de Wet.1 Maybe not

surprisingly, Gerhard immediately succeeded Professor De Wet in teaching

contract law at Stellenbosch University, with great abil ity. It is therefore with

some trepidation t hat I embark upon a subject in Gerh ard’s eld of expertise,

well knowing that he will probably read it. Yet, I was told that if I wanted to

contribute to a publication in h is honour, this was the only way to do so. Since

I cannot forego that special privilege, I have decided to put my reputation at

risk.

2 Milestones of Barkhuizen and York

My anxiety with th is contribution is somewhat exacerbated by the topic

that I have chosen, namely the role of good faith, equity and fairness in

South African cont ract law. This is so because the judgments to which I

have contributed on this topic in the Supreme Cour t of Appeal (“SCA”) have

invited a fair amount of criticism from academic circles. Despite this, my

choice was dictated by the interest in the subject from both the courts and

academics in the rece nt past.2 The last time I tried my hand at this t heme in a

* I am gratef ul to Sechaba Mohapi, Law Re searcher at the Supre me Court of Appeal, for h is able research

assistanc e in commenting on t he draft and proof reading of this p aper.

1 For more on Prof de Wet, see J du Plessis & G Lubbe (eds) A Man of Princi ple: The Life and Legac y of JC

de Wet (2013).

2 G Glover “Lazar us in the Constitut ional Court: An exhu mation of the excepti o doli generalis?” (2007 )

124 SALJ 449; J Barn ard-Naude “’Oh, what a tan gled web we weave’ … hegemony, freedom of contract ,

good faith and transfor mation – tow ards a pol itical friendship in the politic s of contra ct” (2008) 1

Constitutional Court Review 187; S Liebenberg “ The application of soc io-economic rig ht to private law”

(2008) T SAR 464; D Bhana “Cont ract Law and the Cons titution: Breden kamp v Standard Ban k of South

Africa (SCA)” (2014) 29 SAPL 508; I Rautenbach “Con stitution and Co ntract: The Appl ication of the Bill

of Rights to Cont ractual Clauses a nd their Enforcement: Br edenkamp v Standar d Bank of South Africa

238

(2016) 27 Stell LR 238

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non-judicial capacity was in a 2009 issue of the South African Law Journal.3

Lest I be misunderstoo d, the purpose of this contribution is to reect my own

understandi ng of the positions taken by the SCA and the Constitutional Cour t

on the subject since my earlier contr ibution in 2009. Some may say that I had

ample opportun ity to formulate my view when I was still in the SCA and that

I am now trespassing on academic turf. To an extent that, of course, is true,

but not entirely. On the SCA one writes for a panel. To secure unanimity and

thus avoid dissenting or separate concurring judgments, you are sometimes

compelled to compromise. In my present p osition I only speak for myself and

hence with less restra int. As to encroaching on academic t urf – I shall try to be

as unconfrontat ional as possible. Although I have read many of the academic

articles on the subject, which are mostly critical of the SCA’s approach, I

will not attempt to prove them wrong. Apart from the fact that a debate of

that kind is likely to exceed the prescribed limits of my contribution, there

will be no arbiter to the debate. I am mindful that my approach may create a

one-dimensional, one -sided picture. However, once one sets out to paint one

side of the picture, a one-sided exposition seems t o be inevitable. Fortunately,

the other side has been very competently painted on several occa sions and

will undoubtedly be repainted again, perhaps even in response to this article.

Stated more succinctly my disclaimer is this: the focus of this contr ibution

is to state the law as it cur rently is with regard to the role of fair ness and

good faith in the South Af rican law of contract. Consequently, I do not engage

directly with the views of aca demic writers suggesting what the law should be

as opposed to what it cur rently is.

The most recent judgment of the SCA on the subject at the time of my

earlier contribution was S outh African Forestr y Co Ltd v York Timbers Ltd

(“York ”),4 while the last word then sp oken by the Constitutional C ourt was in

Barkhuizen v Napier (“Barkhuizen”).5 Hence, I assumed in my 2009 ar ticle

that Yor k represented the point of view of the SCA which was broadly stated

as follows:

“[A]lthough abstract values such as good faith, reasonableness and fairness are fundamental to our law

of contract, they do not constitute independent substantive rules that courts can employ to intervene

in contractual relationships. These abstract values perform creative, informative and controlling

functions through established rules of the law of contract. They cannot be acted upon by the courts

directly. Acceptance of the notion that judges can refuse to enforce a contractual provision merely

because it offends their personal sense of fairness and equity will give rise to legal and commercial

(SCA)” (2011) 74 THRHR 510; L Hawthorne “ Concretising t he open norm of publi c policy: the equal ity of

bargaini ng power and exploitation” (2014) 77 THRHR 407; PJ Sutherland “ Ensuring cont ractual fai rness

in con sumer cont racts af ter Bark huizen (CC) – Part 1” (2008) 3 Stell LR 390; F du Bois “C ontractual

obligations and t he journey from na tural law to const itutional law” (2015) Acta Juridica 281; R Sharrock

“Unfair en forcement of a contrac t: A step in the right d irection? Botha v Rich a nd Combined Devel opers

v Arun Holdings (2015) 27 SA Merc L J 174.

3 FDJ Brand “The r ole of good faith, equit y and fairn ess in the South A frican law of cont ract: The in fluence

of the common law and the Const itution” (2009) 126 SAL J 71. For an earlier contribu tion see F Brand &

D Brodie “Good Faith in Contract Law” in R Zimmer mann, D Visser & K Reid (eds) Mixed Legal Systems

in Comparati ve Perspective: Prop erty and Obligat ions in Scotland an d South Africa (200 4) 94-116.

4 2005 3 SA 323 (SCA) paras 27-28.

5 2007 5 SA 323 (CC). For a useful overview as to how the d ebate s urroundin g fair ness, equity and

reasonablene ss developed since Bank of Li sbon and South Afri ca Ltd v De Ornelas 1988 3 SA 580 (A) –

see Rautenba ch (2011) THRHR 511; Sharrock (2015) SA Merc LJ 181.

EQUITY AND FAIRNESS IN THE SA LAW OF CONTRACT 239

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