TOOLS OF THE TRADE – JUNE 2021
‘UNCONSCIONABILITY’: TO WHAT EXTENT DOES IT, OR CAN IT, CONSTITUTE A DEFENCE IN SOUTH AFRICAN LAW
TO A PARTY’S ABILITY TO MAKE A CALL FOR PAYMENT
UNDER AN ON-DEMAND GUARANTEE?
On-demand performance bonds are instruments commonly used in construction projects to provide the beneficiary – usually the employer – with a form of security that is promptly realisable upon the other party’s – usually the contractor’s – non-performance of its obligations. An on-demand guarantee establishes a contractual obligation on the part of the guarantor – usually a recognised financial institution, like a bank or insurer – to pay the beneficiary on the occurrence of a specified event. As such an on-demand guarantee is independent of the underlying contract between the employer (or beneficiary) and the contractor which gave rise to the guarantee.
In Lombard Insurance Co. Limited v Landmark Holdings (Pty) Limited 2010 (2) SA 86 (SCA) (Lombard), the Supreme Court of Appeal (SCA) described an on-demand bond as being:[1]
‘… not unlike irrevocable letters of credit issued by banks and used in international trade, the essential feature of which is the establishment of a contractual obligation on the part of a bank to pay the beneficiary (seller). This obligation is wholly independent of the underlying contract … The bank undertakes to pay provided only that the conditions specified in the credit are met. The only basis upon which the bank can escape liability is proof of fraud on the part of the beneficiary.’
(Emphasis added).
Fraud is defined as the unlawful and intentional making of a misrepresentation that causes actual prejudice or is potentially prejudicial to another. In State Bank of India and another v Denel Soc Limited [2015] 2 All SA 152 (SCA) (State Bank India), the SCA stated that the fraud exception is:[2]
‘The only exception to the rule that the guarantor is bound to pay without demur, is where fraud on the part of the beneficiary has been established. The party alleging fraud has to establish it clearly on a balance of probabilities.’
(Emphasis added).
Fraud by the beneficiary is an internationally recognised exception, and the only allowable exception to the independence principle in demand guarantees according to South African law. It offers a valid defence to guarantors, as well as to applicants for injunctive relief against abusive calls on the guarantees.
Contrary to the South African law position, the law in Singapore recognises two exceptions to a party’s ability to call on-demand guarantees: fraud and unconscionability.
Singapore law
Unconscionability is said to contain elements of ‘abuse, unfairness and dishonesty.’[3] Lee argues that a possible ‘unconscionable exception’ is derived from general notions of equity, fairness, good faith and material justice.[4]
Regarding its relationship to fraud, Wong[5] contends that ‘[w]hile fraud will almost always constitute a component of unconscionable conduct, not every unconscionable conduct will necessarily amount to fraud.’ The essential question is therefore whether unconscionability constitutes a defence, or basis for an interdict, which is separate and distinct from fraud.[6]
Put differently, can conduct by the beneficiary that oversteps the accepted limits of what is expected of a reasonable party in a business transaction, but does not meet the requirements of the fraud defence, conveniently be termed ‘unconscionable’ and as such provide an exception to the independence principle?[7]
The case of Tactic Engineering Pte Ltd v Sato Kogyo (S) Pte Ltd [2017] SGHC 103 (Tactic Engineering) provides helpful insight into the court’s application of the main principles of unconscionability. The respondent, Sato Kogyo, was engaged by the Singapore Land Transport Authority as main contractor to construct the new Mattar Station and its associated tunnels as part of a railway extension involving the Downtown Line 3. The appellant, Tactic, was engaged by Sato Kogyo as a subcontractor. Tactic began to suffer financial difficulties and, in turn, faced difficulties in completing its outstanding works. To ease Tactic’s cash flow, Sato Kogyo agreed to release retention monies early in exchange for an on-demand bond of the same value, approximately S$1.2 million. The salient parts thereof provided as follows:
| ‘1 | In consideration of you releasing the retention money to the Subcontractor we hereby irrevocably and unconditionally undertake, covenant and firmly bind ourselves to pay to you on demand any sum or sums which from time to time may be demanded by you up to a maximum aggregate of Singapore Dollars One Million Two Hundred Twenty Three Thousand Four Hundred and Forty Only (S$1,223,440.00) (“the Guaranteed Sum”). |
| 2 | Should you notify us in writing at any time prior to the expiry of this Guarantee, by notice purporting to be signed for and on your behalf that you require payment to be made of the whole or any part of the said sum, we irrevocably and unconditionally agree to pay the same to you immediately on demand without further reference to the Subcontractor and notwithstanding any dispute or difference which may have arisen under the subcontract or any instruction which may be given to us by the Subcontractor not to pay the same.’ |
(Emphasis added).
The wording thereof denoted and confirmed that it was indeed an on-demand bond.
Sato Kogyo subsequently claimed approximately S$1.35 million from Tactic, made up of bank charges, administrative charges and monies owed under a separate contract. Tactic did not pay. After making demands, Sato Kogyo called on the bond. Tactic then successfully applied for and obtained a court interdict restraining Sato Kogyo from calling on the bond. Sato Kogyo applied to the High Court to set aside the interdict.
Tactic argued before the High Court that Sato Kogyo’s claim fell short of the bond amount as its arithmetic sums were flawed and inflated. In essence, the call on the bond in respect of those sums was unconscionable. In particular, Tactic alleged that Sato Kogyo was not entitled to monies that were owed under a separate project, was not entitled to impose administrative charges, and had not computed the back charges correctly.
The Court emphasised the following principles underpinning unconscionability:[8]
- parties are expected to abide by the deal they have struck, and the courts will be slow to disrupt the allocation of risk that the parties have agreed on;
- parties resisting a bond call must establish a strong prima facie case of unconscionability. This is a high threshold. A prima facie vital piece of evidence in and of itself does not make a strong overall prima facie case;
- unconscionability imports notions of unfairness and bad faith and is unlikely to be established if there is a genuine dispute between the parties; and
- the court should not carry out a ‘protracted consideration of the merits of the case’ and should focus on ‘breadth rather than depth’.
In two recent judgments, the Singapore High Court affirmed the high threshold for establishing unconscionability and provided further clarity on the scope of the exception.
The first judgment is that given in Sulzer Pumps Spain, SA v Hyflux Membrane Manufacturing (S) Pte Ltd [2020] SGHC 122 (Sulzer Pumps), in which the Singapore High Court discharged an ex parte interdict obtained by Sulzer restraining Hyflux from calling on an unconditional first demand bond.
Hyflux had engaged Sulzer as its subcontractor to supply and install pumps for a desalination plant in Oman. Sulzer, a manufacturer of pumps, provided a performance guarantee (the bond) to Hyflux as security for its warranty obligations. Between November 2017 and May 2019, the pumps repeatedly failed. According to Hyflux, the recurring failures were caused by design flaws and Sulzer was therefore in breach of its warranty obligations, which entitled Hyflux to call on the bond. Sulzer then obtained an ex parte interdict to prevent the call on the bond.
At the inter partes hearing, Sulzer argued that the interdict should be maintained as Hyflux’s call on the bond was unconscionable. The Court rejected Sulzer’s argument and discharged the interdict on the following grounds and reasoning:
- First, the Court affirmed the high threshold for establishing unconscionability, which requires the applicant to show a strong prima facie case of unconscionability as per the principles laid down in BS Mount Sophia;[9]
- Second, the Court opined that Sulzer’s argument that the injunction should be maintained, because it supposedly would be unfair for the beneficiary to realise his security (pending the resolution of the substantive dispute), would have the consequence of establishing unfairness as a standalone ground for an injunction – thus equating unfairness to unconscionability. The Court, in rejecting these contentions by Sulzer, held that:[10]
‘… unconscionability is not a free ranging inquiry of fairness in a loose sense; such a position would go against the strictures on protection of the sanctity of the agreement entered into the parties. Also, as indicated above … unconscionability refers to conduct lacking bona fides, and not unfairness in a loose sense …’
(Emphasis added).
- Third, the Court affirmed that calling on the bond where there is a genuine dispute as to the root cause analysis does not amount to unconscionability;[11]
- Fourth, the Court held that the mere fact that Hyflux was undergoing a restructuring was irrelevant to the analysis on unconscionability;[12]
- Fifth, the Court acknowledged that although a delay in calling on a bond may, in certain circumstances, be illustrative of mala fides and go some way to proving unconscionability, it found that Sulzer had in this case not proven that Hyflux’s call on the bond (more than six months after the pumps had been fixed, and nearly two years after the pump failures first arose) was unconscionable since the time lag was explained adequately and that it showed an ongoing genuine dispute between the parties;[13]
The second judgment is that given in CEX v CEY and another [2020] SGHC 100 (CEY). The Singapore High Court granted an interdict to restrain the developer, CEY, from calling on an on-demand performance bond provided by the contractor, CEX, on the grounds of unconscionability.
Here, the construction project was beset with delays. CEY claimed that the delays were attributable to CEX’s persistent failure to carry out the contract with due diligence and expedition. CEX argued that many of the delays were beyond its control and pointed to, among other things, the hospitalisation and subsequent death of the architect for the project. When CEY sought to recover losses arising from CEX’s alleged breaches of contract and CEX refused to pay, CEY called on the performance bond.
The Court surveyed the cases where a bond has been restrained on the grounds of unconscionability, and found that unconscionability had manifested itself multifariously in, among others, the following non-exhaustive forms:[14]
- calls for excessive sums;
- calls based on contractual breaches that the beneficiary of the call itself is responsible for;
- calls tainted by unclean hands, e.g., supported by inflated estimates of damages or mounted on the back of selective and incomplete disclosures;
- calls made for ulterior motives; and
- calls based on a position which is inconsistent with the stance that the beneficiary took prior to calling on the performance bond.
The Court found that CEY’s call on the bond was unconscionable on the following grounds:
- First, that CEY was itself responsible for at least part of the delays (as per the second bullet point in the immediately preceding paragraph) by failing to appoint a replacement architect as required under the relevant statute. . It would have been illegal for CEX to continue with building works in the interim period without supervision from a replacement qualified person.[15]
- Second, a beneficiary simply cannot rely on illegality when calling on a performance bond. The evidence showed clearly that CEY had relied on CEX’s failure to continue works during the interim period (which would have been illegal) in terminating CEX’s employment and calling on the bond. Therefore, the bond call was rooted in illegality and, hence, unconscionable.[16]
South Africa law
In South African law, the general doctrinal basis for unconscionability exception is to be linked to the role of good faith in the contract. Good faith in South African law is a contentious issue and has been subject to judicial comment and scholarly attention.
The authors, Prof D Hutchinson, et al., identify good faith as one of several fundamental ideas in the modern law of contract. They observe:[17]
‘The concept of good faith, or bona fides has deep roots in our legal system … In recent times, there has been much debate about the role it might play in the modern law of contract, as a counterweight to the dominant idea of freedom of contract, and as a means of developing a doctrine of unconscionability to ensure greater fairness in contractual relations.’
(Emphasis added).
In the case of Brisley v Drotsky 2002 (4) SA 1 (SCA) (Brisley), the Supreme Court of Appeal identified good faith as a fundamental principle in South African law which only finds application as an underlying, general and supplementary value in conjunction with other established rules and principles.[18]
In Beadica 231 CC and Others v Trustees, Oregon Trust and Others 2020 (5) SA 247 (CC) (Beadica) the Constitutional Court pointed out that the SCA’s judgment in Brisley essentially confirmed that good faith does not form an independent or free-floating basis upon which a court can refuse to enforce a contractual provision and that the acceptance of good faith as a self-standing ground would create an unacceptable state of uncertainty in our law of contract.[19]
Since Brisley the SCA and the Constitutional Court on numerous occasions have been required to engage in and elaborate on the roles of good faith and public policy in the development of the law of contract in the new constitutional era.[20]
In Beadica the Constitutional Court, undertook a comprehensive survey of South Africa’s pre– and post-constitutional jurisprudence on this subject matter and considered developments in the case law pre– and post–Barkhuizen too.[21] It further undertook a survey of comparative jurisprudence on the role of good faith in other jurisdictions.[22]
After embarking on the aforesaid surveys and the underlying considerations informing the developments alluded to in them, the Constitutional Court (*per Theron J, with whom Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurred) (*the majority judgment) next explained the role of the Constitution, fairness, reasonableness, justice and ubuntu in our constitutional dispensation as follows (footnotes omitted):[23]
‘[71] There is only one system of law in our constitutional democracy. As recognised by this court in Pharmaceutical Manufacturers, this system of law is shaped by the Constitution, which is the supreme law, and all law, including the common law, derives its force from the Constitution and is subject to constitutional control. The determination of public policy is now rooted in the Constitution and the objective, normative value system it embodies. Constitutional rights apply through a process of indirect horizontality to contracts. The impact of the Constitution on the enforcement of contractual terms through the determination of public policy is profound. A careful balancing exercise is required to determine whether a contractual term, or its enforcement, would be contrary to public policy. As explained by the Supreme Court of Appeal in Barkhuizen SCA, and endorsed by this court in Barkhuizen, the Constitution requires that courts —
’employ [the Constitution and] its values to achieve a balance that strikes down the unacceptable excesses of “freedom of contract“, while seeking to permit individuals the dignity and autonomy of regulating their own lives’. [The CC’s emphasis]
[72] It is clear that public policy imports values of fairness, reasonableness and justice. Ubuntu, which encompasses these values, is now also recognised as a constitutional value, inspiring our constitutional compact, which in turn informs public policy. These values form important considerations in the balancing exercise required to determine whether a contractual term, or its enforcement, is contrary to public policy.
[73] While these values play an important role in the public policy analysis, they also perform creative, informative and controlling functions in that they underlie and inform the substantive law of contract. Many established doctrines of contract law are themselves the embodiment of these values.
[74] In addition, these values play a fundamental role in the application and development of rules of contract law to give effect to the spirit, purport and objects of the Bill of Rights. Courts are bound by s 39(2) of the Constitution to promote the spirit, purport and objects of the Bill of Rights when developing the common law. When the common law deviates from the spirit, purport and objects of the Bill of Rights, courts are mandated to develop it in order to remove that deviation. In addition, courts must not lose sight of the transformative mandate of our Constitution. Transformative adjudication requires courts to ‘search for substantive justice, which is to be inferred from the foundational values of the Constitution … that is the injunction of the Constitution — transformation‘.
[75] These values should be used creatively by courts to draw normative impetus and develop new doctrines that address deficiencies in the law of contract. As held by this court in Carmichele:
‘The influence of the fundamental constitutional values on the common law is mandated by s 39(2) of the Constitution. It is within the matrix of this objective normative value system that the common law must be developed.’
[76] Indeed, this court has recognised the necessity of infusing our law of contract with constitutional values. This requires courts to exercise both resourcefulness and restraint. In line with this court’s repeated warnings against overzealous judicial reform, the power held by the courts to develop the common law must be exercised in an incremental fashion as the facts of each case require. The development of new doctrines must also be capable of finding certain, generalised application beyond the particular factual matrix of the case in which a court is called upon to develop the common law. While abstract values provide a normative basis for the development of new doctrines, prudent and disciplined reasoning is required to ensure certainty of the law.
[77] Our case law demonstrates how abstract values have informed the development of new doctrines. In Tuckers Land Jansen JA developed the law of contract, finding that there is an implied duty not to commit anticipatory breach. This development was based on the requirement that contracts are to be performed in good faith. Similarly, in BK Tooling, the Appellate Division developed the law of contract to permit a relaxation of the principle of reciprocity where a party to a reciprocal contract had used the other party’s partial performance. It did so on the grounds of fairness. These cases illustrate the development of clear doctrines that brought our law of contract in line with the values of fairness, reasonableness and justice.
[78] The scope for the development of new common law rules in our law of contract is broad. The common law must be developed so as to promote the spirit, purport and objects of the Bill of Rights. Constitutional values have an essential role to play in the development of constitutionally infused common-law doctrines.’
(Emphasis added).
In other words, courts of law, through the instrument of public policy – which is infused with the values of fairness, reasonableness and justice – would be able to recognise, in justifiable circumstances, an unconscionability exception, subject, of course, to an application of the strictures articulated in paragraph [76] of the above-quoted portion of the majority judgment in Beadica.
As far as the sanctity of contracts – expressed by the principle of pacta sunt servanda – is concerned the majority judgment in Beadica proceeded as follows (footnotes omitted):[24]
‘[83] The first is the principle that ‘(p)ublic policy demands that contracts freely and consciously entered into must be honoured‘. This court has emphasised that the principle of pacta sunt servanda gives effect to the ‘central constitutional values of freedom and dignity‘. It has further recognised that in general public policy requires that contracting parties honour obligations that have been freely and voluntarily undertaken. Pacta sunt servanda is thus not a relic of our pre-constitutional common law. It continues to play a crucial role in the judicial control of contracts through the instrument of public policy, as it gives expression to central constitutional values.
[84] Moreover, contractual relations are the bedrock of economic activity and our economic development is dependent, to a large extent, on the willingness of parties to enter into contractual relationships. If parties are confident that contracts that they enter into will be upheld, then they will be incentivised to contract with other parties for their mutual gain. Without this confidence, the very motivation for social coordination is diminished. It is indeed crucial to economic development that individuals should be able to trust that all contracting parties will be bound by obligations willingly assumed.
[85] The fulfilment of many of the rights promises made by our Constitution depends on sound and continued economic development of our country. Certainty in contractual relations fosters a fertile environment for the advancement of constitutional rights. The protection of the sanctity of contracts is thus essential to the achievement of the constitutional vision of our society. Indeed, our constitutional project will be imperilled if courts denude the principle of pacta sunt servanda.
[86] However, the pre-constitutional privileging of pacta sunt servanda is not appropriate under a constitutional approach to judicial control of enforcement of contracts. Prior to our constitutional era, in Wells, the Appellate Division cited an English authority to the effect that —
‘(i)f there is one thing, which more than another, public policy requires, it is that [individuals] of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and enforced by courts’.
[87] In our new constitutional era, pacta sunt servanda is not the only, nor the most important principle informing the judicial control of contracts. The requirements of public policy are informed by a wide range of constitutional values. There is no basis for privileging pacta sunt servanda over other constitutional rights and values. Where a number of constitutional rights and values are implicated, a careful balancing exercise is required to determine whether enforcement of the contractual terms would be contrary to public policy in the circumstances.
[88] The second principle requiring elucidation is that of ‘perceptive restraint‘, which has been repeatedly espoused by the Supreme Court of Appeal. According to this principle a court must exercise ‘perceptive restraint‘ when approaching the task of invalidating, or refusing to enforce, contractual terms. It is encapsulated in the phrase that a ‘court will use the power to invalidate a contract or not to enforce it, sparingly, and only in the clearest of cases‘.
[89] This principle follows from the notion that contracts, freely and voluntarily entered into, should be honoured. This court has recognised as sound the approach adopted by the Supreme Court of Appeal that the power to invalidate, or refuse to enforce, contractual terms should only be exercised in worthy cases.
[90] However, courts should not rely upon this principle of restraint to shrink from their constitutional duty to infuse public policy with constitutional values. Nor may it be used to shear public policy of the complexity of the value system created by the Constitution. Courts should not be so recalcitrant in their application of public policy considerations that they fail to give proper weight to the overarching mandate of the Constitution. The degree of restraint to be exercised must be balanced against the backdrop of our constitutional rights and values. Accordingly, the ‘perceptive restraint‘ principle should not be blithely invoked as a protective shield for contracts that undermine the very goals that our Constitution is designed to achieve. Moreover, the notion that there must be substantial and incontestable ‘harm to the public‘ before a court may decline to enforce a contract on public policy grounds is alien to our law of contract.’
(Emphasis added).
Also, from this quoted portion of the majority judgment in Beadica, it can be seen that the principle of pacta sunt servanda –
- remains firmly entrenched as one of the ‘central constitutional values of freedom and dignity‘; and
- if it were to be denuded of its controlling value and force, our ‘constitutional project will be imperilled’; and
- is not, however, ‘… the only, nor the most important principle informing the judicial control of contracts’ (emphasis added); and
- there is no basis for privileging pacta sunt servanda over other constitutional rights and values; and
- where a number of constitutional rights and values are implicated, ‘… a careful balancing exercise is required to determine whether enforcement of the contractual terms would be contrary to public policy in the circumstances’ (emphasis added).
Against this background, I turn specifically to unconscionable demands that are made under independent guarantees.
In Sulzer Pumps Limited v Covec-MC Joint Venture [2014] ZAGPPHC 695 (Sulzer Pumps), the former judge (Jansen J) made several references to ‘unconscionability’ in the context of a call on an on-demand guarantee.[25]
The applicant (Sulzer) had provided the respondent (Covec MC) with a performance guarantee (the bond) at the outset of their construction agreement. The bond was evidently – despite some dispute about this by Covec MC – renewed on an annual basis. Sulzer alleged that Covec MC’s entitlements to the fruits of the bond would be dependent on the outcome of arbitration proceedings that had not yet been finalised; and that the bond could not be called up before the arbitration had been finalised.[26]
The judge’s reference to the concept of ‘unconscionability’ self-evidently was informed by a reference to paper titled ‘Calling on a Performance Security: As Good as Cash?’, presented by Michael Whitten QC of the Victorian Bar to the Commercial Bar Association: Construction Law Section.[27] In this paper, the author/presenter (Whitten) refers to developments in Australian law where courts have accepted the equitable doctrine of ‘unconscionability’ or its statutory equivalent under the statutory regime of Section 51AA of the Trade Practices Act.
Jansen J, in the course of her judgment, remarked:[28]
‘… the respondent *[cannot] be correct in asserting that it could call up the guarantee “at any time”. Clearly it could not. To do so, given the circumstances of this case, would be unconscionable.’
(Emphasis and *insertion added).
The learned judge then added the following observation, i.e., after referring to the constitutional imperative of promoting the values that underlie an open and democratic society based on human dignity, equality and freedom,[29] the importance of the bona fides of contracting parties,[30] and (supposedly) the ‘old authorities’:[31]
‘What the old authorities do demonstrate though, is that not only fraud may prohibit the calling up of a construction guarantee, but also unconscionable conduct and also when a contract to the contrary has been entered into between the relevant parties (in this instance, including the bank).
Unfortunately, Jansen J’s exposition of the law does not convincingly demonstrate why this necessarily reflects the current position in South African law, which – as seen above[32] – only has recognised fraud as an exception to the rule that the guarantor is bound to pay without demur.
The Singapore courts have allowed the exception of unconscionability to cater for situations where the conduct of the beneficiary was sufficiently reprehensible to justify an interdict in circumstances where the facts do not amount to fraud. This exception appears to have deterred the kind of capricious calls on bonds that are encountered in other jurisdictions, thereby reducing the risk exposure of contractors to unjustifiable calls on-demand bonds and also assisting them to maintain their economic relevance in the construction industry.
Whether this exception will in time become a ground in South African law for defeating unconscionable calls for payment in respect of on-demand guarantees in circumstances falling short of fraud, still remains to be seen. However, in my view, the Constitutional Court in Beadica has paved the constitutional path for such a development, provided that factual circumstances, such as or similar to those in the Singaporean case of BS Mount Sophia, can be proven and the high threshold of the requirements enunciated in that case can be established. However, what must always be borne in mind, is the commercial role that performance bonds are intended to perform – i.e., to provide security that is to be readily, promptly and assuredly realisable when the specified event for payment is triggered – and this ought not to be undermined unless the strict requirements for establishing an intervention based on unconscionability are duly satisfied.
ADINE ABRO
Director: Adine Abro Attorneys Inc
Direct Tel: +27 10 300 0970
E-mail: adine@adine-abro.co.za
8 May 2021
[1] Lombard at para [20], p. 90 F – H. See too: Minister of Transport and Public Works, Provincial Government of the Western Cape and another v Zanbuild Construction (Pty) Ltd and another 2011 (5) SA 528 (SCA) at para [15], 532 F -533 A; and Guardrisk Insurance Company Ltd and others v Kentz (Pty) Ltd [2014] 1 All SA 307 (SCA) at para [14], p. 312.
[2] State Bank India at para [10], p. 156.
[3] BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd [2012] SGCA 28 (BS Mount Sophia), at paras 18 and, especially, 19.
[4] Arvin Lee, Injuncting Calls on Performance Bonds: Reconstructing Unconscionability, 2003 Singapore Academy of Law Journal (SAcLJ) 30 at §9, p. 34.
[5] Christopher Wong, Recent developments on demand bonds and guarantees in England and Australia, 2012 The International Construction Law Review 51 at p. 64.
[6] BS Mount Sophia (n 1), para 18..
[7] Ibid., at para 23.
[8] Tactic Engineering, supra, at para 9 (a) – (d).
[9] Sulzer Pumps at para 35 to 40.
[10] Ibid., paras 41 to 43.
[11] Ibid., paras 44 to 51.
[12] Ibid., paras 52 and 53.
[13] Ibid., paras 60 and 70.
[14] CEY at paras 11, 22 and 40.
[15] Ibid., at paras 65 to 67.
[16] Ibid., at paras 68 to 71.
[17] D Hutchison et al., The Law of Contract in South Africa (2012), para 1.8, p. 21.
[18] Brisley at para [20, p. 15 D – G, where the SCA also quoted, with approval, D Hutchison ‘Non-Variation Clauses in Contract: Any Escape from the Shifren Straitjacket‘ (2001) 118 SALJ 720 at p. 744.
[19] Beadica at para [29], pp. 262 – 263.
[20] See, among other cases, Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA); South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) in which the SCA stated (at para [29], p. 340 A – B): ‘To say that terms can be implied if dictated by fairness and good faith does not mean that these abstract values themselves will be imposed as terms of the contract.’; Barkhuizen v Napier 2007 (5) SA 323 (CC); Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC); and Botha v Rich 2014 (4) SA 124 (CC).
[21] See n 19 above, as well as Beadica at paras [32] to [60], pp. 264 – 274.
[22] Beadica at paras [61] to [70], pp. 274 – 278.
[23] Ibid., paras [71] to [78], pp. 278 – 280.
[24] Ibid., paras [83] to [90], pp. 282 – 284.
[25] Sulzer Pumps at paras [41], [42], [87], [115] and [125].
[26] Ibid., paras [11] to [34], as well as paras [97], [103] and [110].
[27] Ibid., para [40].
[28] Ibid., para [87].
[29] Ibid., paras [104] and [105].
[30] Ibid., para [107].
[31] Ibid., para [115].
[32] State Bank India at para [10], p. 156.