Our Courts may have previously considered and been somewhat receptive to the idea of developing the common law to incorporate a duty on parties to negotiate in good faith, however a recent judgment handed down by the Supreme Court of Appeal has put such thoughts into perspective.
Roazar CC v The Falls Supermarket CC 2018 1 All SA 438 (SCA), a judgment written by Tshiqi JA, held that it is not competent for a Court to import a term not intended by the parties simply on the basis of the principle of “ubuntu”.
The Respondent in the matter, The Falls Supermarket, leased certain premises from the Appellant, Roazar. In terms of the agreement of lease, The Falls Supermarket was required to give one month’s written notice, prior to the expiry of the lease, of its intention to exercise the right of renewal. The Falls Supermarket failed to give timeous notice and Roazar therefore gave The Falls Supermarket notice to vacate the premises, failing which it would proceed with an application for its eviction which, in time, it proceeded to do.
In the eviction application, the Court sought to determine whether Roazar was entitled to terminate the contract by invoking the terms of the lease agreement. The Court held that, on a sensible interpretation of the lease agreement, The Falls Supermarket had to notify Roazar of its intention to exercise the option at least one month before the expiry of the lease period, which it failed to do. Roazar therefore, in terms of the provisions of the agreement of lease, had a right to terminate the lease agreement, which it duly did.
The Falls Supermarket argued that Roazar was not entitled to evict it and alleged that the contract could not be terminated until good faith negotiations had taken place. It contended that until good faith negotiations had been undertaken, the lease agreement should be allowed to continue.
The Court held that it would be difficult to conceive how a Court, in a purely business transaction, could rely on the principle of “ubuntu” to import a term that was not intended by the parties and to deny the other party the right to rely on the terms of the contract. In this way, the Court sought to uphold the sanctity of the contract to which the parties had consciously bound themselves.
This decision clearly demonstrates the importance of ensuring that you are fully acquainted and comfortable with the terms of the contract which you are signing. It appears as though the Court’s willingness to be lenient and to allow for the parties to a contract to rely on principles such as good faith and “ubuntu” and to thereby import terms into a contract which are not present on the face of it, are diminishing.
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