3. BREACH OF CONTRACT
As you know, breach occurs when one party to a contract fails to perform their obligations as
required in terms of the contract.
In order to easily understand this section, it will help if we clarify some definitions:
- Debtor = in this context means the performance debtor i.e. the person who must
perform.
- Creditor = in this context means the performance creditor i.e. the person to whom
performance is owed.
Example:
A sells a second hand TV to B.
A must deliver the TV to B.
B must pay A.
A is the performance debtor re delivery of the TV and he is the performance creditor re
payment.
B is the performance debtor re payment and he is the performance creditor re delivery
of the TV.
So the point is, don’t just think of the words debtor and creditor in a money context.
TYPES OF BREACH
There are different types of breach. Some may overlap, law is not a perfect science.
(1) MORA DEBITORIS – LATE PERFORMANCE BY THE DEBTOR
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CML1004S_Business Law 1
Semester 2, 2022
, This means just what it says i.e. the debtor is in breach because he is late in
performing. This type of breach can occur in one of two situations:
a) A time for performance is fixed in the contract
E.g. The seller will deliver the car to the buyer on 5 June.
The seller will automatically be in breach if there is no delivery by midnight on the
due date, the 5 June. The type of breach is mora debitoris.
OR
b) No time for performance has been fixed in the contract
Examples:
1. The builder will build an extra bathroom at 2 Apple Street.
2. The seller will deliver the car.
3. The seller will deliver the car within a reasonable time.
4. The builder will complete the work as soon as possible.
In ALL of the above 4 situations, if the debtor has not performed after a reasonable
time, then the creditor can place him in mora (breach) by demanding performance
within a reasonable time.
This demand/ notice can be verbal or written. What is a reasonable amount of time
depends on the facts.
If the debtor still does not perform by the date in the demand then he will be in mora
(i.e. in breach – mora debitoris).
Example:
A contract of sale entered into between Jane (as seller) and Lindani (as buyer) on 5
April 2021, provides that the Jane will sell and deliver her car to Lindani. Both parties
live in Cape Town and the car is in Cape Town.
No time for delivery is specified in the contract.
By 1 June Jane has still not delivered the car, and Lindani has paid Jane for it. I
think that almost two months to deliver a car is more than reasonable.
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CML1004S_Business Law 1
Semester 2, 2022
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