Possibility of

performance
Physical possibility of performance
 The general rule is that a contract is void if
at the time of its performance is impossible;
 Whether performance is possible or not must

be objectively determined, bearing in mind

the state of mind and the knowledge at the
time the contract was entered into e.g.
agreeing to take a person to Mars.
Freedom of Contract

 This essential means that one is free to enter a contract or not to

and having decided to enter the contract, to enter with whom
he/she ever wants and to decide upon which terms they want. The
general law is that while it is formal true, in practice it is very
different, if you choose to contract in most cases depends on the
strength of your bargaining power one does not have a choice
especially in cases of standard forms contracts i.e. mortgage bonds.

 If one chooses to contract with a building society to borrow money

from them there is no freedom to lent money on daily basis and they
draft standard form contracts, which the borrower may contract to
or not. It must be noted however that those standard form
contracts, have merits for bankers who has to enter into one
contract with thousands of customers will reduce their costs.
 
 Sanctity of contracts
 This doctrine merely means that where parties had freely entered into
the contract it becomes sacro-sanctity and the courts cannot make
another contract for them. The statutes such as Consumer Contracts
Act and Contractual Penalties Act, seeks to aid interpretations of such
contracts. By making exemptions clause the party concerned seeks to
exempt itself from which it should be ordinarily be liable. This is
interpretation the courts should try to uphold the doctrine of freedom
of contract. The common law position is that the court will not struck
down the exemption clause on the basis of being harsh or
unreasonable against the other party. The court also looks at the
liability to which the proferens would be subject to where there is no
exemption clause. At common law if there is no strict liability the
other party will have to prove negligence CMB v NRZ 1990(1) SA 522,
1988(1) ZLR 304
Terms of a contract
Express terms
 Express terms are terms that are incorporated into a
contract by means of articulated declarations of intent;
 A term is articulated if it is expressed in words,

whether written or oral. Effects of a signature on a

written contract (caveat subscripto).
 This was well captured in the case of: Burger v Central

African Railways 903TS, 571, 578 where the court held

that
 “It is a sound principle of law that when a man signs a

contract he is taken to be bound by the ordinary

meaning and effect of the words which appear over his
signature.”
Express terms
 This principle is referred to as caveat
subscripto (i.e. let the signatory beware i.e.
the signor should be weary).
 This principle applies to the doctrine of quasi

mutual assent but in essence a reasonable

person is entitled to assume that a person
who signs a contract intends to be bound by
it, so he is bound even if that was not his true
intention.
Implied terms
Implied terms are used to denote the
unexpressed provision of the contract which
derive from the common intention of the
parties. The terms that the parties had in
mind but did not bother to express them in
words;
 Implied Terms
Implied terms
 These are terms that are imposed into a contract from its
context. They come in three forms namely:
a. terms implied by law
 These refer to terms that are imported into a contract by

operation of either common law or statute law regardless

of the intentions of the parties e.g. a sale of land has to
be in writing i.e. The Labour Act imposes a number of
minimum conditions on an employment contract. Every
contract of sale has an implied warranties against latent
defects. Also the Higher Purchase Act requires every Hire
Purchase agreement to be reduced into writing. It also
forbids a purchaser in a Hire Purchase Agreement to
waive his rights given to him by the Hire Purchase Act.
Implied terms

 Terms Implied by Trade Usage

 These arise where a specific trade has developed its own

universally and uniformly observed rules which apply in

contracts of that trade or profession.
 The requirements for implying a contractual term by trade

usage were laid down in the case of Golden Cape Fruits Pty
Ltd v Footplate 1973(2) SA 602 as that the term should
have universal, uniform, notorious, reasonable, certainty
and should not conflict with other provisions of the
contract.
 Such a term can become a term of the contract in two ways

namely:
Implied terms
◦ if both parties are familiar with the usage they
may be taken to have tacitly agreed that the
usage should be a term of their contract
◦ if one of the parties is ignorant of the usage he
can only be bound by the alleged trade usage if it
satisfies the requirements laid down in the
Golden Cape Fruits case.
Implied terms

 
 Terms implied from facts
 Tacit terms
Implied terms
 These refer to terms that become patently clear
when regard is given to the language used in
the contract and surrounding circumstances.
 In the case of Alfred Mcalpale v Transvaal

Provincial Administration a tacit term was

defined as, “an unexpressed provision of the
contract which derives from the common
intentions of the parties as inferred by the
courts from the express terms of the contract
and surrounding circumstances.
Implied terms
 ”A question that inevitably arises from the
definition from is how are courts supposed to
infer terms implied from facts? This question is
answered in the case of Wilkins v Voges 1994(3)
SA 158 where the court adopted a four pronged
approach namely:
i. whether the proposed implied fact has been
written in the contract if not then the court will
ask itself the following question:
ii. whether the tacit term is necessary in the
business sense to give efficiency to the contract
Implied terms
iii. whether it can be competently that of that time
the contract was being negotiated someone had
said to the parties, “of course so and so will
happen.”This is called the official By-Stander
Test
iv. whether the term is capable of clear and exact
formulation. See also Reigate v Union
Manufacturing Co. 1918 (KB)(1 592, p605.
  

 It should be noted that the courts are reluctant

to imply terms into contract because:

Implied terms
◦ for instance if there is a written contract the
whole idea is to have certainty and it is unlikely
that the parties will leave certain terms
◦ if a court started to imply certain terms hence
destroy the idea of certainty
◦ the whole basis of the agreement of contract is
agreement and parties are bound because they
had agreed.
Doctrine of sanctity and freedom of contract

 The doctrine of freedom of contracts and the

doctrine of sanctity of contract dictates that
courts should not interfere with parties’ contract.
◦ courts are also reluctant because, they do not want to be
accused for making contracts for parties
◦ if implied terms became inconsistence with expressed
terms there is no rational for implication.

 Note however that, there are certain implied terms

which parties by mutual assent contract out of.
Implied terms

(a) Terms that the law imports there in without

reference to the actual intention of the parties.
e.g. Hire Purchase Act
(b) Terms implied by law which in the absence of
express agreement govern the contract e.g.
trade usage
 The law presumes that the parties expressed all
the terms of the contract and will not add new
terms unless the term is necessary in the
business sense to give efficacy to the contract.
Conditions
 A condition can be described as a contractual
term which renders the operation of and
consequences of the contract dependent on
the occurrence or non-occurence of a future
event.
 A condition can either be suspensive or

resolutive
Conditions
 In the case of a suspensive condition, the
operation and the consequences of a contract
are suspended until the uncertain future even
has occurred e.g. hire purchase sale
 In a resolutive condition the normal
consequences flow from the conclusion of the
agreement, but on the happening of an
uncertain future even those consequences are
dissolved e.g. sale of land subject to the
condition that the seller does not get a better
offer.
Time terms
 Time terms relate to the specific time when
certain conditions need to be met in the
contract. E.g. the duration of the contract
 A contract may be cancelled if time is of the

essence.
supposition
 A contractual term which renders the
existence of the contract dependent on an
event which has taken place in the past or
may take place.
 E.g. if X happens Y will happen
Warranty
 A warranty is a term where the parties intend
that contractual responsibility should be
taken and which they incorporate into the
contract as a term.
 In the event of breach the party is entitled to

contractual remedies.
modus
 A contractual term which puts a burden on
the contracting party that the contract be
performed in accordance with the terms of
the contract;
Cancellation

 A term that allows the one party to cancel the

contract summarily in the event of default.
penalty
 An addition remedy that the parties add to
the contract in the event of default which are
generally higher than the common law
remedies.
Forfeiture clause
 Where parties agree that one of them or both
of them shall lose the right to restitution in
certain circumstances.