GROUP 17: CONTRACT LAW ASSIGNMENT

MODULE CODES: LB 102/ BLS 105

LECTURER: MR W MAKHUYANA
GROUP COORDINATERS

RURAMAI NYANGUWO LLBS R2422912

NETSAI CHITATU BLS R2424522

GROUP PRESENTER

PATRICK ZUMBO R981324X BLS

GROUP MEMBERS

1. TADIWANASHE NYAKAMBANGWE R2422406 LLBS

2. NYATSANGA TINOTENDA S R2422449 LLBS
3. JORDAN S GUMBO R235397V LLBS
4. SALMA OSWAD R2422515 LLBS
5. BRENTILOUS NYENGERA R2422559 LLBS
6. JOANNA T NYATANGA R2422546 LLBS
7. MITCHELLE T NYARUWANGA R2422415 LLBS
8. ZIYAMBI TADIWANASHE R2423517 BLS
9. TANASTWA E PFENDE R2422484 LLBS
10. PIUS ZHUWAU R211367U BLS
11. TUMBARE ADVANCE R122122R BLS
12. LORRAINE WALTER TOMBO R145843Y BLS
13. MERCY NYEMBA R2424501 LLBS
14. BRIAN TAFARA VIRUKAI R2419618 BLS
15. DAVID SAMKANGE R2422412 LLBS
16. ZARIMA TARIRO SHARON R2422549 LLBS
17. SACHIRARWE KELLY R2422575 LLBS
Introduction

Xolani and Stanbic Bank entered into a loan agreement in which Stanbic bank agreed to offer
Xolani $20,000 and in return Xolani would make repayment with interest on the 25 th of every
month for a period of 6 months. This constituted a contract.

A contract is a legally enforceable agreement 1 between two or more different people with legal
capacity. This essay will be better understood by initiating it with this definition to put into
perspective the question of legality. To validate an agreement as a contract, certain requirements
must be satisfied, which are articulated below.

1. Essential Elements of a Valid Contract

According to Maja, for an agreement to be deemed a contract at law there are eight essential
elements which should be satisfied, and these are: valid offer that must be accepted (acceptance),
the meeting of the mind (consensus ad idem), the intention to contract (animus contrahendi),
contractual capacity, legality, formalities, possibility to perform and certainty or clarity. The
essay will focus more on the issue of offer and acceptance, legality, breach of contract as well as
remedies.

a. Offer and Acceptance

A contract is valid if there is an offer and acceptance. An offer is simply a proposal to a contract.
Hutchison et al (2017) defines an offer as, “……a declaration of intention by one party (the
offeror) to another (the offeree), indicating the performance that he or she is prepared to make,
and the terms on which he or she will make it. 2 In a bank agreement, Stanbic Bank is the offeror
and Xolani is the offeree. Stanbic made an offer to provide a loan with specific terms of interest
rates and repayment terms and Xolani accepted the offer by agreeing to pay the interest at
prescribed dates and rates.

b. Legality of the agreement

A contract that violates the law is unsustainable as it is illegal and ordinarily unenforceable. In
the case of Schlerhant v Minister of Justice, it was held that it is a fundamental principle of our

1
I. Maja, The Law of Contract in Zimbabwe, Harare, The Maja Foundations, 2015,
2
D Hutchison et al, The Law of Contract in South Africa, Cape town, Oxford University Press, 2017
law that a thing done contrary to the direct prohibition of the law is void and of no effect. 3 Maja
argues that for an agreement to be binding, it should comply with the law. A contract is deemed
to be illegal and unenforceable when it contravenes a piece of legislation either in the form of a
statute, statutory regulation or by-law. This loan agreement (contract) between Xolani and
Stanbic Bank was legally binding as there was no statute or statutory regulation or by-law which
was contravened by the parties to the contract.

2. Breach of a Contract

Breach of contract is committed where one party who is bound to render performance at a later
or future date indicates that he/she will not render performance when it falls due (anticipatory
breach or repudiation) or fails to perform the obligation. In our case, Xolani failed to make the
final payment of the loan as agreed by the contract (loan agreement) thereby breaching the
contract.

Remedies for breach

Whenever a breach occurs, the innocent party has a right to choose and elect to either uphold the
contract or cancel it and claim appropriate remedies commensurate with his or her election. 4
Remedies available when an innocent party chooses to abide by the contract include Specific
performance, Interdict and Declaration of Right.

In this case, Stanbic bank opted for the specific performance remedy in which the aim is to
uphold the contract and obtain the performance as promised. By claiming specific performance,
the innocent party (Stanbic Bank) is asking the court to order the defaulting party (Xolani) to do
exactly what he contracted to do or to fulfill his contract obligations. For instance, in a case of
Intercontinental (Pvt) Ltd v Nestle Zimbabwe, Nestle Zimbabwe had undertaken to deliver
certain quantities of milk and failed to deliver the milk, Intercontinental then went to the court
for an application for specific performance of the delivery of the milk.

Analysis and advice to Xolani

3
196 AD 99 at 109
4
I. Maja, The Law of Contract in Zimbabwe, Harare, The Maja Foundations, 2015
Although Xolani’s nonpayment was necessitated by the supervening factor of impossibility, that
is, the immediate declared public holiday, he had an obligation to pay. Supervening impossibility
occurs when performance of contractual obligations is rendered impossible after conclusion of
the contract because of circumstances beyond human capabilities. According to the judgement of
Beitbridge-Bulawayo Railway (Pvt) Ltd v Commercial Union Insurance Company of
Zimbabwe Ltd, the general rule in our law is that, if, because of major or other supervening
physical or legal act, performance of a contract has become impossible through no fault of the
debtor, the obligations under the contract are extinguished. However, in the case of Lupu v
Lupu, the court reiterated Christie’s requirements of supervening impossibility, namely the
impossibility must be absolute, as opposed to probable. In the case of Ncube v Mpofu and
Others the court held that impossibility does not include the fact that something is uneconomical.

In the case of Mutangadura v TS Timber Building Supplies the court established that where a
party is disabled temporarily to fulfill a contractual obligation, supervening impossibility is not
enforced. In Beretta v Rhodesia Railways Ltd the court holds as follows…. 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 obligation.

In the case of Nust v Nust Academic Staff and Others it was also held that performance of
contractual obligations is not excused by temporary impossibility. Hence in our case Xolani’s
failure to pay due to supervening impossibility of a public holiday on the day of payment became
temporary. As indicated in the case of NUSTv NUST Academic Staff and Others, Xolani is not
excused to make the final payment of his installment a day before or immediately after the
holiday.

Section 15(d) of the Prescription Act [Chapter 8:11] provides that the period of prescription of a
debt shall be, except where any enactment provides otherwise, three years, in the case of any
other debt5.

Section 17(c) of the same act provides for delay in the prescription period if the debtor is outside
Zimbabwe and the period of prescription would be completed before or on, or within one year

5
Prescription Act
after, the date on which the relevant impediment has ceased to exist, the period of prescription
shall not be completed before the expiration of the period of one year which follows that date.

Section 18 of the same Act provides for Prescription interrupted by acknowledgment of liability
by stating that, the running of prescription shall be interrupted by an express or tacit
acknowledgment of liability by the debtor and if the running of prescription is interrupted,
prescription shall commence to run afresh.

It therefore means that Xolani interrupted the prescription period by acknowledging the debt on
the 3rd of November 2015 and thereby the Prescription period started on the same date. Since
Xolani was out of Zimbabwe till the 1 st of January 2019, according to section 17(C) of the
Prescription Act the prescription period shall not be completed before the expiry of a period of
one year following the date of return. The fact that the bank-initiated summons as soon as Xolani
returned before the expiry of a year means that Xolani is liable to pay the last instalment, and he
should make the payment in a bid to honuor the contract. He had an obligation to do so because
he entered into a contract whose terms he was aware of.

Conclusion

It is determined and settled that from the analysis above, the loan agreement constitutes a valid
contract and Xolani has breached the contract by not paying the last instalment. He is then
advised to make the final payment as he is the one who failed to perform his contractual
obligation.
BIBLIOGRAPHY

Beitbridge-Bulawayo Railway (Pvt) Ltd v Commercial Union Insurance Company

Hutchison. D et al, The Law of Contract in South Africa, Cape town, Oxford University Press,
2017

Intercontinental (Pvt) Ltd v Nestle Zimbabwe 1993(1) ZLR 21 (H)

Lupu v Lupu 2000(1) ZLR 120

Maja. I, The Law of Contract in Zimbabwe, Harare, The Maja Foundations, 2015

Mutangadura v TS Timber Building Supplies 2009 (2) ZLR 424 (H)

Ncube v Mpofu and Others 577

NUST v NUST Academic Staff & Ors 2006 (1) ZLR 107 (H) 378

Prescription Act [Chapter 08:11]