{"id":493,"date":"2020-12-10T12:03:26","date_gmt":"2020-12-10T10:03:26","guid":{"rendered":"http:\/\/jvdmmaja.co.za\/?p=493"},"modified":"2022-01-19T15:05:21","modified_gmt":"2022-01-19T13:05:21","slug":"reflections-on-law-december-2020","status":"publish","type":"post","link":"https:\/\/jvdmmaja.co.za\/index.php\/reflections-on-law-december-2020\/","title":{"rendered":"Reflections On Law \u2013 December 2020"},"content":{"rendered":"

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<\/span>Covid 19 Clauses \u201cForce Majeure\u201d<\/span><\/div><\/div>[vc_empty_space height=”20px”]
<\/span>Reflections On Law \u2013 December 2020<\/span><\/div><\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=”20px”][vc_column_text]The COVID-19 pandemic has had an enormous impact on society and will keep on impacting all of us until the illness has been brought under control\u2026. but what about contractual obligations in these times?<\/p>\n

What if someone is prohibited to perform in terms of a contract, due to lock down and the related regulations?<\/p>\n

It is unjust to expect someone to perform where it is impossible to do so![\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]

<\/span>Firstly, just a short overview of how the South African legal system deals with the problem of contractual \u201cimpossibility\u201d<\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]The concept \u201csupervening impossibility of performance\u201d is the common law doctrine followed in South Africa.<\/p>\n

In short this refers to the position where contractual performance was possible at the<\/u> conclusion of the contract<\/u> but afterwards becomes objectively and permanently<\/u> impossible through no fault of the parties<\/u>.<\/p>\n

Furthermore, the impossibility must have been caused by vis major<\/em> or casus fortuitus <\/em>and it must have been beyond the control of the parties.<\/p>\n

Vis major are events like natural disasters and are traditionally referred to as \u201cActs of God\u201d. It relates to an event due to superior power or force. For a natural event to be a vis major it must be of such magnitude that it could not be foreseen or guarded against.<\/p>\n

Casus fortuitus is an exceptional or extraordinary event which could not be reasonably foreseen.<\/p>\n

These terms are effectively very close in its application and essentially includes any event whether due to forces of nature or human intervention (for example Governmental regulations) which were unforeseeable and unavoidable even with reasonable care\u2026which then makes contractual performance impossible.[\/vc_column_text][vc_empty_space height=”20px”]

<\/span>This common law rule of supervening impossibility of performance is rather strict and does not excuse failure to perform in all cases. There are certain pre-requisites which should be fulfilled before this rule can be used as a defence to non- performance. <\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]These are<\/strong>:<\/p>\n

(i) performance must be objectively impossible<\/p>\n

(ii) it must be absolute;<\/p>\n

(iii) it must not be relative; meaning if the performance can be done in general (by someone else) it does not free the contractual party who cannot himself perform;<\/p>\n

(iv) it must be unavoidable be a reasonable person;<\/p>\n

(v) it must not be the fault of either party; and<\/p>\n

(vi) the mere fact that a disaster or event was foreseeable, does not mean that any party should have foreseen it or that it is avoidable by a normal reasonable person[\/vc_column_text][vc_column_text css=”.vc_custom_1607594116939{padding-top: 25px !important;padding-right: 25px !important;padding-bottom: 25px !important;padding-left: 25px !important;background-color: #6b6b6b !important;}”]Important to note:<\/u><\/strong><\/span><\/p>\n

– if the performance was at the conclusion of the contract already impossible; the contract is void as the expected performance was from the outset impossible.<\/span><\/p>\n

– as soon as a contract has become impossible in its entirety, the contract terminates and that the parties are freed from their obligations.<\/span><\/p>\n

-the strictness of this rule and the severe consequences of its strict implementation has led to the insertion of individualized \u201cforce majeure\u201d clauses into many contracts. Our law allows parties to contract freely within certain boundaries and specifically allows them to customize these types of clauses to suite the specific circumstances. This has been effectively used in the past to more fairly address possible force majeure events and to implement contractual machinery for a just cancellation or alteration of the contract.<\/span>[\/vc_column_text][vc_empty_space height=”20px”]

<\/span>Do our Government\u2019s COVID 19 rules fulfil the requirements relating to the common law rule of supervening impossibility of performance?<\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]The facts of any specific matter must be investigated in accordance with the above stated common law rule and based on that ,it could be said whether performance was impossible or not.<\/p>\n

In South Africa the Minister of Cooperative Governance and Traditional Affairs declared a national state of disaster on the 15th<\/sup> of March 2020.The regulations included various restrictions to combat the spreading of COVID 19 and\u00a0 functions on an Alert Level system. In accordance with the specific Alert Level at any present time it must be considered whether any specific action was objectively possible in that period. Should it have been impossible (in accordance with the common law rule) it could correctly be argued that performance was impossible and that such contractual party would be freed from its obligation.<\/p>\n

So yes, the COVID 19 regulations could form the base of claiming performance was impossible under common law.[\/vc_column_text][vc_empty_space height=”20px”]

<\/span>And where contractual force majeure clauses apply?<\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]Where a contractual force majeure clause is inserted in a contract (thereby overriding the common law principle) that contractual clause must be carefully examined.<\/p>\n

It must be determined whether the COVID 19 regulations (Alert Level at any time) and other facts surrounding it makes or made performance impossible measured against that contractual term.<\/p>\n

So again yes, the COVID 19 regulations could form the base of claiming force majeure in terms of such contractual clauses.[\/vc_column_text][vc_empty_space height=”20px”]

<\/span>Traditional force majeure clauses <\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]Prior to COVID 19 force majeure clauses referred to events like: earthquakes, floods, hail or any other natural disaster or Act of God; and wars, riots, bombings, rebellion etc.[\/vc_column_text][vc_empty_space height=”20px”]
<\/span>New generation-post COVID 19 force majeure clauses<\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]Examples of events included as new force majeure<\/em> events are:<\/p>\n

Lock down, State of Disaster declared by Government or pandemic.<\/p>\n

Unfortunately in some contracts these \u201cforce majeure events\u201d are simply listed as a list of trigger events, which connects to a clause which states, that should any of those events happen, then a \u201cforce majeure event\u201d has occurred. This automatically then triggers certain rights in the contract. For example, the right to exit the contract or to postpone performance!<\/p>\n

The extremely vital requirement of the \u201cforce majeure\u201d event actually making performance impossible is omitted. <\/strong><\/p>\n

Such clauses could intentionally or unintentionally leave a back door open to a party to exit the contract at any time without due reason.[\/vc_column_text][vc_empty_space height=”20px”]

<\/span>What should be done?<\/span><\/div><\/div>[vc_empty_space height=”10px”][vc_column_text]As always, the contract (the whole contract) must be carefully read.<\/p>\n

Attempts to deal with COVID 19 force majeure events must be scrutinized fully to ensure that the principle of actual impossibility is retained.<\/p>\n

 <\/p>\n

Jacques van der Merwe<\/p>\n

Jacques van der Merwe Maja Inc.<\/p>\n

9 August 2020<\/p>\n

*The views expressed here are my personal views on this theme and are not to be used\u00a0 or copied in any manner. It may not be interpreted as anything else ,as my personal opinion. It is not legal advice in any case. Should you wish to obtain specific advice on any matter this should be done by taking up personal contact with myself or any one of our attorneys.<\/em>[\/vc_column_text][vc_empty_space height=”20px”][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_empty_space height=”20px”][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=”20px”][vc_column_text]The COVID-19 pandemic has had an enormous impact on society and will keep on impacting all of us until the illness has been brought under control\u2026. but what about contractual obligations in these times? What if someone is prohibited to perform in terms of a contract, due to lock down and the related…<\/p>\n","protected":false},"author":1,"featured_media":494,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-493","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsletters","category-6","description-off"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/posts\/493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/comments?post=493"}],"version-history":[{"count":1,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/posts\/493\/revisions"}],"predecessor-version":[{"id":495,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/posts\/493\/revisions\/495"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/media\/494"}],"wp:attachment":[{"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/media?parent=493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/categories?post=493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jvdmmaja.co.za\/index.php\/wp-json\/wp\/v2\/tags?post=493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}