04 Breach of Contract and Remedies

Financial Training Company

2007

Corporate and Business Law- F4 (Zimbabwe)

Casebook

Doctrine of fundamental breach

The doctrine of fundamental breach has unleashed numerous legal and judicial headaches. No

proper definition can be given to it but it has been generally regarded as a breach that goes to

the root of the contract or renders the contract inoperative. Charles Worth describes the

doctrine as a failure to undertake a certain obligation that concludes an obligation. The

fundamental breach doctrine is of English origin and our courts have �flirted� with it. Thus

Professor R.H. Christie submitted that:

�Our courts have flirted with the English doctrine of fundamental breach but the romance has not

blossomed, and it is probably even better that it should not as the doctrine is pregnant with

difficulties.�

The application of this doctrine in the Roman-Dutch Law is traced in a number of cases of which

the case of Harsales Ltd v Wallis (1956) bears testimony � where it was held that an exemption

clause will not avail a guilty party to a breach that goes to the root of the contract.

However, complexities of this doctrine, which lead our legal writers into disliking this doctrine is

the question of whether it is a rule of law or merely a rule of construction. According to

Cheshire and Fifoot, a rule of law is to be applied whether or not it defeats the intention of the

parties. A rule of construction exists to give effect to that intention. Our courts, even English

courts themselves are not consistent as to whether the doctrine is a rule of law or construction.

Thus in the case of Minor Shipping (Pty) Didcott J expressed doubt about the concept of

fundamental breach and treated it as a matter of construction.

Following the acceptance of the fundamental breach doctrine in Roman-Dutch law, and since

our common law is the Roman-Dutch law, the doctrine could be applied in Zimbabwean cases.

This is illustrated by the case of Transport Crane Hire (Pvt) Ltd v Hurbert Davies and Co (Pvt)

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Ltd (1991). The facts of the case are as follows. The Appellant purchased a Foden truck which

the respondent had assembled. After travelling 43,730 km, the steering column of the truck was

found to have been improperly assembled by the respondent, causing it to fall apart and to veer

off the road and overturn. The Appellant sued for damages based on negligence. The High

Court ruled that the respondent had acted negligently but because of the existence of an

exemption clause he was not liable.

The exemption clause read as follows:

�The company hereby guarantees within a period of nine months or 75,000 km of delivery at its

option either to repair or replace any part which may prove to be defective through material or

workmanship � Liability for direct or consequential loss of whatsoever nature or however

arising is expressly excluded.�

On Appeal, Korsah JA held that the breach of contract was a fundamental breach, and the

exemption clause could not exempt the respondent from liability for such fundamental breach.

McNally JA also held that the negligent assembly of the steering column was not an act

intended to be covered by the exemption clause, properly construed, based on a policy

approach to interpretation of such clauses in a contract.

This case clearly shows us that the fundamental breach doctrine was part of our law in

contractual cases. However, that was the law as it was, the position has now changed with the

coming of the Consumer Contracts Act [Chapter 8:03] which came into effect in 1994. It is

therefore submitted that the statute overrides the common law. Where there is a clear statute

law to regulate any matter that statutory provision should be applied. What the courts were

trying to achieve by applying the fundamental breach doctrine is now regulated by a statute. In

terms of s.5 (1)(d) of the Act read with s.4:

�A court may find a consumer contract to be unfair for the purpose of this Act � if the consumer

contract imposes obligations or liabilities which are not reasonably necessary to protect the

interests of or if the consumer contract is contrary to commonly

accepted standards of fair dealing.�

In terms of s.4(1)(c)(i) the court was empowered to cancel the whole or any part of the

consumer contract, if it imposes obligations or liabilities which are not reasonable or if the

contract is contrary to commonly accepted standards of dealing.

In so far as the Consumer Contracts Act is concerned there is nothing called �fundamental

breach� but the Act empowers the court to set aside contracts presumed to be unreasonably

unfair. It can therefore be said that the fundamental breach doctrine is no longer part of our law.

It was indeed part of our law before 1994 but now the Act takes precedence over the common

law principle.


Remedies

There are five remedies available for breach of contract or a threatened breach of contract. The

remedies include specific performance interdict, declaration of rights, cancellation and

damages. The first three may be regarded as methods of enforcement and the last two as

recompense for non performance. It should be noted that, the choice between these remedies

rests solely and primarily with the injured party, who may elect more than one of them either in

the alternative or together of course subject to the overriding principles that he must not claim

inconsistent remedies and that he must not be overcompensated.

Specific Performance

Specific performance can be defined by any of the following;

(i) An order to perform a specified act in pursuance of a contractual or any other obligation (ad

factum praestandum).

(ii) An order to perform a specified act or pay money (ad percunian solvendum).

(iii) An order to perform a specified act in pursuance of a contractual obligation.

A plaintiff is entitled to specific performance. Zimbabwean law is clear that a plaintiff is always

entitled to claim specific performance and assuming he makes out a case his claim will be

granted subject only to the court�s discretion. In the case of Farmers Co-op Society (Leg) v

Berry (1912) Innes J said,

�Prima facie every party to a binding agreement who is ready to carry out his own obligation

under it has a right to

demand from the other party so far as it is possible ...�

Specific performance will not be granted where it is impossible to comply with the order, where

it causes undue hardships on the defendant and generally in contracts for personal services like

contracts of employment or where the item that is being claimed by the plaintiff is readily

available on the market.

It is true that courts will exercise a discretion in determining whether or not decrees of specific

performance should be made. In the case of Haynes v Kingwilliamstown Municipality (1951) De

Villiers AJA said,

�The discretion which a court enjoys although it must be exercised judicially is not confined to

specific types of cases,

nor is it circumscribed by rigid rules. Each case must be judged in the light of its own

circumstances�

In the case of Shakinovsky v Lawson and Smulowitz (1904), the purchaser, Shakinovsky, sued

for the specific performance of a contract of sale of a shop and business with no alternative for


damages. It appeared from the evidence that the seller, Lawson, could not give specific

performance as the subject matter to the sale had subsequently been sold to Smulowitz, a bona

fide purchaser. The court emphasised that it will certainly not decree specific performance

where the subject matter of a contract has been disposed to a bona fide purchaser or where it is

impossible for specific performance to be effected.

Where the thing claimed can readily be bought anywhere a decree of specific performance

cannot be ordered.

De Villiers AJA said in the case of Haynes v Kingwilliamstown Municipality (1951)

�In our law a grant of specific performance does not rest upon any special jurisdiction, it is an

ordinary remedy to which, in a proper case the Plaintiff is entitled � so in contracts for the sale

of shares which are daily dealt with in the market can be obtained without difficulty specific

performance will not ordinarily be granted . . .�

It should however be noted that the decree of specific performance would not be granted where

damages would adequately compensate the injured party. Due to that possibility, the injured

party usually adds to his prayer for specific performance an alternative prayer for damages. See

the case of Woods v Walters (1921) wherein Innes C J said:

�It is common practice . . . to add to a prayer for specific performance an alternative prayer for

damages.�

Interdict

This is a remedy to prevent breach or threatened breach of contract. It takes the form of a court

prohibiting the defendant from doing whatever is specified in the order.

Declaration of Rights

This is remedy whereby parties approach the court for an order declaring the position of their

rights. This remedy was

underscored in the South African case of Government of Self-Governing Territory of KwaZulu v

Mahlanga (1994) where Eloff J pointed out that,

�. . . the court is limited to a question of right. The nature and scope of the right might be

inquired into, but in the

absence of proof of such a right, or at least a contention that there is such a right, the court has

no jurisdiction.�

It should also be borne in mind that courts are not there to rule on abstract concepts or any

dispute and as far as declaratory orders are concerned, only legally recognisable and

enforceable rights are determinable.

Cancellation

The act of cancellation, which is also sometimes described as acceptance of the repudiation,


rescission and repudiation may be performed by the innocent party himself, without the

assistance of the court. In essence, the court order would confirm the act which has already

been done. The object of cancellation unlike rescission, is intended to terminate the primary

obligations of the contract there and then but not retrospectively. Restitution by either party or

both parties should therefore be ordered only to the extent necessary to avoid unjust

enrichment. See Feinstein v Niggoli (1981) in Segal v Mazziv (1920) Watermeyer AJ said, �Now,

when an event occurs which entitles one party to a contract to refuse to carry out his part of the

contract, that party has a choice of two courses. He can elect to take advantage of the event or

he can elect not do so. He is entitled to take reasonable time to make up his mind, but once he

has made his mind, he is bound by that election . . .�

Damages

Damages for breach of certain special types of contracts, such as sales, leases and contracts of

employment are frequently assessed according to principles that have evolved to meet the

special requirements of the particular contract. Unlike damages for delict, damages for breach

of contract are not intended to recompense the innocent party for his loss, but to put him in the

position he would have been in if the contract had been properly performed. See Victoria Falls

and Transvaal Powerco Ltd v Consolidated Langlaagte Mines Ltd (1915) AD1. In this case C

ordered a supply of electric power from V on 25 February 1911. V was informed that the power

was required by 1 July 1912 and was for a new reduction plant. V replied �we have duly noted

these requirements and will make the necessary arrangements�. The power was not actually

supplied until 29 September 1912. C sued V for damages for loss in extraction, for deferred

profits, for loss on development and for loss on shaft-sinking.

In considering the principles to be applied Innes C J said;

�we must apply the general principles which govern the investigation of the most difficult

question of fact � the

assessment of compensation for breach of contract. The sufferer by such a breach should be

placed in the position he

would have occupied had the contract been performed . . . and without undue hardship to the

defaulting party. The

reinstatement cannot invariably be complete, for it would be inequitable and unfair to make the

defaulter liable for

special consequences which could not have been in his contemplation when he entered into the

contract . . .�

The law relating to awarding of damages ensures that undue hardship is not imposed on the

defaulting party by obliging the sufferer to take reasonable steps to mitigate his loss or damage.

Additionally, the defaulting party�s liability is limited in terms of the broad principles of causation

and remoteness. The latter gives rise to damages that flow naturally and generally from the kind


of breach of the contract and which the law presumes the parties contemplated as a probable

result of the breach and damages that although caused by the breach of contract, ordinarily

regarded in law as being too remote to be recoverable unless special circumstances are

established attending the conclusion of the contract. To that end two types of damages exist i.e

general damages and special damages. That contemplation is a prerequisite for special

damages is a common trite principle enunciated in various case law. See also the case of

Shartz Investments (Pty) Ltd v Kolovyrnas (1976).

As regards mitigation, the principle was exhausted in the case of Hazis v Transvaal and

Delagoa Bay Investment Ltd (1939).

Tindall JA stated:

�It was of course the duty of the company to take all reasonable steps to mitigate the loss

consequent to the breach of

the lease, but the duty did not impose on the plaintiff an obligation to take any steps which a

reasonable and prudent

man would not ordinarily take in the course of his business.�

All in all the principles have been re-stated by Corbett JA in Holmdene Brickworks (Pty) Ltd v

Roberts Construction Co. Ltd (1977) wherein it was stated that:

�the fundamental rule in regard to the award of damages for breach of contract is that the

sufferer should be placed

in a position he would have occupied had the contract been properly performed so far as that

can be done by the

payment of money and without undue hardship on the defaulting party . . .�

Glossary terms

(a) Set-Off

Where two parties to a contract are reciprocally indebted to each other, the debts are

automatically extinguished if they are of the same amount or, if one is larger than the other, the

smaller is extinguished and the larger reduced by the amount of the smaller debt. Lester

Investment (Pvt) Ltd v Narshi (1951)

(b) Novation

Novation takes place where the parties to a contract agree to replace it completely with a new

contract. A new obligation is introduced, replacing the existing obligation e.g. a contract of sale

being converted into a donation or one of exchange. Such agreement may be express or


inferred from all the circumstances of the case. The court will not lightly infer a novation. It will

do so only if the circumstances raise such a necessary inference.

(c) Locus standi in judicio

A party desiring to enter into a contract must have the capacity to sue or be sued, (locus standi

in judicio) according to the Legal Age of Majority Act (1982). Natural persons who have attained

majority status (18 years) have locus standi in judicio. Mhondoro Muchabaiwa v Katekwe (1984)

Certain categories of persons such as unassisted infants, mentally ill persons, inebriates,

insolvent persons and enemy aliens lack locus standi in judicio. On the other hand a company

that is registered in terms of the law acquires contractual capacity upon its registration (section

9 of the Companies Act).

(d) Quasi-Mutual Assent

This is also known as the Smith v Hughes doctrine and essentially the position is that in

deciding whether there was an intention to (where a dispute has arisen) the test is objective

rather than subjective. This intention is determined or inferred from the manner in which the

person concerned conducts himself. As was said by the court in Pieters and Co. v Salomon

(1991), .When a man makes an offer in plain and unambiguous language which is understood

in its ordinary sense by the person to whom it is addressed, and accepted by him bona fide in

that sense, then there is a concluded contract.

Any unexpressed reservations hidden in the mind of the promisor are in such circumstances

irrelevant. He cannot be heard to say that he meant his promise to be subject to a condition

which he omitted to mention, and of which the other party was unaware.. The rule will not be

applied where there was a mutual mistake, the parties honestly attaching different meanings to

words in a contract which are not self-explanatory.

Void and voidable contracts

A valid contract gives rise to rights, obligations and powers that are vested in one or both of the

parties to the contract. These rights always include a personal right to claim performance from

the other party. If the latter does not perform in terms of the contract, he may face a claim based

on breach of contract. The parties however must achieve consensus ad idem (meeting of

minds) before a contract can come about. Where a party understood something incorrectly it is

said that he acted as a result of mistake and in cases of mistake one cannot be said to have

consented to that which the other party has in mind. There is therefore no consensus between


the parties and likewise no contract. In cases involving duress, undue influence and

misrepresentation, consensus will have been obtained improperly and therefore it would be

defective. Such a contract would be voidable at the

instance of the weaker party.

From the foregoing it is clear that there are factors which may influence consensus between the

parties to the extent that the contract may be rendered void and voidable.

These factors which will be discussed in detail below are the following:

1. Mistake (error)

2. Misrepresentation

3. Duress

4. Undue Influence

1. Mistake

Error or mistake is one of the greatest defects that can occur in a contract, for agreements can

only be formed by the consent of the parties and there can be no consent where the parties are

in error in relation to the object of their agreement. Mistake can be described as a

misunderstanding or misapprehension by one or both of the parties regarding facts, events or

circumstances in the contract. The rule is that a mistake renders the contract void if it is:

(a) one of fact rather than law

(b) essential (material)

(c) reasonable (justus error)

This mistake (error) must concern only the facts of the contract and in particular the essential

facts of the agreement in order to have any influence on the consensus between the parties.

In Maritz v Pratley (1894) items were displayed for auction each bearing a number for

identification. Prospective purchasers were requested to inspect the goods which were to be put

up for auction. A mirror was displayed on a marble table and Pratley made a bid on the table

thinking that the mirror formed part of the table. He refused to pay separately for the mirror and

was sued by the auctioneer for the purchase price. The court ruled that there had been a

mistake (error) regarding a fact material to the contract and consequently that no consensus

had been reached and the contract was therefore void.

The fact that the error is essential and therefore that there is dissensus between the parties is

not sufficient on its own to render the contract void. In addition the mistake must be a justus

error (reasonable mistake). An error is justus when it is reasonable or excusable in all the

circumstances of a particular case. This means that the mistake (error) must not be due

to the negligence of the party who relies on mistake in order to avoid liability.

In George v Fairmead (1958). A guest at an hotel signed the register without acquainting

himself with a clause which


indemnified the hotel from claims arising from theft. George maintained that his action was a

case of mistake but the court decided that it was not a reasonable mistake and therefore had no

effect on the contract.

2. Misrepresentation

A contract can be set aside by the aggrieved party on the ground of misrepresentation where:

(a) A representation was made by one party or his agent to the other in order to induce him to

enter into the contract.

(b) The representation was material

(c) It was false in fact

(d) The other party entered into the contract on the faith of the representation.

A party cannot claim misrepresentation unless he has been induced thereby to conclude the

contract. He must therefore prove that he accepted the represented facts as being true and that

they constituted a reason for him to conclude the contract before he will be able to contest the

contract. The test which is applied is whether the innocent party would have concluded the

contract if the misrepresentation had not been made.

In Poole and McLennan v Nourse (1918) a misrepresentation was made concerning the

qualities of a farm. However before the purchaser bought the farm they were acquainted with

the true facts and they nevertheless decided to go ahead and purchase the farm. The court

decided that they had not been induced to purchase the farm by the misrepresentation and

therefore the contract could not be rescinded.

The choice between the enforcement and setting aside of the contract must be made by the

innocent party within a reasonable time after knowledge of the deception. He has a choice

between enforcing or rescinding the contract and once he has chosen, he is bound by his

choice and he loses the alternative option. (Bowditch v Peel and Magill (1921).

In our law a distinction is drawn between fraudulent/intentional, innocent and negligent

misrepresentation. The party alleging that a misrepresentation is fraudulent has to prove the

absence of honest belief by showing in the words of Lord Herschell in Derry v Peek (1889) that

a false representation has been made.

(1) knowingly or

(2) without belief in its true or

(3) recklessly careless whether it be true or false.

The person to whom the fraudulent misrepresentation was made has the choice of the following

remedies.

(a) He may ignore the contract and if sued on it use the fraud as a defence.

(b) He may rescind the contract and claim restitution � Dibley v Furter (1951)

(c) He may claim rescission of the contract, restitution and damages � Gous v De Kock (1887)

(d) He may treat the contract as binding and claim damages for any loss he has suffered.


Coomers Motor Spares (Pvt) Ltd v Albania (1979)

3. Simple/Innocent Misrepresentation

A misrepresentation made without fraud and without negligence is a simple misrepresentation.

The party making the

misrepresentation genuinely believes the facts to be true while they are actually false.

The only remedy available in circumstances involving innocent misrepresentation is rescission

and damages are not available. The remedy of rescission is available to all the three forms of

misrepresentation.

Rescission means that the parties have to be restored to the status quo ante. The innocent

party is entitled to claim back whatever he has parted with as a result of the contract but he is

also obliged to return what he has taken from the other party.

Harper v Webster (1956)

Negligent misrepresentation occurs where the maker of a misrepresentation fails to display that

degree of care which a reasonable man in his position would display. He is negligent if he

should have verified the truth of the facts before conveying them to the other contracting party.

Whilst the remedy of rescission is available for negligent misrepresentation for many years it

was a debatable point as to whether damages were available for negligent misrepresentation in

Zimbabwean law. It is now settled law that in appropriate cases damages are available for

negligent misrepresentation. Autorama (Pvt) Ltd v Farm Equipment Auctions (1984).

4. Duress

Duress may be described as a threat or intimidation which engenders fear in a person, causing

him to conclude a contract as a result of this fear. In order to succeed voiding the contract the

fear to which the threat gives rise must be reasonable fear, in other words it must be clear that a

reasonable person would also have been fearful in the given circumstances. The innocent party

must have been threatened by the other contracting party and not by an outsider.

In our law the leading case on this subject is Broodryk v Smuts (1942) where Broodryk was

threatened with internment or arrest if he were to refuse to enlist with the defence force.

The requirements for duress were set out in this case and are the following:

(a) the fear must be reasonable

(b) the fear must be caused by a threat of �considerable evil� and directed at the contracting

party or his family or property

(c) it must be a threat of immediate danger which cannot be averted

(d) the threat or intimidation must be contra bones mores (contrary to good morals)

(e) the moral pressure which is exerted must cause damage.

Duress renders the contract voidable at the option of the threatened person and he has the

choice between enforcing and setting aside the contract, as well as the right to claim damages.


5. Undue Influence

Undue influence and the consequences thereof were described by Fagan JA in Preller and

Others v Jordaan (1956).

As the influence which one person has over another which weakens the latter�s resistance and

renders his resolve pliable so that the other person may exercise his influence in an

unconscionable manner to persuade the victim to conclude a prejudicial

contract which he would normally not have concluded. Once again because the weaker party�s

consent has been improperly obtained the contract is consequently voidable at the instance of

the person who has suffered.

The requirements for undue influence are as follows:

(a) one party obtains influence over the other party

(b) this influence weakens the other party�s resistence and renders his resolve malleable

(c) the party exerting the influence uses this influence in an unscrupulous manner

(d) this influence leads to the conclusion of a contract which is to the detriment of the other

party. Patel v Grobbelaar (1974)

Void ab initio

One of the essential requirements for the validity of a contract is that performance must be

possible. As a general rule it can be stated that if performance of the envisaged contract is

impossible from the initial instance the contact will be void ab initio (invalid from the beginning).

With commercial contracts performance is impossible if the thing which has to be delivered no

longer exists or never existed; is incapable of being traded or already belonged to the purchaser

when the contract of sale was concluded.

Another form of impossibility usually involves physical impossibility for example the house which

was to be surrendered for occupation has been razed to the ground. A distinction can be drawn

between initial impossibility and supervening impossibility of performance.

Initial impossibility of performance exists where performance was impossible at the time of the

conclusion of the contact whereas supervening impossibility of performance refers to the case

where performance was possible at the inception of the contract but subsequently became

impossible.

The impossibility must be objectively beyond the control of the parties. In other words, it must

be caused by vis major (an act of God) or casus fortuitous (an inevitable accident). Between the

two phenomena we are looking at events which cannot be foreseen with reasonable foresight in


as much as they cannot be prevented with reasonable care.

In the case of Peters, Flamman and Co Ltd v Kokstad Municipality (1919), the municipality had

concluded a contract with the appellants in terms of which the latter were to supply electricity to

the town for a number of years. During the currency of the agreement, the second World War

broke out and the appellants who were German nationals were interned as enemy aliens and

their business was wound up under the relevant wartime legislation. Upon their release from

prison they were sued for breach of contract by the Municipality and the court decided that

supervening impossibility had terminated the contract.

Solomon A.C.J said:

�By the civil law a contract is void if at the time of its inception its performance is impossible. So

also where a contract has become impossible of performance after it had been entered into the

general rule was that the position is then the same as if it had been impossible from the

beginning.

The authorities are clear that if a person is prevented from performing his contract by vis major

or

casus fortuitous, under which could be included such an act of state as we are concerned with

in

this appeal, he is discharged from liability.�

The concept of supervening impossibility as we know it in Roman-Dutch law more or less

equates with the doctrine of frustration in English law. Some terse examples drawn from

English law will probably suffice. In Taylor v Caldwell (1866) the contract was deemed to have

been frustrated after a music hall which had been hired for a series of concerts was burnt down.

In Condor v Barron Knights (1966) the drummer of a pop group became ill and was forbidden by

his doctor from performing for more than four nights each week thereby frustrating his contract

which extended for seven nights. Apart from subsequent physical impossibility there may be a

change in the law after the contract was made which renders it illegal to perform the contract.

For example, an outbreak of war will frustrate a contract, as would illegally trading with the

enemy (Avery v Bowden (1855).

Equally the basis of the contract may be negated as when an agreement is dependent upon

some future event which does not take place. In Chandler v Webster (1904) the coronation of

King Edward (VII) was postponed because of the sudden illness of the king and contacts for the

hire of rooms along the route of the procession were as a result frustrated. From these cases, it

is clear what effect supervening impossibility of performance has on a contract. As soon as

performance has become impossible in its entirety the contract is terminated and the parties are

freed of their obligations. This rule applies to all contracts where the passing of the risk rule

does not form part of the contract.


In cases where the passing of the risk rule forms part of the contract, for example the contract of

sale, where the purchaser bears the risk for incidental damage, the contract is not terminated by

supervening impossibility. The purchaser is still obliged to perform although performance has

become impossible for the seller Pahad v Director of Food Supplies (1949).

However under Roman-Dutch law a contract is not terminated by supervening impossibility of

performance in the following situations:

(a) where performance has become impossible as a direct result of the debtor�s own wrongful

act. In Benjamin v Myers (1946) M let a garage to B. B undertook that at all times he would be

available for the sale of sufficient supplies of such brands of petrol and oils as he was permitted

to stock and sell on the premises in terms of the lease. On breach of this undertaking M was

entitled to cancel the lease. B ceased to hold and sell petrol and M cancelled the lease and

sued for B�s ejectment. B pleaded that he had been prevented from selling petrol by the

Controller of Petrol. M replied that this was a result of B�s wrongful act. It was held that finding

the Controller had in fact prevented B from selling petrol but had done so because B has been

found guilty of a breach of the relevant regulations, the magistrate�s judgment granting an order

of ejectment should be upheld and B�s appeal dismissed. Herbstein AJ said:

�A defendant cannot rely on a self-created impossibility . . . In my opinion the magistrate was

correct in holding that the performance of the contract was made impossible as a direct result of

the defendant�s own wrongful act.�

(b) When the debtor has taken it upon himself the risk of performance becoming impossible. In

Yodaiker v Angerhrn and Piel (1914), Y by contract agreed to supply A with a certain quantity of

coal � two trucks of forty tons each per week � for a period of twelve months. Owing to a railway

strike which might have continued for an indefinite period, Y, although called upon to fulfil the

contract, was unable to supply the coal required between 7 and 15 January 1914 and notified A

to that effect. A thereupon cancelled the contract. When Y sued for damages, the magistrate

found that A and P were justified in cancelling the contract and Y could not receive damages. Y

appealed. It was held that the appeal should be dismissed. Curlewis J said:

�The fact that the plaintiff was prevented by the strike from carrying out his obligations is no

answer

to the respondents. That is a risk which he took upon himself when he entered into the contract,

and he had to bear the burden of that risk.�

(c) When performance is more difficult or costly but not impossible to undertake (Herman v

Shapiro and Company (1926) supra).

(d) Where the impossibility is partial, in which case the obligation remains in existence in so far

as the part that is still possible is concerned (Stansfeld v Kuhn 1940).


(e) Where the debtor is only temporarily disabled from fulfilling his obligation, Baretta v

Rhodesia Railways (1914).

Tredgold J said:

�The law is clear that when a contract becomes finally and completely impossible of

performance

by reason of an act of state, it is discharged. But this does not cover the situation in which one

party is temporarily disabled from fulfilling his undertaking. Upon a temporary disability

preventing

one party from fulfilling his obligation the contract continues. If the disability persists for a period

which judged on the circumstances of the particular case renders it unreasonable that the other

party should continue bound whilst receiving no benefit from the contract such party is entitled

to

terminate the contract.�

Void for vagueness

Those agreements where the language used is so vague and uncertain that it cannot be

decided what was in fact agreed upon by the parties. South African Reserve Bank v Photocraft

(Pvt) Ltd 1969 in which a written lease agreement provided that �the lessor hereby grants to the

lessee an option to renew this lease for a further period of three years at a rental to be mutually

agreed upon under the same terms and conditions as herein contained�. P, the lessee exercised

the option but the bank which had purchased the building replied that it was unable to negotiate

in

regard to any extension of the lease as the buildings would be demolished. Held;

The clause was of no force or effect in the absence of any agreement as to rental and further

that the agreement to negotiate was so vague as to its import, significance or consequence as

to be unenforceable.

And in Baretta v Baretta (1924) a contract between the parties by which a debt was

acknowledged and certain property pledged, provided that the debtor �hereby undertakes to pay

off a substantial sum every year.�

Held; This stipulation was too vague to be enforceable in law.

Those where the agreement is not final and there are still terms to be negotiated the contents of

which cannot be determined. Schneier and London Ltd v Bennet (1927)

B was employed as manager of S and L�s timber department at a monthly salary of forty pounds

plus a small commission to be agreed at a later date between the parties. He was dismissed


before any agreement had been reached as to commission. He sued S and L for commission at

the rate of one-fifth per cent on turnover, which rate he contended was reasonable. Held;

It seems impossible to say what is the meaning of the words �small commission on the

turnover�. The agreement is too vague to enforce.

From the foregoing it is quite clear that if an agreement is perceived by the courts as too vague

it becomes void for vagueness and of no force or effect.

Contract made void due to age of consent

The Legal Age of Majority Act, 1982 conferred majority status on all Zimbabweans above the

age of eighteen years. African women who were hitherto perpetual minors acquired majority

status at the age of eighteen years. As a result all African women older than eighteen years of

age are emancipated from the authority of guardians (like their male counterparts). In Katekwe v

Muchabaiwa (1984) the Supreme Court ruled that as a result of the Legal Age of Majority Act

upon attaining eighteen years of age an African woman acquires locus standi in judicio

(contractual capacity).

In our law an agreement which is so vague that its meaning cannot be ascertained by a court is

void ab initio (from the initial instance). In Baretta v Baretta (1924) a contract between parties by

which a debt was acknowledged and certain property pledged, provided that the debtor �thereby

undertakes to pay off a substantial sum every year�. The court said that this stipulation was too

vague to be enforced in law.

On the other hand the mere fact that a contract appears to be incomplete or uncertain does not

render it void for vagueness if its meaning can in fact, be determined by a court on the evidence

before it. In Anegate v Muckulal�s Estate (1954) A was employed by his uncle who agreed to

pay him �something, sometime for his services�. The court held that the language of the contract

was not so much vague as silent and the amount of remuneration could easily be determined by

having recourse to the ordinary rules governing implication of terms into a contract. There was

therefore in this case an implied term requiring the uncle to pay a reasonable remuneration.

Undue influence

A contract can be set aside by the aggrieved party on the ground of undue influence where as

was said by Fagan J A in the case of Preller and Others v Jordaan (1956).


(a) One person obtains an influence over another which weakens the latter�s powers of

resistance and renders his will pliable.

(b) Such a person then uses his influence in an unconscionable manner to persuade the other

to agree to a prejudicial transaction which he would not have entered into with normal freedom

of will.

The burden of proof lies with the party who wants to ask the court to set aside a contract on the

ground of undue influence and he must prove the following:

(i) The other party exercised an influence over him

(ii) This influence weakened his powers of resistance and made his will pliable.

(iii) The other party exercised this influence in an unscrupulous manner in order to induce him to

consent to a transaction (a) which is to his detriment and (b) which he with normal free will,

would not have concluded.

In Patel v Grobbellaar (1974) G claimed the cancellation of a Mortgage Bond registered against

property owned by him in favour of P for $40 000·00, ostensibly the balance due in respect of

money lent by P to G. This was done under a power of attorney which P has persuaded G to

sign. At all relevant times, G believed P possessed supernatural powers and as a result of this

belief P acquired an influence over G. G would not

have signed the power of attorney with normal freedom of volition as he had not borrowed any

money from P. A lower court ordered cancellation of the contract and on appeal against that

decision by P the Appeal Court ruled that he had satisfied the onus of proof and that the appeal

should be dismissed.

Influence may be exerted by anyone but it is more likely to exist where there is a special

relationship between the parties such as that of parent and child, teacher and pupil, attorney

and client, doctor and patient.

In the case of Preller and Others v Jordaan (1956) J, an elderly farmer, claimed re-transfer of

four farms that he had donated and transferred to P, who at that time was his doctor. J alleged

that the transaction had taken place when he was old, spiritually, mentally weak and exhausted

through P.s influencing him in an improper and unlawful manner to give and transfer the farms

to P, to be administered by P for the benefit of J.s wife and farm labourers. J further argued that

he would not have done so had he not been so weak and exhausted and under P.s influence. In

the meanwhile P had in turn donated and transferred ownership of three of the farms to his son

and daughter. In a judgment which underlines the fundamental distinction between void ab initio

and voidable agreement the appeal court ruled that as the transaction which was induced by

undue influence was voidable and not void and as transfer ad been passed to the two children J

could not claim back the three farms from them. However he could still claim the one farm which

remained in the hands of the defendant (P) at the time of the action. On the other hand if the

contract had been void ab initio J would have been able to recover all the four farms.


Illegal contracts

One of the primary essentials of a valid contract is that for it to be enforceable the agreement

must be lawful. A valid contract cannot come into existence if the agreement is unlawful

because

(i) it is prohibited by statute, the prohibition referring to either the form of the contract or the

performance to be made.

(ii) it is prohibited by common law, being regarded as contrary to public policy or contra bonos

mores (contrary to accepted standards of morality).

The ex turpi causa rule (from a base cause, no action arises) is rigorously applied by our courts

and even if the parties are unaware of the illegal nature of the agreement, the courts will not

enforce it. It is often said that an agreement which violates statute law or the common law is

void ab initio (from the initial instance).

It is a well established if not universal rule that the court is bound to refuse to enforce a contract

which is illegal even though no objection to the legality of the contract is raised by the parties.

In Cape Dairy v General Livestock Auctioneers (1924), a firm of auctioneers in breach of a

Transvaal statute, sold to S certain cattle on Sunday. The firm successfully sued in the

Magistrate�s Court for the balance of the price. On appeal to the Transvaal Provincial Division,

the court of its own motion raised the point that the sale was illegal and refused to enforce it.

Innes CJ said:

�when a court is asked to enforce a contract which the law expressly forbids, it is not only

justified but bound to

take cognisance of the prohibition and the consequent illegality . . .�

In Lion Match Co Ltd v Wessels (1946) W sued for the price of wood sold and delivered by him

to LM. The requisite

governmental permit had not been obtained. The court held that the sale was illegal and

therefore unenforecable. It is clear that the video cassette was smuggled into Zimbabwe in

contravention of the Customs and Excise Act and because the agreement between Harry and

Michael is tainted by statutory illegality it is unenforceable. Equally, the agreement between the

two parties is void ab initio (from the initial instance) on the basis of common law illegality.

Certain types of contract are forbidden at common law and therefore prima facie illegal. Some

of the more common examples are the following:

(i) agreements in restraint of trade

(ii) agreements in interfering with justice


(iii) agreements to stifle the prosecution for a crime

(iv) agreements allowing the parties to avoid judicial remedies and to take the law into their own

hands

(v) agreements derogating from marriage

(vi) agreements encouraging immorality. In this case the agreement pertains to pornography

and it would be viewed with disapproval by the courts.

As a general rule, a party who has fulfilled his obligations under an unlawful agreement is not

permitted to reclaim what he has performed. In other words the consequences of an agreement

containing an illegality is that the agreement does not constitute a contract. It is void of the legal

effect intended by the parties.

(York Estates v Wareham 1949)

The maxim in pari delicto pitio est conditio

possedentis

Kerr notes that although consent of the party against whom the right is held is not necessary,

there are certain exceptions to this principle. The exception to this rule is that where there is a

conditional clause in a contract, cession will not prevail. This exception to the general principles

of cession was applied by Ludorf J in the Seegrey Bag Man case where it was held that the

presence of a conditional clause tips the scale in favour of the view that the contract is not

capable of cession.

The maxim in pari delicto pitio est conditio possedentis applies where the parties are equally in

the wrong. The position that he who is in possession will prevail would be relaxed for

considerations of justice between the parties. Chanetsa is entitled, to the relaxation of the in pari

delicto rule, to retain possession of the property in question, if justice is to prevail. This verdict

would be in reliance on the judgment of Schreiner J in the case of Petersen v Jajbhay. The

learned judge notes that, �� the lease though invalid, public policy seems to me to point prima

facie to his removal from the property otherwise in case of this � there would be unjust

enrichment ��


Latent defects

One of the primary obligations of the seller is to guarantee the purchaser against the existence

of latent defects in the merx (merchandise). The seller is obliged to deliver the thing sold to the

purchaser without defects. If the merx is latently defective, the tacit warranty against latent

defects comes into operation. This warranty is inherent to the contract of sale and in terms

thereof the seller guarantees that the thing sold is free of latent defects or other abnormalities.

The seller is therefore liable for any latent defects in the thing sold irrespective of whether he

was unaware of such defect at the time of the conclusion of the contract or not.

A latent defect is a hidden defect, one which would not be apparent upon reasonable inspection

by the average diligent person.

Before the purchaser can hold the seller liable for latent defects he will have to prove:

(i) that the defect existed at the time of conclusion of the contract

(ii) that the defect is in fact latent i.e it could not readily have been noticed

(iii) that the purchaser was unaware of the defect at the conclusion of the contract and that the

defect is material in that it renders the merx useless or less useful for the purposes for which it

was bought.

It is abundantly clear that the new Bashem hockey sticks which Sue, Jane and the other team

members bought are latently defective. When there is a latent defect in the thing sold the

purchaser has special remedies against the seller. The purchaser is entitled to the aedilitian

remedies which are the actio redhibitoria (rescission of contract) and the actio quanti minoris

(reduction of the purchase price).

Actio redhibitoria

In this case, the defect is so serious that the hockey sticks cannot be used for their normal

purpose or for the purpose for which they were bought and accordingly the buyers are entitled

to cancel the contract.

The underlying rationale is that the purchasers would not have bought the hockey sticks had

they known of the defect

beforehand. Since redhibitoria involves cancellation of the contract, the purchasers must return

the merx (hockey sticks). On the other hand, if the article has been destroyed, through no fault

of the buyer, he is of course unable to return the article, but that does not prevent the buyer

from instituting the actio redhibitoria.

In Dodd v Spitaleri (1946) the purchaser bought a horse which was suffering from a debilitating

disease. There was

conclusive veterinary evidence that the disease was incurable although the purchaser had the

horse shot, he was still able to recover his purchase price.


And in African Organic Fertilizers v Sieling (1949) the buyer sought to rescind the sale of kraal

manure which proved unfit for the purpose for which the seller knew the buyer intended it.

However the manure � having already been used could not be returned. The court held that the

purchaser could still recover his purchase price.

If the latent defect is of such a nature that it simply affects the value of the thing, the actio quanti

minoris in terms of which a reduction in price is claimed is instituted. The reduction amounts to

the difference between the purchase price and the actual value of the thing sold.

Warranty against latent defects

One of the fundamental obligations of the seller is the duty to deliver property which is free from

latent defects. This duty only relates to defects which are material and an objective test is used

to determine materiality. (Dibley v Furter 1951).

A latent defect is one which would not be apparent upon a reasonable inspection by a prudent

man even though it might not escape the notice of an expert.

In Roman�Dutch law, a buyer who inspects the property cannot be heard to complain of the

patent defects which the inspection should have revealed. A seller who sells property voetstoots

(as it stands) is protected from liability in the event that the merchandise turns out to be latently

defective. However a voetstoots clause does not protect the seller from fraudulent

nondisclosure of latent defects. Thus in the Zimbabwean case of Matambo v Chakauya (1992)

the plaintiff purchased a house voetstoots from the defendant. When the rainy season arrived it

was discovered that there were bad leaks of water through the roof. The court ruled that the

defect was a latent one and the defendant had deliberately not disclosed it at the time of the

conclusion of the agreement of sale. As a result of the fraud the court ruled that the seller was

not absolved of liability,

notwithstanding the voetstoots clause.

Where the sale is not voetstoots and the buyer discovers that the merchandise is latently

defective he is entitled to claim one of the Aedilition remedies, namely the Actio Redhibitoria

(action for rescission of the contract) and the Actio quanti minoris (reduction of purchase price).

The Actio Redhibitoria is an action for cancellation of the contract because the defect is so

serious as to make

the property unfit for the purposes intended by the contract.

The rationale underlying this remedy is that if the purchaser had known of the defect prior to the

conclusion of the agreement of sale he would not have bought the article when he did. The

defect is so fundamental that it makes the merchandise unsuitable for the purpose for which it


was bought. By instituting this action, he cancels the contract. He thus claims the return of the

purchase price, interest, repayment of all expenses with regards to the delivery and

preservation of the article and reimbursement of improvements effected by him.

The purchaser must however return the article together with anything that has accrued to it.

Before the purchaser can hold the seller liable for latent defects he will have to prove that:

(1) the defect existed at the time of the conclusion of the contract

(2) the defect is in fact latent i.e it could not readily have been noticed

(3) the purchaser was unaware of the defect at the conclusion of the contract and that

(4) the defect is material in that it renders the merx useless or less useful for the

purpose for which it was bought.

Some examples of latent defects in the merchandise are:

(a) lung sickness in cattle (Haviside v Jordan (1903)

(b) heartwater disease in sheep (Ackermann v Komfass (1904)

(c) a welded crankshaft in a motor vehicle (Goldblatt v Sweeney (1918)

(d) a leaking roof (Matambo v Chakauya (1992)

Under the Actio Redhibitoria, it is a condition precedent that the purchaser should restore the

article plus any fruits and accessories to the seller if he wants to recover the purchase price and

his interest back. The purchaser forfeits the right to the remedy of redhibitoria in the following

situations:

(a) if the article is not capable of redelivery to the seller;

(b) if the article has been materially damaged because of the purchaser�s negligence

or by a person for whom he is responsible;

(c) where the purchaser by exercising unequivocal acts of ownership over the article

has delayed to such an extent as to amount to a waiver;

(d) where the defect is of a trivial nature.

On the other hand, if the merx has perished due to the very defect complained of and in the

absence of fault on the part of the purchaser he will still be entitled to recover the purchase

price despite the fact that the merchandise would be incapable of redelivery to the seller.

In Dodd v Spitaleri (1949) the purchaser bought a horse which was suffering from a severe

bone disease. There was conclusive veterinary evidence that the disease was incurable and to

save it from any further pain the purchaser had the horse shot. The court ruled that the

purchaser could recover his purchase price despite the fact that he was unable to return the

horse.

And in the case of Marks v Laughton (1932) the buyer sought to rescind the sale of eggs which

had been condemned as unfit for human consumption and as a consequence had already been


destroyed by the local authority. The seller argued that the buyer�s inability to restore the eggs

was fatal to his right to rescind the contract.

The court said, �despite the basic prerequisite that latently defective goods must be returned,

the Actio Redhibitoria may nevertheless apply even where goods cannot be returned if this is

because they have been destroyed due to the latent defects and without fault on the part of the

purchaser . . .�

The Actio quanti minoris (action for reduction of the purchase price) is instituted when the latent

defect is not so material as to render the article completely useless. Alternatively, the purchaser

might opt not to rescind the contract and have the purchase price reduced in circumstances in

which if he had so desired he could have cancelled the agreement on account of the gravity or

seriousness of the defect. Under Actio quanti minoris, the defect however affects the value of

the article. The purchaser keeps the article but claims a price reduction which is the difference

between the purchase price and the actual value of the article.

Aedilitian remedies are available to the seller only in cases where the thing sold has latent

defects. Depending on the

circumstances they offer him only cancellations or a price reduction. However ordinary

damages cannot be claimed in the case of latent defects except in three cases (and where

ordinary damages are awarded for latent defects, they are given in addition to the Aedilitian

remedies) which are as follows:

(a) where the seller acted fraudulently by not disclosing to the purchaser the existence of a

latent defect of which he was aware. This is not simply withholding information, the intention of

the seller is to defraud the purchaser.

(b) where the seller is the manufacturer of the thing sold or a dealer who publicises his expert

knowledge and skills regarding the article he may also be held liable ex empto for damages.

In Odendaal v Bethlehem Romery (1954) the purchaser bought livestock feed form a dealer.

The dealer dealt almost exclusively in stock feeds. The feed was infested with a particular germ,

but both parties were unaware of this. After the purchaser had fed the feed to his stock, thirteen

head of cattle died. The seller was held liable for damages because he was a dealer with expert

knowledge regarding that which was sold.

(c) where the seller gives an express warranty against latent defects, he will be liable for

damages if there should be a defect in the thing purchased.

Failure to deliver in a sale agreement

The general principle is that a seller who fails to deliver may be ordered to do so by an order of

specific performance. Damages caused by the delay in delivery may be awarded in addition,


Rhodesia Cold Storage and Trading Company Ltd v Liquidatior Beira Cold Storage Ltd 1905. If

the buyer claims damages instead of or as an alternative to specific performance, the normal

measure of damages is the difference between the price and the value (that is, the prevailing

market price) on the date delivery ought to have been made, Novik v Benjamin 1972.

Where there is no available market, the damages must be calculated from the best evidence

available. The buyer�s loss of profit resulting from non-delivery of the property may be recovered

if the seller knew at the time of contracting that the buyer required the property for resale or for

use in manufacturing for sale, Plywood Products Ltd v Tropical (Commercial and Industrial) Ltd

1955. It should be noted that when the scope of an exemption clause is in issue, neither an

exemption from liability for representations nor for warranties will relieve the seller from liability

for delivering property of a different kind from that promised, Melfort Motors (Pvt) Ltd v Finance

Corp of Rhodesia Ltd 1975.

Damages

The problem area predominantly revolves around the issue of damages for breach of contract

and the approach which the Supreme Court is likely to adopt.

The general approach of our courts is that the injured party is entitled to be put in the position

he would have been in had the contract been properly performed, so far as this can be done by

the payment of money and without undue hardship to the defaulting party. In order to ensure

simple justice between man and man, the defaulting party�s liability is limited in terms of the

broad principle of causation and remoteness to:

(a) those damages that flow naturally and generally from the kind of breach of contract in

question and which the law

presumes the parties contemplated as a probable result of the breach and

(b) those damages that although caused by the breach of contact are ordinarily regarded in law

as being too remote to be recoverable unless, in the special circumstances attending the

conclusion of the contract, the parties actually or

presumptively contemplated that they would probably result from its breach.

(Shatz Investments v Kalovyrnas 1976)

As was noted by the court in the famous English case of Hadley v Baxendale,

�where two parties have made a contract which one of them has broken, the damages which the

other party ought

to receive in respect of such breach of contract should be such as may fairly and reasonably be

considered either

arising naturally or such as may reasonably be supposed to have been in the contemplation of


both parties at the

time they made the contract . . .�

There are a number of cases drawn from the Roman-Dutch law jurisdictions which define the

concept of causation and

remoteness of damages in breach of contract situations in a very neat way.

In Holmdene Brickworks v Roberts Construction Co 1977) R bought bricks from H for the

erection of factory building.

After R had used all the bricks, it discovered that a substantial number were defective, in as

much as they manifested

�efflorescence� which made them crumble and decompose. To remedy the position R

demolished the walls containing

defective bricks and rebuilt them with bricks obtained from another source. The cost of doing so

amounted to a sum of R27 000 which R now claimed from H on the basis that it represented

consequential loss suffered by reason of a latent defect in the goods sold.The Transvaal

Provincial Division gave judgment for R and H appealed.

Held;

H�s appeal should be dismissed. Corbett JA said: �It seems to me that respondent�s loss was

one flowing naturally and generally from appellant�s breach of contract and one which the law

should presume to have been contemplated by the

parties as a probable result of the breach. It, therefore, falls fairly and squarely within the

category of loss for which

general damages are available. Also in the case of Victoria Falls and Transvaal Power

Company v Consolidated Mines (1915) the court ruled that the sufferer by such a breach should

be placed in the position he would have occupied had the contract been performed,

so far as that can be done by the payment of money and without undue hardship to the

defaulting party. The

reinstatement cannot invariably be complete, for it would be inequitable and unfair to make the

defaulter liable for

special consequences which could not have been in his contemplation when he entered into the

contract.

In light of cases applicable to our jurisdiction it would appear that the High Court�s approach in

awarding

$20 000 000.00 damages as per item (i) and declining to award $5 000 000.00 damages as per

item (ii) is correct.

Damages under item (i) flow naturally from the breach and should be deemed to have been

within the contemplation

of the parties whereas those falling under (ii) are remote. Likewise, the Supreme Court would be


expected to adopt the same approach.

Damages for sentimental loss in breach of contract

The general approach of our courts in the case of breach of contract is that we are not

concerned with the mental or bodily sufferings of the creditor. The action for damages in such a

case is intended to place the creditor as much as possible in the same position as regards his

property as he would have been in if the contract had been performed. Hence the damages

must have been in satisfaction of some pecuniary loss.

This principle has been restated in a number of cases; Corbett J A in Holmdene Brickworks v

Roberts Construction (1977) made the following observation,

�The fundamental rule in regard to the award of damages for breach of contract is that the

sufferer should

be placed in the position he would have occupied had the contract been properly performed, so

far as

this can be done by the payment of money and without undue hardship to the defaulting party . .

.�

To ensure that undue hardship is not imposed on the defaulting party the sufferer is obliged to

take reasonable steps to mitigate his loss or damage. In addition the defaulting party�s liability is

limited in terms of the broad principle of contractual causation and remoteness of damages to:


question and which the law presumes the parties contemplated as a probable result of the

breach;

(b) those damages that although caused by breach of contract are ordinarily regarded in law as

being too remote to be recoverable

unless in the special circumstances attending the conclusion of the contract the parties actually

or presumptively

contemplated that they would probably result from its breach Shartz Investments Ltd v

Kalovyrnas (1976).

The general approach of our courts would appear to be that in an ordinary commercial contract

damages may not be claimed for sentimental loss or injured feelings unlike in an action founded

in the law of delict or tort.

In Jockie v Meyer (1945) J, a Chinese and second officer on a British ship having reserved a

room at M�s hotel in Port Elizabeth was allotted the key to room 309 and took occupation. A few

minutes later M sent for J, told him that there was a mistake as to the room number and asked

him to return the key. J did so and was then told that the hotel was full and there was no room


for him. The real reason for the breach of contract was J�s race. J sued M in the Magistrates

court for two hundred pounds damages and was awarded fifty pounds damages, forty pounds of

which was in respect of the humiliation and annoyance felt by J. The appeal court set aside the

portion of the damages relating to J�s humiliation and annoyance.

Tindall, Judge of Appeal said:-

�I have come to the conclusion that the ..... Magistrate was not entitled to award damages for

the injury

to the Plaintiff�s feelings which he suffered as a result of the refusal of accommodation by the

defendant�

As an exception to the general rule it can be said that where the pleasure to be obtained from

the proper performance is an important aspect of the contract, as it is when a travel agent

makes specific representations about the facilities and entertainment available at a hotel, or a

photographer undertakes to take wedding photographs the courts may take mental distress into

account in awarding damages. The argument then would be that emotional and mental

satisfaction is an important plank of the contract.

In Jarvis v Swans Tours Ltd (1973) J, a solicitor aged about 35 years booked a 15 day

Christmas winter sports holiday. He did so on the faith of S�s sales brochure which described

the holiday in very attractive terms. In the event the holiday was a great disappointment and

most of the things that had been advertised in the brochure like a house party, skiing etc were

not provided.

Allowing damages for sentimental loss Lord Denning MR said:

�In a proper case damages for mental distress can be recovered in contract . . . One such case

is for a

holiday or any other contract to provide entertainment and enjoyment. If the contracting party

breaks his

contract, damages can be given for the disappointment, the distress, the upset and the

frustration

caused by the breach.�

In Diesen v Samson (1971), Mrs D engaged S, a professional photographer to take

photographs for her wedding. She paid a deposit for which she was given a receipt. S failed in

breach of his contract to appear at the wedding or at the reception. As a result Mrs D had no

photographs of her wedding and claimed damages for the resulting injury to her feelings. The

court ruled that

damages could competently be awarded.

�If the contract is not primarily a commercial one in the sense that it affects not the plaintiff�s

business

interests but his personal, social and family interests, the door is not closed to awarding

damages for


mental suffering should the court think that in the particular circumstances the parties to the

contract

had such damages in their contemplation . . .�

In summation, it can be noted that although the general rule is that our courts will award

damages for patrimonial or material loss in breach of contract cases, in appropriate and limited

cases an exception is made to award damages for sentimental loss as well.

Specific and general damages

It is an established principle of contract that, where there is a material breach, the injured party

may claim from the other party damages such as he can prove he has suffered as a result of

the breach. The injured party is entitled to be put in the hypothetical position he would have

been in had the contract been properly performed, in so far as that can be done by the payment

of money and without undue hardship to the other party. To ensure the other party does not

suffer undue hardship, the injured party must take reasonable steps to mitigate his loss. In

addition, in assessing damages, the court only awards such damages as naturally flow from the

breach (general damages) or as may reasonably be supposed to have been in the

contemplation of the contracting parties as likely to result from the breach (special damages).

These principles have been re-stated by Corbett JA in Holmdence Brickworks (Pvt) Ltd v

Roberts Construction Co Ltd (1977) where he aptly underscores the following �the fundamental

role in regard to the award of damages for breach of contract is that the victim should be placed

in the position he would have occupied had the contract been properly performed, so far as this

can be done by payment of money and without undue hardship on the defaulting party�.

Be that as it may, the approach to the court in this case will depend on whether or not there was

a breach by Virgin Airlines. It is contended inter alia on behalf of Virgin Airlines that they are

exempted from liability through the operation of the alleged exemption clause in the contract.

The law relating to exemption clauses is very trite. At common law, for a party to be exempted

the exemption clause must be reasonable and it must not go to the root of the contract as was

enunciated in the celebrated case of Hubert Davies v Crane Hire (1995). This position was

codified and classified in the Consumer Contracts Protection Act. Essentially the piece of

legislation seeks to protect vulnerable consumers from unreasonable and vague contractual

provisions to the extent that the court was given the power to strike down any unfair clauses in

consumer contracts. It is likely that in view of this piece of legislation,

the High Court of Zimbabwe is likely to strike out the exemption clause in question and as such,

the question which shall remain unanswered is that of damages.


In Victoria Falls and Transvaal Power Company Ltd v Consolidated Langlaagte (1915) the court

had occasion to explain the issue of damages where it stated that �the defaulting party�s liability

is limited to the broad principle of causation and remoteness.� This essentially points to those

damages that flow naturally and generally from the kind of breach of contract in question and

which the law presumes the parties contemplated as a probable result of the breach and those

damages that, although caused by the breach of contract are ordinarily regarded in law as being

too remote to be recoverable. This is so unless in the special circumstances attending the

conclusion of the contract, the parties actually or presumptively contemplated that they would

probably result from its breach.�

As regards claims (a) to (c) clearly these are general damages. However, on claim (a), the court

is likely to take into consideration the aspect of supervening impossibility in the form of vis major

caused by adverse weather conditions. At most the court is likely to grant damages for one

night, as the damages for the other night were due to no-one�s fault but an act of God. As

regards special damages, contemplation is pre-requisite if one is to succeed. The South African

position was put forward in Lavery and Co Ltd v Jungheinrich (1931) and upheld in Shatz

Investments (Pty) Ltd v Kalovyrnas (1976) that the defaulting party�s knowledge of special facts

must have been imparted to him in circumstances amounting to a tacit contract that he would

undertake liability for special damages should a breach occur. The Zimbabwean position here,

however, remains unclear.

Specific performance of the contract

An offer is an unconditional declaration by the offeror of his intention to conclude a contract

while all the terms on which he is prepared to contract are set out in this declaration. The

primary requirements of a valid offer are as follows:

(a) the offer must be clear and unambiguous. If any of the material terms of the offer are vague

and obscure or ambiguous, the offeree will not be able to form an idea of what the offeror has in

mind.

(b) the offer must be complete

(c) the offer must be communicated to the offeree. An offer is usually addressed to a specific

person but it can be made to the world at large (the general public). If an offer is addressed to a

specific person it cannot be accepted by a third party. (Baker v Crowrie (1962)

(d) The offer must be made with the intention that is shall serve as an offer so that it may be

accepted and result in a contract coming into existence.


In Hyde v Wrench (1840) the defendant offered to sell land to the plaintiff for £1000·00. Plaintiff

then agreed to pay £950·00. The defendant rejected this. Plaintiff then agreed to pay £1000·00

after all. But by now the defendant no longer wished to sell. The plaintiff then sued for breach of

contract and the court ruled that the plaintiff had made a counter offer which �rejected the offer

previously made by the defendant�. Thus he could not afterwards �revive the proposal of the

defendant by tendering an acceptance of it� and therefore there existed no obligation of any sort

between the parties.

The fundamental principle here is that a counter offer revokes the original offer to which the

counter offeror may therefore not return unless the original offeror agrees. Also in the case of

Watermeyer v Murray (1911) Murray sought to buy Watermeyer�s farm for £1700·00.

Watermeyer offered to sell at that price provided Murray paid all expenses plus £1000

immediately the agreement was signed. Murray agreed, but then through his attorneys

unilaterally drew up and signed an agreement stipulating that the £1000·00 was to be paid only

after the current lease on the farm had expired. Watermeyer rejected this new arrangement,

Murray then tried to revert to the original offer but Watermeyer now refused to sell. Murray sued

for specific performance or alternatively £1000 in damages for breach of contract.

The court ruled that there was no contract and therefore no breach, because as soon as the

defendant�s offer to sell on certain terms was rejected by the plaintiff making a counter offer to

buy on different terms, it follows that the defendant�s offer was no longer open for acceptance.

The principle underpinned by the two cases is that where an offer has been revoked by a

counter-offer and the original offerer has in turn rejected such counter offer, he cannot be bound

by any subsequent acceptance of his original offer unless he so wishes.

Specific performance as a remedy Specific performance is a remedy aimed at the fulfilment of the contract because when it is

claimed by the innocent party, he is trying to achieve the result envisaged at the conclusion of

the contract by the parties. In general, the injured party has a right to claim specific performance

(an order compelling a party to a contract who is in breach, to perform his obligation in the

manner required by the terms of the contract) if ready to carry out his obligations under it.

However the courts will exercise a discretion in determining whether or not decrees of specific

performance should be made. In Farmers� Co-op Society v Berry (1921) B who was a member

of F and as such obliged to send in his whole crop to F, notified it that he had a crop of 1200

bags of mealies but later refused to deliver any to F. F then sued B asking for specific

performance of a contract to deliver 1200 bags and in the alternative, damages and addressing

the question of specific performance the court ruled that:

�Prima facie every party to a binding agreement who is ready to carry out his own obligation


under it has a right

to demand from the other party, so far as it is possible a performance of his undertaking in

terms of the contract.

It is true that the courts will exercise a discretion in determining whether or not decrees of

specific performance

should be made.�

The discretion which the court enjoys in awarding (or declining to award) must be exercised

judicially and is not confined to specific types of cases, nor is it circumscribed by rigid rules.

Each case must be judged in light of its own specific and peculiar circumstances. The injured

party usually adds to his prayer for specific performance an alternative prayer for damages. As

was noted by the court in Woods v Walters (1921)

�It is common practice to add to a prayer for specific performance an alternative prayer for

damages . . .�

Examples of the grounds on which the courts have exercised their discretion in refusing to order

specific performance although performance was not impossible, may be mentioned

(a) where damages would adequately compensate the injured party, for example, if the subject

matter of the contract can easily be bought on the open market as is the case with items like

cars, bicycles, shares etc.

(b) where it is impossible to effect

In Shakinovsky v Lawson and Smulowitz (1904) where the plaintiff purchaser sued for the

specific performance of a contract of sale of a shop and business with no alternative claim for

damages. L could not give specific performance as he had subsequently sold the same

business to Smulowitz who had no notice of the previous sale. The court said that it was not

practicable to award specific performance and the purchaser had to contend with damages.

�Now a plaintiff has always the right to claim specific performance of a contract which the

defendant has refused

to carry out but it is in the discretion of the court either to grant such an order or not. It will

certainly not decree

specific performance where the subject matter of a contract has been disposed of to a bona fide

purchaser or

where it is impossible for specific performance to be effected, in such cases it will allow an

alternative of damages.�

(c) where the subject matter of the contract involves the rendering of services of a personal

nature

Since it is undesirable and indeed in some cases impossible to compel an unwilling party to

maintain continuous personal relations with another it is well established that a contract for

personal services is not specifically enforceable at the suit of either party.

�The courts�, said Jessel, MR �have never dreamt of enforcing agreements strictly personal in


their nature, whether they are agreements of hiring and service, being the common relationship

of master and servant, or whether they are agreements for the purpose of pleasure or for the

purpose of scientific pursuits, or for the purpose of charity or philanthropy.� (Rigby v Cannol

1880).

(d) where the order would work great hardship on the defaulting party or the public at large

If the effect of a decree of specific performance is to cause undue and great hardship to the

defendant and members of the public alike the courts are unlikely to award it. In Haynes v

Kingwilliamstown Municipality (1951) the defendant contracted to supply the plaintiff with 250

000 gallons of water per day for a number of years. After some time the defendant was unable

to honour the agreement because of a crippling drought. An action for specific performance by

the plaintiff was dismissed by the court because full compliance with the agreement would have

resulted in a positive danger to the health of the Municipality�s citizens. In breach of contract

cases it is quite clear that the courts award specific performance on a discretionary basis rather

than as a matter of course.

Undue hardship The general approach of the Zimbabwean courts in the case of breach of contract is that they

are not concerned with the mental or bodily sufferings of the creditor. The action for damages

in such a case is intended to place the creditor as much as possible in the same position as

regards his property as he would have been in if the contract had been performed. Hence the

damages must have been in satisfaction of some pecuniary loss.

This principle has been restated in a number of cases. Corbett J A in Holmdene Brickworks v

Roberts Construction (1977) made the following observation, �The fundamental rule in regard to

the award of damages of breach of contract is that the sufferer should be placed in the position

he would have occupied had the contract been properly performed, so far as this can be done

by the payment of money and without undue hardship to the defaulting party . . .�

To ensure that undue hardship is not imposed on the defaulting party the sufferer is obliged to

make reasonable steps to mitigate his loss or damage. In addition the defaulting party�s liability

is limited in terms of the broad principle of contractual causation and remoteness of damages

to:


question and which the law presumes

the parties contemplated as a probable result of the breach;


(b) those damages that although caused by breach of contract are ordinarily regarded in law as

being too remote to be recoverable unless in the special circumstances attending the

conclusion of the contract the parties actually or presumptively contemplated that they would

probably result from its breach Shartz Investments Ltd v Kalovyrnas (1976).

The general approach of our courts would appear to be that in an ordinary commercial contract

damages may not be claimed for sentimental loss or injured feelings unlike in action founded in

the law of delict or tort.

In Jockie v Meyer (1945) J, a Chinese and second officer on a British ship having reserved a

room at M�s hotel in Port Elizabeth was allotted the key to room 309 and took occupation. A few

minutes later M sent for J, told him that there was a mistake as to the room number and asked

him to return the key. J did so and was then told that the hotel was full and there was no room

for him. The real reason for the breach of contract was J�s race. J sued M in the Magistrates

Court for £200 damages and was awarded £50 damages £40 of which was in respect of the

humiliation and annoyance felt by J. The appeal court set aside the portion of the damages

relating to J�s humiliation and annoyance.

Tindall, Judge of Appeal said:

�I have come to the conclusion that the . . . Magistrate was not entitled to award damages for

the injury to the Plaintiff�s feelings which he suffered as a result of the refusal of accommodation

by the defendant�

As an exception to the general rule it can be said that where the pleasure to be obtained from

the proper performance is an important aspect of the contract, as it is when a travel agent

makes specific representations about the facilities and entertainment available at a hotel, or a

photographer undertakes to take wedding photographs the courts may take mental distress into

account in awarding damages. The argument then would be that emotional and mental

satisfaction is an important plank of the contract.

In Jarvis v Swans Tours Ltd (1973) J, a solicitor aged about 35 years booked a 15 day

Christmas winter sports holiday. He did soon the faith of S�s sales brochure, which described

the holiday in very attractive terms. In the event the holiday was a great disappointment and

most of the things that had been advertised in the brochure like a house party, skiing etc were

not provided.

Allowing damages for sentimental loss Lord Denning MR said:

�In a proper case damages for mental distress can be recovered in contract . . . One such case

is for a holiday or any other contract to provide entertainment and enjoyment. If the contracting

party breaks his contract, damages can be given for the disappointment, the distress, the upset


and the frustration caused by the breach.�

In Diesen v Samson (1971), Mrs D engaged S, a professional photographer to take

photographs for her wedding. She paid a deposit for which she was given a receipt. S failed in

breach of his contract to appear at the wedding or at the reception. As a result Mrs D had no

photographs of her wedding and claimed damages for the resulting injury to her feelings. The

court ruled that damages could competently be awarded.

�if a contract is not primarily a commercial one in the sense that it affects not the plaintiff�s

business interests but his personal, social and family interests, the door is not closed to

awarding damages for mental suffering should the court think that in the particular

circumstances the parties to the contract had such damages in their contemplation . . .�

In summation, it can be noted that although the general rule is that our courts will award

damages for patrimonial or material loss in breach of contract cases, in appropriate and limited

cases an exception is made to award damages for sentimental loss as well.

Supervening impossibility

Performance of a contract is the most common method of discharge of contracts. Cancellation

resulting from repudiation or breach is probably the next most common. It was said in Strachan

v Lloyd Levy (1923) that because contracts are made by agreement so may they be unmade by

agreement but they cannot be unilaterally varied or discharged. Thus variation and discharge of

contracts are all as a result of the act of the parties to the contract.

However, variation or discharge of contracts can also take place as a result of the operation of

law. This will happen if it is interrupted by irresistible force of inevitable accident of a contract

requiring continuity of performance. However, if this happens in a contract of employment, it will

not be treated as a supervening impossibility because it would obviously be unfair to treat the

contract as discharged when the interruption might turn out to be of short duration.

Beretta v Rhodesia Railways (Ltd) 1947 shows how in such a case the contract is not

discharged by operation of law but may be cancelled by the party to whom the performance is

due if the interruption continues for an unreasonably long time.

Irresistible force includes legislation or act of state making performance illegal, such as a

declaration of war ; but in William Maine & Son (Pvt) Ltd v Rhodesia Railways 1976 a ministerial


directive given without statutory authority was held not to be irresistible force, so obedience to it

did not excuse non-performance. It will not be a case of supervening impossibility if the parties

did foresee and made provision for or accepted the risk of the very event that has happened.

04 Breach of Contract and Remedies

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