Law for TourismStudy Unit 4
Performing Contractual Obligations
The outcomes for this learning unit are that you should be in a position to:◦ Discuss Agency◦ Discuss the nature of performance◦ Discuss contractual breach
Outcomes
The essential, residual & incidental terms of a contract
Express and implied terms
Conditions◦ The suspensive and resolutive condition
Valid, void & voidable contracts◦ Duress, Misrepresentation & undue influence
Recap of Study Unit 3
AGENCY
…When one person, with the necessary authority to do so, conducts a juristic act for and on behalf of another in such a manner that he obtains rights and obligations for the other person without him acquiring any rights or becoming accountable
Fouché (2007) pg 244
What is Agency?
One person acts on behalf of another The act is a juristic act The act is authorised The action results in a legal tie between two
people, one of which was not involved in the original action
The elements of agency
By agreement By operation of law Through estoppel By ratification
How does agency arise?
By agreement Principal gives Agent authority to act on his behalf
No formalities required Can be by way of written Power of
Attorney
Authority by Agreement
Where one party in absence of agreement has authority by law to represent another
Eg:◦Guardian representing a minor◦Curator acting for mentally insane◦Partner representing a partnership or other partners
Authority by Operation of Law
Where a person creates the false impression that another person may act on his behalf and a third party acts on the strength of that (mis)representation, the “principal” can be bound by the false impression he created.
Authority by Operation of Estoppel
Where the “principal” gives his consent or authority after the representation has taken place
Unilateral act by principal
Authority by Ratification
The legal bond will exist between the principal and the third party.
The agent does not acquire any rights or duties
The Effects of Representation
To perform in accordance with the principal’s instructions
Act honestly and in good faith Display care, skill & diligence Account to the principal
Duties of the Agent
To pay the agreed remuneration To account To reimburse the agent for all expenses
necessarily incurred by him To indemnify the agent for all losses or
liabilities incurred in performing the authorised act
Duties of the Principal
Where the agent acts on behalf of a pricipal without disclosing the fact.
Requirements◦ Agent must be authorised to act for principal◦ Agent must have intended to contract on behalf
of principal◦ Agent must fail to disclose agency at all
Third party can sue principal or agent but not both
The Doctrine of the Undisclosed Principal
Principal (not agent) liable if agent guilty of misrepresentation or duress
Agent liable if he acts outside of his authority◦ Third party may claim damages for
Breach of contract Delictual damages for misrepresentation Damages for breach of implied warranty
Agent liable for any guarantees he has given (eg: that the principal will pay etc…)
Liability of the Agent
On fulfilment of the mandate By expiry of agreed time period Supervening impossibility of performance Death of the agent or principal By agreement
Termination of Agency
PERFORMANCE OF
CONTRACTUAL
OBLIGATIONS
Form and manner of performance
Form and manner of performance should be as specified in contract between the parties unless it is clear that equivalent type of performance acceptable
If date and or time for performance has been agreed upon, debtor has until then to perform
If no agreement performance should be immediate or within reasonable time depending upon the individual circumstances
Time of performance
Performance should occur at place specified in contract
If no place specified, then debtor has to seek out the creditor to perform
Place of performance
Unless it is clear from the contract that the debtor himself must perform personally, it is acceptable for an agent of the debtor or even a third party to perform
Performance must be tendered to the creditor◦ Creditor can nominate an agent to receive
performance
Who must perform?
In legal tender Debtor must stipulate what payment is for if
multiple debts – other wise creditor may nominate
If party alleges performance, they bear onus of proof
If creditor refuses or frustrates properly tendered performance – breach by creditor
Payment & Proof of Performance
Mora debitoris Mora creditoris Positive malperformance Repudiation Prevention of performance
Breach of Contract
Mora Debitoris◦ When the debtor fails to perform at the agreed
time Two Requirements
◦ Performance must be delayed◦ Delay must be the debtors fault
Default by the debtor
Mora ex re – where a time for performance has been set and debtor fails to perform, he is automatically in mora
Mora ex persona – where no time for performance has been set & creditor then demands performance within a reasonable time & debtor fails to perform
Failure to perform on time
Mora Creditoris◦ When the Creditor causes the debtor’s
performance to be delayed
Default by the creditor
Performance must be dischargeable Debtor must tender performance Creditor must fail to co-operate & thereby
delay performance Default must be due to the fault of the
creditor
Requirements for mora creditoris
Default by Creditor Default by DebtorDebtor’s duty of care reduced
Creditor entitled to remedies for breach of contract
Debtor entitled to any counter-performance due by creditor
Consequences of default
When debtor performs contrary to the agreement◦ Debtor tenders defective or improper
performance, or;◦ Debtors does something not allowed in terms of
the agreement
Positive Malperformance
Behaviour by a party which indicates that they do not intend to honour their agreement◦ Eg, where party denies the existence of the
agreement or
Repudiation
Specific performance Damages Cancellation Penalty clause (roukoop etc)
Remedies for breach of contract