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UNIT 14 REPUDIATION.  Analyse the origin and nature of repudiation. The analysis should include a discussion of the historical nature of repudiation.

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Presentation on theme: "UNIT 14 REPUDIATION.  Analyse the origin and nature of repudiation. The analysis should include a discussion of the historical nature of repudiation."— Presentation transcript:

1 UNIT 14 REPUDIATION

2  Analyse the origin and nature of repudiation. The analysis should include a discussion of the historical nature of repudiation as well as the change brought about by the case of Tuckers Land and Development v Hovis and any opposition towards this “new approach” to repudiation.  List and discuss the requirements for repudiation with reference to the case of Highveld 7 Properties v Bailes 1999 (4) SA 1307 (SCA).  Distinguish between repudiation and other forms of breach of contract in general.  Discuss the specific consequences of repudiation.  Discuss cancellation on the grounds of repudiation.

3  Tuckers Land and Development v Hovis 1980 (1) SA 645 (A)   Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA)   Highveld 7 Properties v Bailes 1999 (4) SA 1307 (SCA).

4  Hutchison et al Chapter 12 pp

5  Term was known in Roman-Dutch law.  Form of breach is derived from English law.  “Any conduct of a contractant from which a reasonable person in the position of the innocent contractant would conclude that the first contractant does not intend to comply with his duties.”  Example: Contractant erroneously denies validity of the contract.  Conduct constituting repudiation may endure over a period of time.

6  Traditionally: Amounted to an “offer” by a contractant to cancel the contract, and breach is only present once the “offer” has been accepted.  If “offer” was accepted, the contract immediately came to an end.  If repudiation was ignored, the contract continued as normal, because no breach was present.  Troskie en ‘n Ander v Van der Walt.

7  Respondent had bought two properties from appellant (developer).  Contract of sale was suspensive: subject to the successful demarcation of the township.  Respondent had made certain payments already, but became aware later that the appellant had run into some difficulty proclaiming the said township.  Because of the above fact, the appellant drew up a new plan for the township.

8  The two properties purchased by the respondent did not appear on the new plan.  Respondent viewed this omission as an act of repudiation, and cancelled the contract.  Question: Would the appellant’s action have lead a reasonable person to believe that the appellant did not intend to honour the contract?

9  Court decided that the appellant had committed repudiation.  Respondent was allowed to rescind from the contract and claim compensation.  Jansen JA refrained from using the terms “offer” and “acceptance”, but said that repudiation was a choice.

10  Jansen JA’s decision was viewed as a “new approach” to repudiation.  Repudiation occurs at the place where the innocent party is notified of it and not at the place where the repudiating party is informed of the acceptance of the repudiation.  Reason: Otherwise it would come down to the principles of offer and acceptance.

11  HMBMP Properties (Pty) Ltd v King:  If acceptance is required to complete repudiation as breach of contract, prescription cannot commence before repudiation takes place.  If acceptance is not required, prescription will commence as soon as repudiation takes place.

12  Court in the abovementioned case held that repudiation becomes breach of contract only if it is accepted.  Furthermore: Prescription commences on dat of acceptance of repudiation.  Culverwell v Brown:  Repudiation merely affords the injured party an election to terminate the agreement y accepting the repudiation…

13  Traditional approach was finally rejected in favour of the new approach.  Repudiation is breach of contract because the objectionable conduct is wrongful, not because it is turned into breach of contract by offer and acceptance.  Acceptance of repudiation is not required to complete repudiation as form of breach.

14  A. Defendant must have displayed conduct indicatory of an intention of future non- compliance with the contract.  Test: Did the defendant exhibit a deliberate and unequivocal intention no longer to be bound to the contract.

15  B. Plaintiff must have accepted this conduct as breach.  Highveld 7 Properties v Bailes.  Question that had to be answered was whether a deliberate and unequivocal intention no longer to be bound constituted repudiation.

16  C. The plaintiff must have given notice to the defendant that he has accepted the conduct as breach of contract.

17  Differs from:  Negative malperformance: Delay per se does not justify a reasonable conclusion that performance is being refused or that defective performance will be rendered.

18  Positive malperformance:  Repudiation occurs before actual performance, although repudiation may well anticipate positive malperformance.

19  Sometimes: Conduct can constitute repudiation as well as positive malperformance:  Message is conveyed that the defaulter’s intention is not to comply with the particular obligation in future.

20  Prevention of performance:  Repudiation anticipates eventual performance with relative and not absolute certainty.

21  Does not advance date of performance.  Does not give rise to mora debitoris where no date for performance has been fixed.  If contractant repudiates his duty to perform, such repudiatation affects the other party’s outstanding corresponding duty to perform.

22  Creditor is only able to resile if the anticipated malperformance would justify cancellation.  If mora is thus anticipated, the creditor can resile on the ground of repudiation if the contract conteined a lex commissoria or if “time is of the essence”.


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