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THE DO’S AND DON’TS OF CONTRACT CANCELLATIONS

Fri, 29 Jun 2018 08:58:17 +0000

Every person, whether an individual or a juristic person, will find themselves in a situation where they will want to terminate a contract. The aim of this article is to set out the requirements for terminating a contract as well as to give basic guidance when doing so.

When a person wants to cancel a contract, the cancelling party (innocent party) will have a choice to either cancel the contract or to enforce it. This article refers to the innocent party and the party in breach. The reader must however remember that fault it not a requirement for breach of contract.

The law regards breach of a contract as a wrongful act in itself which allows the innocent party to cancel the contract. It is important to remember that cancelling a contract is an extreme remedy that is only available in exceptional circumstances, namely where there is a cancellation clause or where the breach of contract is material or serious. If the contract is however silent on cancellation, the innocent party may still cancel the contract provided that the said breach is material or serious in nature.

The point of departure when cancelling a contract is to determine what the exact terms of the contract are, i.e. if the contract has a cancellation clause or not and whether there is a date of performance or not.

If the contract has a cancellation clause, the innocent party will be able to cancel the contract in the event of a breach of a term thereto. The innocent party must however take care not to cancel the contract incorrectly, otherwise the party in breach may interpret the cancellation as a repudiation of the contract, in which case the party in breach will also have the right to cancel the contract.

In the event where the contract does not have a cancellation clause, the innocent party will only be able to cancel the contract if the breach is material in nature. What constitutes a material breach depends on the terms of the contract. According to South African case law, a material breach is one which goes to the root of the contract and constitutes a breach of a vital term thereto.

Depending on the type of breach, the innocent party might have to give the party in breach notice of same. This will be the case where there is no date of performance specified in the contract. The innocent party must then demand performance by giving the party in breach reasonable notice to perform before he will be able to cancel the contract.

On the flip side, if a date of performance is specified in the contract, and a party does not perform in time and as stipulated, that party will be in breach, otherwise referred to as being in mora. It does however not automatically give rise to the right to cancel the contract. The only instance where there will be an automatic right to cancel a contract is if there is a cancellation clause or a suspensive condition in the contract.

A contract containing a suspensive condition will terminate automatically unless the suspensive condition is fulfilled or waived. If there is not a cancellation clause in the contract and no date of performance, the innocent party must give notice to the party in breach that time is of the essence and give him a reasonable time to perform.

In summary, the requirements for cancelling a contract vary according to the terms thereto, the type of contract and the factual scenario. There are no formalities for cancelling a contract unless the parties otherwise agree and/or a statute (i.e. Alienation of Land Act and the National Credit Act) prescribes same.

Other requirements include that the innocent party must give reasonable notice to the party in breach that they are cancelling the contract, which cancellation becomes effective from the time the cancellation comes to the attention of the party in breach.

The consequences of cancelling a contract are that the obligations to perform terminate and the parties are obligated to return what has been performed. If both parties agree to the cancellation, the preferred route would be to enter into a cancellation agreement, setting out what needs to be returned, claims for damages etcetera.

Considering that each contract and factual scenario differs and will be judged and interpreted accordingly, readers are advised to obtain legal counsel before cancelling a contract.

Reference List:

“Contract: General Principles” by Van Der Merwe, Van Huyssteen, Reinecke & Lubbe 2004 (Juta Law)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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HOW AND WHEN TO USE THE SMALL CLAIMS COURT

Wed, 02 May 2018 12:51:45 +0000

The small claims court (SCC) is for anyone who wants to institute a minor civil claim against someone else. You can also claim against companies and associations. However, the claims are limited to amounts that are less than R15 000. This excludes the State, meaning a person cannot make a claim against a local municipality, for example. Claims made in the SCC are done quickly and cheaply without having to use an attorney and anyone, except juristic persons, are allowed to use them.

Read more about the SCC on The Department of Justice and Constitutional Development’s website: justice.gov.za

Where do I start?

If you are going to institute a claim against someone else, be smart about it. Don’t make a claim against someone who you know has no money to pay you back, such as an unemployed person.

Before running to the court to make a claim, first contact the person you intend to claim from and ask them to fulfil your request. Let them know you are planning on going to the court to make a claim against them if they don’t comply.

Perhaps the person is not interested in your claim, then send them a written demand letter. The letter should set out the details of the claim, including the amount. Give them at least 14 days from the day of receiving your letter to settle your claim. Make sure they get an actual physical copy of the letter. This can be posted to them, or you can simply take it to them directly.

So 14 days has passed and they didn’t respond. Now you can go to the clerk of the court with documents to institute your claim. Firstly, you will need proof that you delivered the letter of demand. This can be a post office slip, for example. You will also need a contract or document that gives a bases for your claim. Your claims can’t just be based on thin air. Lastly, provide the court with all the details of the person you’re claiming from, such as name, address and phone number.

The summons

The clerk of the court will help you in drawing up the summons. Once the summons is complete a hearing will also be scheduled. You then have to serve the summons to the opposing party (defendant) in person and get them to sign it. Don’t be surprised if they are visibly upset. Remember to make copies of all the documents and keep them. Also give copies to the defendant. The original documents must be handed over to the clerk of the court before the day of the hearing. This information will be kept in the court file.

After they receive the summons, the defendant may deliver a plea (written statement) to the clerk of the court. They may also issue a counterclaim. Regardless of whether the defended institutes a plea or counterclaim, they still have to attend the hearing. On the other hand, the defendant may decide to fulfil your claim before the hearing, you should then issue a written receipt and let the clerk of the court know that you won’t be continuing with the case.

Going to the hearing

You and the defendant must appear in court in person, attorneys or lawyers are not necessary. Remember to bring along all the documents on which your claim is based, there’s no point in showing up empty-handed. If you have witnesses, make sure they also come with you to the hearing. The SCC proceedings are basic and straight-forward. As mentioned, no attorneys are involved. As the proceedings begin, answer any questions that the commissioner of the court asks you. If you want and the commissioner agrees, then you can direct questions to the defendant.

The final judgment

After the proceedings have been completed, the court will make a judgement, which is final. There may, however, be some grounds for review. If the judgement is against you, then you should settle any order for costs. Since the court judgement is final, you have to abide by it. You can’t change your mind afterwards.

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LEGALLY OWNING A FIREARM IN SOUTH AFRICA

Tue, 30 Jan 2018 08:24:00 +0000

Many people in South Africa own a firearm or intend to own one in the future. However, the right to possess a firearm is not guaranteed by law, and such a right is granted under limited circumstances under provisions of the Firearms Control Act 60 of 2000.

When is owning a firearm illegal?

Under the Firearms Control Act (Act No. 60 of 2000), a person can be guilty of a firearm offence when they:

Do not hold the necessary permits or licences for firearms in their possession.
Point a firearm, antique firearm or airgun, whether or not it is loaded or capable of being discharged, without good reason to do so.
Neglect to lock away the firearm in a prescribed safe, and/or loses the firearm due to failing to take necessary steps in ensuring the firearm’s safekeeping.
Fail to report the firearm as lost, stolen or destroyed, 24 hours after having become aware of the loss, theft or destruction of the firearm.
Amend information on the competence certificate, permit or licence.
Sell, give or supply a firearm or ammunition to a person who is not allowed to possess a firearm or ammunition.
The firearm’s serial number has been changed or removed without the Registrar’s permission.

Firearms that are prohibited under the act include:

Automatic firearms (firearms that fire continuously while the trigger is depressed, until the rounds of ammunition runs out);
Any firearm that has been altered to enable more than one shot being discharged with a single depression of the trigger; or
The firearm’s serial number has been changed or removed without the Registrar’s permission.

Registering a firearm

To register a firearm, a natural or juridical person may make an application to the Registrar of Firearms, and the natural person must possess a proficiency certificate issued after the successful completion of training by the Safety and Security Sector Education and Training Authority (SASSETA) and a competency certificate issued by SAPS.

References:

Dolley, C. (2017). Gunmen involved in over 1 000 murders the focus of SA’s ‘biggest ever’ firearms investigation. [online] News24. Available at: http://www.news24.com/SouthAfrica/News/gunmen-involved-in-over-1-000-murders-the-focus-of-sas-biggest-ever-firearms-investigation-20170731 [Accessed 31 Jul. 2017].

Firearms Control Act 60 of 2000. (2017). [ebook] Cape Town. Available at: http://saflii.org/za/legis/num_act/fca2000192.pdf [Accessed 31 Jul. 2017].

Loc.gov. (2017). Firearms-Control Legislation and Policy: South Africa | Law Library of Congress. [online] Available at: https://www.loc.gov/law/help/firearms-control/southafrica.php [Accessed 31 Jul. 2017].

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