166 1HE ZIMBABWE LAlli JOL'RNi\L

cor1MERCIAL. LAH OF ZIMBAB'4E - CONTR~CL P.~RT q;

TERMTN.~TION OF CONTR4CTS

BY

PETER L VOLPE BA [Lond) Mil. LLB (Cantab)

- of Gray's Inn, Barrister at la\,'
Advocate 0 f the Hi gh Court of Zimbab\"e
Senior Lecturer in La\v: University of Zimbablve
')
. This is the fourth and last part of the author '8 work ,-
on the commerci~l law of Zimbabwe, the previous parts of which
appeared in 1978 RLJ 7 and -142 and 1979 ZimLJ 38. The subJect
- is presented in a manner easily assimi.lable by students studying
by correspondence or at technical coZleges,- who do 7~t have
ready access to the law reports.
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"
 CO~W1ERCIAL LAW OF ZlM8P',8WE " CO~ITRACT , 167

-,
PART 4 TERMINATION OF CONl'RACTS

SEC'I'LON 1 INTRODUCTION 184

1:1 Nature of termination 184
1.2 Means of termination lS4

SECTION 2 PERFORNANCE 1St,

2.1 l'iho J1\3.y mal(e performance 184
2.2 To .,hom performance may be made 186
2.3 'The na.ture of performc'U1ce 186
2.4 Appropriation of payments 190
2.5 Place of performance 194
2.6 Time of performance 197
2.7 Prevention of performance 197

Sl?CTIO~ 3 MUTUAL AGREEMENT 198

3.1 Waiver 198
3.2 Novation 200
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3.3 Compromise 201

SECTION 4 OPERATION OF I.AI~ 205

4.1 Set-off 205,
4.2 'Merger' '208
4.3 Supervening impossibility of performance except 210
2., lvhere performance has become impOssible
as direct result of debtor's own wrong-
ful act 211
b. When debtor has taken upon himself risk
of peTfo~~ce becoming impossible 212
c. l~nen perfonnance is wre difficult or
costly' but not impossible 213
,d .• Where the impossibilitY is partial, in
which case obligation remains in
existence in so far as the part that is
still possible is concerned 214
e._ Where debtor is only temporarily disabled
from fulfilling his obligation 215
4.4 Extinctive prescription, 215
4'.4.1 Periods of prescriptiqn of debts 216
4.4.2 Delay in the completion of prescription 216
4.4.3 Interru~tion of prescript:on 217
4.5 Insolvency 217
,1,6 Death 219
4.7 Estoppel 220
 168
THE ZIMBABWE LAW JOURNAL .':;T .

PART 4. TERMINATION OF CONTRACTS

SECTION 1. INTRODUCTION

1.1 Natu:re of termination

Part 1 showed that in the cas e 0 f a vo id contract, there is no

contract at all; Part 2 that a voidable contract may be set
aside by one of the parties; Part 3 that a valid contract may
'be cancelled if orte of the parties is in breach of a material
tenn. Part 4 deals with the more nonnal means of terminating a
contract, where there is no lack of an .essential of a valid con-
t~ct, no defect and no default.

1. 2 Means of termination

Contractual rights and obligations are terminated by -.

Ca) Performance, or
Cb) Mutual agreement, or
(c) Operation of law.
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Each of these means of terminating a contract is discussed in the

following sections.

SECTION 2. PERFORr-1ANCE

2.1 Who roy make ·pe.rformance

Performa.nce may be rradE not only by the debtor. himself but also
by anyone acting in his. name, whether with-his knowledge or not,
and even against his will. -

The creditor is not entitled to refuse performance in .the dEbtor's

name by a third party where it makes no difference to him by whom
the contract. is performed.

Froman v Robertson B71 (1) SA 115 (AD). A deed of sale of

immovable property by R to Van Rooyen, as trustee of a company to'
be fonned, provided that one tenth of the price. was to be- paid
within seven days and the balance in eight equal quarterly instal-
ments. Iethe company was not registered within thirty days V
waS to be deemed buyer and personally liable. V made the initial
payment on 24 Mlrch. On 31 ~1arch a written contract titled
'cession' was entered into between.V, acting in his personal
capaci ty and as trust.!=:e for the company to be fonned, as cedent,
and F as ce~sionary, stating that for a named sum the 'cedent
 TERMINATION OF CONTRACTS 169

hereby cedes, assigns and makes over to the cessionary all the
cedent's right, title and interest in and to the deed of sale,
which cession and assignment ~e cessionary hereby takes and
accepts, and that the ~ssionary asswnes and takes over all
liabilities, obligations of the cedent' illlder the deed of sale.
R \<las, no party to the cession. . The; cheque dra\<ITI by F in favour
of R for the first quarterly instalment \<las met, but that for the
second \<las dishonOlITed by non-payment. HELD, as bet\<leen F as
dra\<ler of the cheque and R <lS payee, the promises made by F as
dra\<ler required a justa causa (reasonable, cause); the cession
agreement did not transfer to F" V's obligations to R illlder the
deed of sale (R had not consented) ; but payment had been made
.on V's behalf in discharge of his obligation tO\<lards R illlder the
cession agreement, so that the cheque had been supported by justa
,causa. Corbett AJA said: , " . . . it is importartt to note that
in our la\<l a stranger toa contract, acting \<Iithout authority,
may validly discharge the debtors obligation the,reilllder. As it
is' put by Pothier, Obligations III.1.r: 'It is not essential to
the validity of the payrrent, that it be made by the debtor, or
any person authorized by him; it may be made by any person
\<Iithout such authority, or even in opposition to his orders,
. provided it is made in his name, and in his discharge, 'and the
property is effectually transferred; it is a valid payment, it
induces the extinction of the obligatlon, and ,the debtor is dis-
charged even against his \<Iill.' ",

Reliance Agencies (Pty) Ltd v Patel 1946 CPD 463. In an applica-

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tion for a final order of sequestration of the estate of P, a

mar:ried \<loman \<Iho carried on business as Patel &' Co, it \<las proved
that after the granting of the provisional order bot before the
return day her husband had paid P's. debt and deposited the aJ1Dilllt
of the costs. HELD, these payments \<Iere good in la\<l and thus the
provisional order had to be discharged.

If performance by a particular person was contempZated, the

obligation can ,only be discharged by that person.'

Ha~mag SA (Pty) Ltd v Otto 1940 CPD 436. 0 had bought a diesel
tractor from H, but declined to pay for it because he alleged it
,\<las materially defective. An action brought against Oby H \<las
settled it being agreed that H \<Iould ~ave the tractor repaired
by Mmk, a mechanic of Heidelberg, "hose certificate that it \<las
in \<larking order and in good repair \<Iould be binding on O. H,
\<Ii thout consulting 0, arranged for the work to be done by RoSSOlll"
having fOillld that M's machinery .and equipment \<Iere not adequate
,ror the job: M thereafter' gave. his certi ficate . The tractor
broke ,dO\<ln and 0 refuSed to pay. HELD, H had not effected the
repair as promised. De Villiers J quotes the Jollo\<ling from
Pothier, ObligatiOnS I para 207: 'The decision of the question
depends,' on the nature of the fact, and upon the examination of
the intention of the, contracting parties. If the fact, \<Ihich
is theobj~t of the condition, is pe~onal, if it is the act of .
a -particular person; rather than the mere act itself, \<Ihich the
parti~ ha:d in view, the condition can only be acconplished by
that person.'
 '170 THt ZIMBABWE LAW JOURNAL

2.2 'To whom perfo:munce rruy be made

Performance "lust be made to the credi tor, his nominee or to his

cessionary if notice !Jas been given.

Palmer v President Insurance Co Ltd 1967 (1) SA 673 (0). 'P

bought a car from Lambons Ltd, Bethlehem, on hire-purchase and
insured it with President Insurance Co Ltd. The insurance policy
stated that if to the insurer's knowledge the vehicle was the
subject of a hire-purchase contract, payment would be made by the
insurer to the owner, 'whose receipt shall be a full and final
- discharge'. 'Subsequently, the car was des troyed in an accident
and, on the repudiation by the insurance company of liabilitY, p'
sued it, claiming an order that it should pay him not Lambons Ltd.
The insurance company excepted to the summons as disclosing no
c~use of action. ,HELD, the exception should be upheld. Smuts
Jsaid: "In terms of the agreement he cannot claim payment to
himself where the excipient (insurance company) is aware that the,
car is held under hire-purchase agreement at the time when the
indemni ty is payable. The right, conferred on him is to claim
payment by the excipient to the adjectus (Lmrbons Ltd) unless he
can prove either waiv~r by the excipient of'the rights conferred
on him or facts which would justify revocation by him of the
authority conf~rred by the agreem~nt on the excipient to pay the
adjectus ."

Adjectus solutionis ,causa is a person, other than the

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NOTE:
, creditor, to whom, by agreement between the parties, the
debtor is entitled,to pay what is due to the creditor,
apd so discharge his obligation. f
See also'Brook V ,TOrieS in 2.2.2 in Part 3 above for the position
where there has been a cession.,

2.3 The nature of performance

The performance of a~ equivalent act ,(performance per aequipollens)

instead of that actually agreed upon {performance in fonna'specific
discharges the ,obligation only if the surrounding circumstances
show that the parties contemplated that such an equivalent act
would'be sUffi(ient. - '

De Villiers J in Hanomag SA (Pty) Ltd v otto (see 2.1 above) said:

"I am entitled to investigate and consider the surrounding circum-
stances in so far as they can assist in the elucidation 9f the
particular ques tion involved., This is common cause 'between the
parties, and is' indeed clearly set out in Wessels' Contract (I •.
sec> 1335) in the following tenns: 'Hence, the IllUch discussed
questton whether a condition ought to be performed in forma
specifica or ,per aequipollens is robbed of IllUch of its difficulty.
The Court IT(UStgather from the surrounding circumstances what the
parties contemplated. It JllUSt take into consideration everything
which can give a clue to the intention of the parties. It JllUSt
 TERMINATION OF CONTRACTS 171

seek to find out what the parties would have wished if. their
minds had been specially directed to the question whether the
condition was to be fulfilled in forma specifica or by an equi-
val ent act. '" '.

Claasen J set out the lines to be proceeded along in Van Diggelen

v De Br'U":n and another' (below): " . . . (1) The Court )1Iustgather
. from ·the surrounding. circumstances what the parties contemplated.
It must take into consideration everything which can give a clue
to· the intention of the parties. It must seek to find out "hat
the parties would have wished if their minds had been specially
d:trected to the question whether the condition was to be fulfilled
in forma specifica or by an equivalent act . . . (2) If
however the circumstances afford no clue then there is a presump-
tion that the condition must be perfonned in fonna specifica . . .
This presumption ,is rebuttable by the promisor, but it cannot be
.rebutted where it is clear from the terms of the contract and the
surrounding circl.lIT6tances that performance in fonna specifica was
stipulated in the contract . . . (3) The Court will in
cases of doubt be more likely to find in favour of perfonnance
per aequipollens if me marmer of performing the condition is not
material or also where performance in forma specifica is impossible
·through .no selious fault on the part of the promisor . . .
(4) The act or performance tendered per aequipollens where such
is permissible must in the first instance be an equivalent act to
that meiltione,d in 'the contract or be of such a nature that it can
make no material difference to the promisee . . . . (5) The
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Court's parar.nunt concern is always within t~e frame-work of the

law, to do justice between man and man. , It will be guided by
the terms and ·circt.nnStances of the contract under consider,?-tion."

/--------. The above rules must be' read in the 'light o'f Van den Heever JA's
remarks in F:rwner' v Maitland (below): "For the COurt. to think
what equivalent fulfilment of a condition would probably have
satisfied the parties and that consequentlY they probably intended
the fulfilment per aequipollens of such a putative condition, is
a dangerouS proceeding which may well result in judicial discre-
tion over-riding contractual autonomy. In the circumstances dis-'
closed in Hanomag 8A (Pty) Ltd v Otto, for example, a .. Court may
well have come to the conclusion before the second breakdown of
the machine in ques tion, that once the agreed referee certified
the machine I to be in working order and in good repair', it was
of no concern of the defendant how or by whom it was rendered 'so:
I have no doubt that such a conclusion would have worked injustice.
Where the language is plain,. I think, the golden canon of inter-
pretation has been crisply stated by Greenberg JA in WOI'man v
Hughes and Other'S 1948 (3) SA 495 (AD) (the facts of this case
have not been given'as they are not important): 'It must be borne
in mind that in an action on a contract, the rule of interpreta-
tion is to ascertain, not what the parties' intention was, but
. what the language used in the contract means, i.e. whether their
intention was as expressed in·the contract.',"

It would appear that the rule in Hanomag SA (pty) Ltd v otto do~s.
->
 172 THE ZIMBABWE LAW JOURNAL

not cons ti tute an exception to, the ordinary rues of coris tru~tion
(see 5.3 in Part 1), but is to be considered subservient to them.

Frumer v Yaitland 1954 (3) SA 840 (AD). M sold certain immovable

property to F. The deed of sale contained a stipulation that
"the property is sold as it now stands, and the seller shall not
be responsible for any defects whether latent or patent", but a
secoo4 special condition was added which read: "subject to a
certificate being obtained from a Government approved Entomologist
that.the property is apparently free from infestation-of notifiable
beetle". M sued F for the balance of the purchase price; claimin~
that such a certificate had been obtained, occupation and transfer
of the property tendere~, but F refused to take either or perform
her obligations under the contract. The property was infested
with beetle at the time of sale, infested timber had been replaced
and all remaining timbers treated. F pleaded t.1-tat the certificate
, -referred not to the property at ~e time 6f the sale but to it
after it had been- treated and altered and therefo.re 'vas not the
certificate' as- requi,red by the,special condition. Ws exception
to F's plea was upheld by the Cape provincial Division and F
appealed. HELD.. dismiss ing the appeal, a certificate wldch
related to the property as treated and altered, and not to- the
property as it originally was, 'fell within the ambit of the
special condition; -further, the certi fica te requi red had to
relate to the apparent state of the property as at the date of
the certificate, and not as at the date when the contract \Vas
cCJI)cluded.

-
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Van Diggelin v De Bruin and another 1954 (1) SA 188 (SWA). V

sold D three farms. A condition of sale provided that D would
taKe over the bond on the property and pay the balance of the
purchase price on transfer, V to obtain the consent of, the bond-
holder. The bondholder was, however, prepared only to grant a
smaller arrnunt to remain on bond and <;It a higher rate of interest.
V tendered to grant D a sec6nd bond for the difference and to
arrange the terms thereof in such a way that the total interest
payable by D would not be more than that payable on the whole _
-amJunt of the original bond. D refused to accept this tender
and repudiated the contract, which repudiation V accepted. V
thereupon sold out against D thereby sustaining a loss which she
cla:iJIed as cOITqJensation from D., D excepted. HELD, upholding
the exception, the tender required D"s consent and D was entitl,ed
to refuse it no matter how unreasonable D might be: - D was
entitled to perfonnance in forma specifica'. Classen J having
set out the five lines above along which to proceed said: "This
being in my view a doubtful case plaintiff has failed to show
'that performance in forma specifica-was impossible. Accordingly,
she has failed to state such facts, which if proved, will discharge
the onus nentloned in (2) ,above. There is also in my opinion no
room for implying that perfoTma'1ce per aequipollens was contem-
plated by the parties . . . "

Where money has to be paid, the tendering.of a .cheque is,

I generally speaking, not sUffiaient, but in a aommeraial transaation
 TERMINATION OF CONTRACTS 173

and espeaiaUy whe1'e paym9nt by cheque has been accepted in the

past, the cOu:r't wi n not 1'equi1'e Ve1'Y strong evidence to show
that the parties contemplated in the particular case that payment
rrright be made by cheque.

Schneider and London v Chapman 1917 1PD 497. S sold C two

chiJ1U1ey stacks for £550. It was agreed that S would take a
cheque for £100 as depesi t, ,the balance of the price to be paid
on or before 18 Much. Ownership would not pass until the
balance had been paid. If it was not paid by due date the con-
tract was to be cancelled and the £100 deposit forfeited as
,liquidated damages. Before the due date for the paynent of the
balance of the price, S discovered that one of the stacks was
taller than they had thought. C sent a cheque for £450 in good
tirre', having funds in the bank to rreet it, but S returned it as
not being legal tender. On 22 Mlrch, iJJlll'ediately he received
the returned cheque, C tendered £450 in gold but by this time the
due date had passed and the tender was refuSed. After further
negotiations, C paid £550, instead of the balance of £450, in
order to obtain the stacks, but reserved his rights. He then
brought an action in the magistrate I s court for the refund of the
extra £100. The magistrate found for C and S appealed. HELD,
the appeal should be dismissed. lli Villiers JP said:
it can be sard at once that generally speaking . . . the tendering
of a cheque is not payment. But having regard to the course .of
cminrercial dealings in the modem world, which is so very different
from what it used to be two or three hundred years ago, the court
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will not require very strong evidence to show ,that the parties in
the particular transaction contemplated that paynent might be made
by cheque." . i f we ha.ve regard both to the words of the document
which I have read, and'to the course of dealing which had been
followed beu1een the parties previously in other transactions, it
seems to me it becomes . qui te clear that they contemplated that in
this case paym~nt could be made by cheque and need not be in cash."
When a cheque is accepted it is prinn facie regarded as immediate
payment subject to the condition that it be honoU1'ed on p1'esenta-
tion.

'In Eriksen Motors (We lkom) Ltd v Protea Motors, Warrenton &
another 1973 (3) SA 685 (AD), the facts of which do not concern
us here ,but under Sale, Holmes JA,.said: "In general, payrrent by
cheque is prima facie regarded as iJJlll'ediate payrrent subj ect to a
condi tion. The condition is that the cheque be honoured on
presentation. When the cheque is so honoured, the date of pay-
ment of the debt is the date of the giving of the, cheque. Con-
versely, if. the cheque is dishonoured there has been no payrrent
, This position is unaffected i f the cheque is payable
a t a bank s orne dis tance _away. "

Moss & Page Trading Co (Pty ) Ltd v" Spancraft Fu:r>ni fU1'e Mam'fac-
tU1'eT'S& ShopfitteT's (Pty) Ltd & Others 1972 (L) SA 211 (D). M
had s'old certain goods to S and had received cheques in payment
endorsed by ,three others as sureties and co-principal debtors.
,
 THE ZIMBABWE LAW JOURNAL

When one of the cheques was dishonoured ~1 issued a SllllIDlOns for

provisional sentence on the cheque which was serVed on S and its
,sureties. The day after service N ceded its claim to Vanjor
Investments (Pty) Ltd '.'in respect of the goods sold and delivered
to S". V applied for the provisional winding up of S, basJng
its application on che ceded claim. Two of the sureties opposed
tile granting of provisional sentence contending that the cession
of M's Claim and tile subsequent winding up of S had resulted in
M divesting itself of its claim against S and accordingly M was·
no longer enti tled in law to. proceed with the action for provi-
sional sentence. HELD, the debt arising from the .original
transaction rerrai ned intact and could be enforced if the negoti-
able instrurrents '":lere dishonoured; further, it was a prerequi- ,
si te of a creditor in M's posi tion that it should continue to be
the person of incidence (or Gedi tor) of the right of action
based upon the contract of sale to enforce payment of ,the cheques
given to such creditor as conditional payrrcn t or discharge of the
corresponding obligation tmder .the rj.ght of action based upon
that contract; M was not in\law permitted to divest itself of
the right of action and still seek La enforce payment under the
cheques; by the cession ~1 must be taken to have waived its
right to enforce pay1oc:nt of the cheq':les. .

Bassa Ltd v East Asiatic (SA) Co Ltd 1932 NPD 386. On 8 'June
1931 E sold certain Ceylon cocoanut oil to B. The price of
£99 146 lOd had to be paid in British sterling. On 15 July B
sent E an invoice for the price of the goods plus 15/ - for
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exchange. The goods were delivered and a biJ-l of exchange

payable at 90 days was drm-lI1 by E upon B for £100 99 10d and
accepLed by B on 16 July. Upon due date, 13 OctOber, in order
to discharge the bill B paid E f.f:YJ lOs 10d in South African iTDney,
which at the rate of exchange current at that date was the equi-
valent of the British sterling owed. E clai!T'ed £19 198 Od from
B, contending it had been underpaid that anuunt on the ground
tha t the date of conversion was the date of the acceptance of the
bill and not the date of payment. The magistrate gave judgment
for E. and B appealed. HELD, allol.;ing the appeal, the contract
was not a sale for cash but a sale upon 90 days credit; further,
the giVing of the bill was a conditional payrrcnt which by itself
did not create a novation of tile original debt; further,
reversing the magistrate's decision, the general rule in regard
to the sl-ischarge of a debt in a foreign currency arising lIDder a
contract is that the date of conversion from the local currency
to the foreign is the date when paYJTCnt falls, due. .

2.4 Appropriation oj payments

Where a debtor owes seveml different debts' to the same creditor

and makes a paymerit, the payment is appropriated to interest
before capital and in accordance with established rules there-
after.

Van de!' Linden (1.18.1) 'sets cut the rules as fo Uows -

 TERMINATION OF CONTRACTS 175

"(a) The, dEbtor, when he pays, is entitled_ to declare to

which debt he wishes the payment to 'be appropriated.

(b) If 'the debtor, on P!1yment, makes no appropriation,

'the credi tor who has claims arising from different
causes may specify the appropriation on giving the,
receipt. '

( c) If an ,appY'Opriation has been madE by neither the

, debtor nor the creditOr, the payment must be appro-
priat(id to the debt in the discharge of which the
deb'tor had most interest.

( d) If the dEbts were of such a natUY'e that the dEbtor

had. no more interest in the discharge of one than
of another, the appropriation must be the ,oldest
debt. '

( e) If the debts were of the same date-and alike in

every other respect, the payment is appropriated
'proportionately to each dEbt.

(f) In debts of'such a nature that th~y carry interest,

the appropriation TIIU..'Jt first be to' the interest and
then to the capi tal,"

The application of these rules is illustrated by the following

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caSes -
South African MetY'Opolitan,Life Assurance Co Ltd v Ferrei~ 1962
(4) SA 213 (0). In an action for provisional sentence on a
IIDrtgage bond the debtor F, who had been a branch manager of S,
had admi. tted that he had not paid the full am:nmt of the instal-
ments due but averred that S \.;as indebted to him in excess of the
alIDunt of instalments due and, applying the principle of set-off,
he owed S nothing, The alIDunt claimed by him was in respect of
,salary and commission. S nadappropriated both alIDunts - each
being 1es,s than the aJ1LJunt of instalments due - to F"s commission
account, which showed a debit balance. S from tj.me to time
advanced sums of IIDney as commission to F on coriunission earned by
him on new insurance policies but which had not been due when the
advances were made. ' F had at no time declared to what account
he had wanted 'the commission 'earneq. appropriated. HELD, the onus
was on F to prove that the apprOpriation had not been valid or
equi t;able; as he had failed to discharge such onus S was entitled
to proviSional sentence as claimed. Erasnrus AJ said: ''The rules
, o( appropriation as I understand the authorities on Roman Dutch Law
(cf van deT Linden in his Treatise on the Institutes) are: firstly,
that the debtor, when he, makes a payment, is at liberty to' declare
under what head, or to what account he wishes it to be entered,
and secondly, when the debtor negiects to appropriate, the creditor
is at liberty, when he' has di fferent accounts agains t the debtor, •
to specify the account to which he means to place it, provided that
the appropriation be made on the instance and that it be equitable."
 176 TH~ ZIMBABWE ~AW JOURNAL

Ebrahim (£,tyJ Ltd V Mahomed and Others 1962 (1) SA 90 (D). 1'1
had signed an acknowledgment of debt for goods sold and de livered
'and had LD1dertaken to pay the aJ1X)LD1t thereof in instalrrents;
shoUld anyone instalment not be paid E was entitled to institute
an action in, whic..l-t event M agreed to consent to judgment, pay costs
on an attorney and client basis and the collection charges. It
appeared .that (i) M had signed certain other acknowledgments of
debts in E's favour arising out of provisional sentence proceed-
ings; (ii) certain aJ1X)LD1ts had been paid to cover the anow,ts of
cert~in of the acknowledgments of debt; (iii) two sUlTnllOnses for.
provisional sentence on D,D acknowledgments of debt had been
withdrall'n'before any payrrents had been made. In an action.. for
provisi0nal sentence on'the acknowledgment of debt in respect of
goods i sold and delivered the Durban and Coast 'Local Divis ion had
held, that, as the liability in respect of this· acknowle(lgment was
inore' onerous than the two in respect of which provisional sentence
had been withdrawn., the balance remaining after paying the am:nmt
in (ii) above should have been appropriated to the acknoWledgment
sued on and not to the 'two acknO'.<Jledgments of debts in (iii)'
above. TIle court refused provis ional sentence and E appealed.
HELD, by the Natal Provincial Division, dismissing the appeal,
the undertaking to' consent to judgment in the acknowledgment of
debt sued on was not 'unenforceabie on the groLD1cls of public
policy: it had 'a certain legal effect; as the tmdertaking'in
such doct.nrent to pay costs on an attorney andelient basis·
including. collection charges was enforceable, the court of first
instance had been correct in holding that the acknowledgment of
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debt sued on was more onerous thaIl the others in' regard to which the
provis ional sl.llT1llX)nses had been withdrawn; further, as it had not
been proved that ITDra interes t had at~any time been claired by E
in respect of any cif the -acknowledgments of debt, no part of the
payments should have been appropriated thereto; the rule that
appropriation- ought to be, made towards the payment of interest
before it is made towards: the payrrent of the principa] debt
appYied only to interest \<Jhich had been agreed and not to m:mi
interest, ~hich was only due when claimed and it was ordered by
the court to be paid. . .

Macrae v National Bank of SA Ltd 1927 AD 62. A company known as

Baillie & M<lrtin Ltd being indebted to N in a large sum and
requiring further facilities, M and Transvaal Assets Ltd made
jointly two promissory nOtes for £500 in favour of B &-M Ltd.
B & }'1 Ltd endorsed' these notes and pledged them to N at the same
time. handing them to the bank for collection. The notes were
',not paid on due date. TA Ltd being als 0 indebte_d to N on an
overdraft, pledged with the bank certain· shares in security
therefor, ,at the same tine authorising N in writing to sell ilie.
securi,ties and apply the proceeds towards liquidating the rurOLD1t
due to ~ for th~ advance "or in any other neans· or upon any other ,
cause of debt, whatsoever an,d whether the same shall be due or not."
Thereafter, N in execution of a judgment against TA Ltd sold the
shares pledged \,ith it and appropriated the proceeds to the extin-
guishing of various liabilities of TA Ltd, but only £245 in
. diminution. of the DyO promissory notes Upon \<Jhich TA Ltd and M
 TERI"IINATION..oF CONTRACTS 177

were jointly liable. In an action by N to recover, from M the

balance due on the notes, the Transvaal Provincial Division had
upheld N's contention that it had'the right to extinguish what-
ever debt it plea$ed in as much as TA Ltd had in the form of
pledge referred to above, given it that power. M appealed. HELD,
dismissing the appeal, M was not entitled to claim that the debt
on the promissory notes should first be extinguished from the pro-
ceeds of the shares in the hands of N in as much as, the form of
pledge given by TA Ltd to N conferred on N the right to extin-
guish whatever debt it pleased. Wessels JA said: , "Now it is a
principleof,our law that where a debtor, who owes h{s creditor
different sums' of money upon different obligations, makes 11 pay-
rent to his creditors he can appropriate the money to any debt
he pleases, and 'if the creditor accepts the money he must '
allocate it to the selected debt. If, however, the debtor pays
money to his creditor and says nothing about the allocation then
the credi tor may then and there appropriate it to any particular
debt he chooses ,and gi've an acquittance to that effect. But if
neither debtor nor creditor says a word about how the money is to
be applied, the law steps in and allocates the money according to
artifi,cial rules to certain particular debts and inter alia it
wipes out'a debt earlier in time rather than a later one caeteris
paribus (other things being equal). The debtor may, however, at
any time before his debts become due give to the creditor the -
right to apply any monies of the debtor which should thereafter
come into his hands to whichever debt he pleases. 'If he does'
so the creditor is at liberty to apportion the money as he
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pleases."
Interest ceases to run When it }'eaches the amount of the capital
debt, but if a payment is afterwards made iwterest again 'runs
until it reaches the amount of the oapital. Interest will run
again, up to the amount of the capital, when jucigmetlt is given
against the debtor, notwithstanding the fact that interest has
already equalled the capitaL

Stroebel v Stroebel 1~73 (2) SA 137 (T). On l2'October 1968

defendant made a promissory note for Rll 061 with cOI11pOlmd
interest at 10 per cent per annum in favour of plaintiff. The
amount was payable on demand. On 12 September 1972 ,the interest
amounted to Rl2 649. Defendant failed to pay, the amount together
with .interest. In an application for judgment by default plain-
tiff claimed (1) payrrent of" an amount of R23 710 and (2) interest
thereon at the rate of 10 per cent pe:t:. annum from 13 ,September
1972 to date' of payment. HELD, as to (1), interest 'in excess of
the capital, amOunt was not ~laimable; as to' (2), the payrrent of
interest 01 the capital amount at the rate of io per cent per '
annum from date of judgment to date of payment be granted subject
to the amount of the unpilid interest not exceeding the capital
amount.,

]Ian Coppenhagen v ]Ian Coppenhagen 1947 (1) SA 576 (T). On 1

January 1933 V'f\\3.de a premiss'ory note for '£300 with interest at
10 per cent per 'annum in favour of his, brother. The note was
 17B THE ZIMBABWE LAW JOURNAL

due on 28 February. By th~ end of 1942 no payments had been

made and the arrear interest had become equal to, the capital sum .
V made payrrents. to his hrother to Febnmry 1945 totalling £54.
He was sued in October 1946 on the note for £300 capital and £300
interest. Provisional sentenc~ was pronounced for these' aJOOunts
and costs. V appealed contending that the claim for interest
should be reduced by the £54. HELD, the appeal should be dis-
missed. Millin J said: "It is clear . . . that when an aJOOunt
of arrear interest reaches the a.rrount of the capital, interest
ceases to run . . . There can never be more interest accumu-
la ted than an aJOOunt equal to the capital sum . .'. But the
rule that interes t may not be accumulated beyond the aJOOunt of the
capital, does not mean that if, by payment, the accumulated interest
is reduced to the aJOOunt 'less than the aJOOunt of capital, interest
does not again begin to run. Interest always runs until the aJOOunt
of the capital sum is reached and may again be accumulated up to' thE
aJOOunt of the capital."

2.5 Place of performance

in the contract.
'"
PerfoT'fl1a.nce must be madE at the place expressly or impliedly fixed
Where'no place has been fixed and the obligation
is to dEliver a thing, performance must be madE where the thing is.
Where ,money has to be paid, the creditor must seek out the debtor,
but if the money has to be paid by a fixed date, it is for the
debtor to take steps to pay the creditor in time.
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Ve~ter v Venter 1949 (1) SA 768 (AD). V had hired a portion of

a fann at Petrus ville in the Cape from his brother. The contract
of lease, "hich was executed at Philipstown, provided that the
, rent was to be £150 per year payable in arrear on 31 MiTCh each
year, and if it were not paid as stipulated in the lease, the
-- ~ landlord would be enti tIed to cancel the contract forth"i th. On
21 Mirch 1947 V paid £150 to the Petrusville branch' of the
Standard Ba.TJk with instructions to transfer it to the Cape Town
branch for the credit of his brother, who. was then Ii ving in Cape,
Town. The instructions were recei v'ed in Cape Town on 24 Mirch,
but by mistake the money was credited to anotner Venter. V sent
a telegram to' his brother on 28 Mirch saying that £150 had been
deposited to his account at the Standard Bank, Cape Town., The
brother's wife then went to the bank on various occasions 'on 29
and 31 Mirch and 1 April. On each occasion_she "as told that
no rooney had been deposited to her husband's account. After the
last enquiry, the brother sent a telegram to V stating that as '
the 'rent had not been paid.' he was cancelling the contract. - He
thereafter obtained a judgment from the Cape Provincial Division,
which was confinned on appeal to the full bench, ordering V's
ej ectment from the fann. V appealed. HELD, the appeal should
be dismissed.' Watermeyer CJ said: "If we tum to decisions of
South African courts we find several cases in Which it has been
held that if, in a contract \ihich does not fix a place for
payment, the debtor agrees to pay on or before a certain date- a
duty rests upon him to take steps to .make payment to the creditor
on or, before the due' date I agree with the view expressed
 TERMINATION or CONTRACTS 179

in ~~is decision. If a debtor undertakes to pay money on or

before a particular date it follows from that undertaking that
he must either tender or pay the money to his creditor in order
to avoid a breach of contract and he can do so at any convenient
place where he may lawfully perfolm his contract."

Where the debtor rrakes payment through ,the post, the following
rules apply -

(a) If in settlement of a~ debt a debtor posts a cheque to his

'creditor and the cheque is lost before it reaches the
creditor there is no payment of the obligation. /

(b) But if a creditor requests his debtor'to pay him by posting

, a cheque the debtor is considered to have discharged the.
debt as soon as he deposits a valid cheque in the post and
,the risk of loss is thereafter'on the creditor, but this is
subject to any qualification there rray be of the creditor's
request.

(c) By'requesting his debtor to pay by sending a cheque through

the post the creditor dOes not appoint the post office his
agent but simply authorises the manner of payment.

Greenfield Engineering Works, (Pty) Ltd v NKR Construction (pty)

Ltd 1978 (4) SA 901 (N). N was indebted to G in the sum' of
Rl 969,72 being the balance due in respe~t of materials supplied
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and work done on a contract. G's managing director wrote to N

requesting N to "forward a cheque for Rl 969,72 being the out-
stan~ing arrOlIDt, by return of post". N posted a letter to G
containing a cheque for that amount in which the payee was
inaccurately described as "Gr,eenfield Engineering Works" and
which, although crossed, was made payable to bearer and not to
order. ,The cheque never reached G. After it had been posted
it had somehow been intercept~d by a thief who opened an account
at a bank with 'it, stating that he was the sole partner in a
business of that name, in which name the account was opened.
Four days later the bank authorised encashment of a sight draft
for Rl 800, whereupon the thief had been paid Rl ,800 in caSh.
Two days later the cheque, of which the Rl 800 represented part
of the proceeds, had been met by N's bank on presentation. In
an action for payment of Rl,969, 72, the bank having agreed to pay
, G the bal3)}ce, judgment for Rl 800 was asked for. G based its
main claim on a demand for payment of the balance of the purchase
price, to which N pleaded payment.' HEL~, as to the main claim
and N's plea of payment in a~cordance with the letter requesting
payment by cheque, some qualification had to be read into its
express words ,and the question was whether the cheque had been
drawn in the ordinary and proper business fashion appropriate to
the amount; it was a tacit tenn in the agreement of the parties
that the cheque be sent by post that (1) the cheque should be
crossed, (2) it should name the payee as "Greenfield Engineering
Works (Pty) Ltd" and (3) the cheque should be drawn payable to
order; therefore,N had failed to discharge the onus of; proving
on a balance of probabilities its defence of payment of the money
and G was entitled to judgment for Rl 800.
 180 THE ZIMBABWE LAW JOURNAL

Dadoo & Sons Ltd v Administmto:r>, Tmnsvaal 1984 (2) SA 442 (T).
A had posted a cheque, crossed and marked 'no't negotiable', to
a Miss Collins. ine cheque was stolen and cashed with D by some
IX'rson unkno\\'Il, apparently impersonating C, and D aftelWards
received payment from A's- bankers in the ordinary way.' Where C
advised that she had 'not received the cheque, A sent her another
and sued D for the amount of the cheque as the true owner in
tenus of the Transvaal Bills of Exchange Proclamation of 1902.
A succeeded in the magistrate's court. 'D appealed contending
that A was not the true' Olffier of the cheque. HELD, by Blackwell
J, because C had given A an address in atolffi a fair distance
from the town where A's offices were, there was an implied
request that the cheque be posted to her; had it been an
ordinary matter of bus iness betl,'een two commercial firms or two
, private parties A would have discharged its obligations as soon
as the letter containing the c.heque had been placed in the pas t;
however, because both the Post Office and A were IEpartIrents of
State, the letter had never left the custody of the State and
therefore A remained the true owner. Rumpff J agreed that the
appeal should be dismissed, but considered that the mere fact
, that two parties lived in different towns did not constitute an
.implied request by the creditor to be paid by 'cheque through the
post, eve~ if he ,knew or expected that the debtor would send a
cheque through the post; there was on the evidence no specific
or implied request by C that the cheque should be posted to her;
A therefore remained the tnJe Olffier and was entitled to sue. '

Goldfields conf~ationeryand Bakery (Pty) ['td v N;nnan Admn (Pty)

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Ltd 1950 (2) SA 763 (T). N sent a statement of account which

.conta·ined its post office box number, telegraphic address, tele-
phone number a!ld blEiness address to G. G posted N a cheque for
. the amount of the account in response. The cheque, however,
never reached its destination; it was stolen in the post and
negotiated to a holder in due course who 'received payment of the
31TX)unt from. G' s bankers. When N sue/! for payment, G raised the
defence of payment. A magistrate's court rejected this defence
and gave judgment for N. G appealed contenaing that the cheque,
, enclosed in an enVelope addressed to N's post-office box, had
been posted, that it wa'> to be inferred that the envelope con-
taining the cheque had been duly placed in N's post-office box,
and that that had constituted due delivery and payment; alter-
natively, that'trJere had been a request or invitation to G to
pay by cheque and to send the cheque through the post, and there-
fore that the meTe posting of the envelope containing the cheque
'had constituted payment. HELD, diSmissing the appeal, as there
was no evidence that the letter had been addressed to a pos t-·offic
box, no inference could be' drawn'that it had reached the box;
further, even if it did· contain the post-office box'number, that
fact did not lead to an infe1"ence on the balance of probabili ties,
that the envelope had reached its destination; further, the
. sending of an account did not give rise to ~ implied'request
tha t payment should be through the post; further, the fact that
G had habitually for a longpetiod paid his account by sending
ch~ques through L~e post without 'obj~ction, did not. give rise to
 TERMINATION OF CONTRACTS 181

an impli'ed request to continue that practice; further, the fact

that.the account contained N's post-office box number and address
did not imply an invitation to remit by post, the question whether
such an invitation or reques t could be impJied having to be decided
on the facts of each caSe; further, it; was for the debtor to
choose his manner of payment: if he chose to use the post office
as his channel of commun5 cation, the risk of loss bet\,een posting
and'delivery remained \~ith him. Ramsbottom J said: ."There is
no dispute about the principle to be applied . . . The
principle is stated in Wessels on Contract (1 para 2234) in these
tenns: 'If a cheque is posted and lost hefore it reaches the
creditor, there is no payment of the obligation. But if the
creditor requests the debtor to pay him through the post by postal
order, cheque or other instrument, then it would'seem the creditor
must bear any loss \,hich results.' . . . ' The question in the
present case is\,tlether 'the printing of the post-office box number
at the head of the s ta tement Has a reques t to the defendant to
,send a remittance through the post to either the plaintiff's post-
office box or its office. 1 do not think it was a request to
send by pos t to either place . . . . 1 t is common Jrno.'lledge that
a great many business people in this country lease post-office '
boxes' from the post office, and that they have their box numbers
printed on their letter head and account foYms. Businessmen
would, '1 think, be greatly surprised if they Here to find that by
doing so they I"ere impliedly requesting their debtors who reside
in thes arne to\m to use the pos t office as a means of transmitting
lOOney, so that as soon as a debtor has dropped the envelope con-
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taining his cheque, correctly addressed and stamped, into a street

pillar box, his debt is paid.,"

2.6 Time of performance

The time of perforMance is dEteY'rnined by the ,express or implied

provisions of the con,tract.

For a full discussion of tenns as to ti1)18 of perfonnance 'see

1.1.1 in Part 3.

2.7 Prevention of performance

.where the creditor prevents or refuses to allOU! the perfoI'I7l::mce

by the dEbtor of a term of the contract upon the perfoY'rnance of
which the creditor's OU!n obligation dEpends, the debtor will be
deemed duly to have performed the term.,

East Asiatic Co Ltd v Hansen 1933 NPD 297. A finn Jrnown as

Service & Sales (Pt)') Ltd sold to H a refrigerating plant which
'I,as to be installed in a trawler. The purchase price was to
be paid in instalments: '£50 on the deli very of the. plant and the
completion of the installation, and £25 per month thereafter.
'\11e lOOnthly payments Here to begin after the plant had been
installed and 'run to Hansen' ssatisfactiori.· E thereafter hecaJre
parties to the contract in place of the original seller. 'H
 182 THE ZIMBABWE LAW JOURNAL

refused to ailow E to derronstrate the working of the plant and

thus prevented the company from nmning it to his ·satisfaction.
E sued him in the magistrate's court for the initial £50 and for
the first ronthly il15"talment -Of £25. The magistrate gran~ed abso-
- lution from the instance and E appealed. 'HELD, allowing the
appeal; the contractual term-that the company was to nm the·
, plant to H's satisfaction must be deemed to have been performed. -'

SECTION 3. MUTU],L AGREEMENT

3.1 Waiver

Waiver, sometimes known' as re lease, is an agreement in terms of

~hich the debtor is discharged. The. agreement may be implied,
b'ut the abandorunent of a right will not lightly J;;e inferred: it
must appeal" clearly from the parties ' ~ords 01' conduct.

Union Free State Mining and Finance Corporation Ltd v Union Free
State Gold and Diamond Corporation Ltd 1960 (4) SA S47 (W). In
an action for an order that it was. entitled to 10 per cent of all
the benefits derived and to be derived from certain options and.
prospecting contracts, the finance corporation' relied on a vernal
contract entered into by the parties, in 1948 conferring the rights
c1airredon Lt . .The mining corporation raised se.veral defences in
its plea and thereafter sought to amend its plea by adding a
further defence that the finance corporation had waived Or aban-
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doned all its claims against it under the contract referred to.
The finance corporation opposed the proposed amendment on the
ground that, if granted, it would disclose no defence. HELD,
the amendment should be granted. Munnik AJ said: " . . . in
order for.the release, waiver or abandonment to be effective
there must be an acceptance thereof by the debtor. This
acceptance may either be express or implied from·the debtor's
conduct. .In my view when the defendant alleges that
the plaintiff waived or abandoned all its claims or released the
defendant from its obligations there is inherent in the use of
these expressions, an implication that s],lCh waiver, refe~e or
abandonment was perfected by acceptance either express or tacit
on the part of the defendant."

Lanfear v Du Toit 1943 AD S9. A collision having occurred ,

between a car, driven by L and one driven by'D, L demanded payment
of a certain sum as damages. - D admitted that the collis ion had
occurred as a result of his negligence, but intimated that the
arrount claimed was excessive. After, further correspondence, in
response to a reqtest ,by D L furnished particulars of the damages
totalling £64 11s. Thereafter D's attorneys wrote under the
heading "Re J du Toit ats G Lanfear" that they enclosed a cheque
for £64 11s "in full and final settlement of the above matter."
L's attorneys acknowledge.d· the letter and enclosed a receipt
reading "Received from . . . the sum of sixty-five pounds eleven
shi~lirigs being in full and final settlement, G Lanfear v du Toit.
 TERMINATION OF CONTRACTS 183

Several days later a serious injury to L's eye manifested itself,

such injury having been caused by the collision. To a claim for
damages for s"uch injury, D pleaded in bar that upon the facts set
out above L was not enti !led to recover the sum claimed. This
plea having .succeeded, L appealed. HELD, dismissing the appeal,
upon a true interpretation of the contract, as disclosed in the
letters and tne receipt, the parties intended to arrive at
finali ty in respect of the obligation owed by D to L, viz the
obligation to pay damages, and the fact that L would never have
entered into such contract had he been aware of the injury to
his eye was immaterial.

The creditor can only effectively waive a right if he has full

kna»ledge of the righ·t; if he pv..rports to ·waive it whi le ignorant
of its extent even as a result of ignorance of the'lCJhJ the waiver
is ineffective, despite the :rule igr.orantia juris haud excusat
(ignorance of the law is no excuse), provided the ignDrunce is
probahZe and justifiahle.

'Van der MeY'-,-'e v Die Meester·e~ 'n 'ander 1967 (2) SA 714 (SWA).
In an action instituted by V, .executrix testamentary in the
estate of her late spouse, for an order declaring their joint
will invalid on the ground that the testator had not signed such
document in the presence of two witnesses who were' present· at the
same time, the curator ad litem to the minor heirs took the defence
that V had accepted the will and abided by its terms. It appeared
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that V, with knowledge of the circumstances under which the will

was .granted, had signed an adiation certificate, had given a
receipt for the inheritance as usufructuary in terms of the will,
and had only initiated the action n,o years after the death of
the testator. According to the evidence V was a person who had
very little business knowledge and a poor understanding of business
matters. All the assets in the estate were still intact. HELD,
in the circumstances the court could excuse the ignorance and the
will should be declared invalid. . .

Hepner .v Roodepoort-M2raisburg Town Council 1962 (4) SA 772 (AD)._

This appeal turned upon the single issue, raised by way of
exception and motion to strike out in the court below (the Wit-
watersrand Local Division), whether or not R was, in terms of the
Transvaal local G::>vemrrent Ordinance, read with its staff regula-
tions, entitled to terminate H's services as a pennanent eqlloyer.
upon one month's notice. According to the Ordinance, a Municipal
Council was empowered to appoint such officers as it might con-
sider necessary and ''lfiless it shall be otheIWise stipulated 'in
the contract with or in the appoint:rrent of an officer of the.
council, it may at any time remove such officer upon notice of
not less than one month or, in case of misconduct, immediately
without notice. II R's Staff Regulations were incorporated in and
form part of its contract of eqlloyment with H. A clause dealt
wi th grounds for termination of service, ,,,hich H contended were
intended to be exhaustive;· they did not include termination of
employment upon one 'month's notice. The question'was whether by
these Regulations,
~ . as so incorporated,
, the parties have, . for _the
 184 THE Z!MBABWE LAW JOURNAL

purposes of the Ordinance, "otJ1en"ise stipulated".' The court

below held that they had not done so and H appealed. HELD, ,dis-
missing the appeal, R's Staff Regulations, as embodied in H's
contract of service, could not be said clearly to exclude, R's
right under tJ1e Ordinance to ielT'Ove him from office by a IT'Onth IS
notice. Steyn c.J said: " . . . be'cause such a stipulation
would involve the abandonment or waiver of a statutory right of
dismissal by the respondent, the parties cannot be held to have
stipulated othen'iise, lD1less' they have done so, in expr.ess tenns
or by necess,ary implication . . . In the ordinary case of
waiver, the facta probandn (facts to be proved) would be full
knowledge of the rights in question and express waiver or waiver'
by 'plainly inconsis tent conduct, i.e. knowledge of a particular'
kind 'and sD-rrender of the right in a particular manner, ,The
existence of these' requires no strongey proof than a balance of
probabilities. \\'hether or not conduct so proved is plainly
inconsistent with the continuance of the right, would' be a matter
for inference by the court from the nature of the ,conduct proved. Ii

3.2 Novation

Novation takee p[ace whe!'e the pa.Y'ties to a co'ntY'act agY'ee to

replace it· corrrpletely with a new contY'aat.' Such agpeement may
be express' o~ inferred from all the,ciY'cumstances of the cqse:
T'ne court will, not Lightly infeY' a novation: it uJilZ do so only
,if .the circumstances Y'aise such a necessary inference. -
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Electric Process, Engmving and Stereo Corrrpany v Irwin 1940 AD

220. In an action for damages for breach 10f contract on~ of the
ques tions, to be decided, because ofa certai1). Natal rule of
,evidence; was whether a cOht~act had been novated. I had con-
tracted with E in London to wOTk as a line and tone etcher in
Durban for two years at a salary of £8 per week. ,On his arrival
in ,Durban I found that he was expected to do extra I.ork not
falling lD1der the agreement. It was arranged that he would be
paid an additional £1 peT week far this extra l'iork. After some
m::mths E dismissed I' who sued faT damages for breach of contract.
The Durban and eoast Local Division havjng given judgment for I,
E' appealed. HELD, dismissing the appeal, under the circumstances
there, had been nO'intention to novate the .agreement made in London
and two contracts' remained in exis tence, vi z. the London agreement
and the Durban agreeJ!l8nt. Ccnt1iVTes JA said: "The fiTst ques-'
tion is whether a novation of the, london agreement took place.
There is nothing !n the evidence to shol~ that the parties expressl
agreed to substitute the Durban agreement for the London agreement
If, theTe£ore, a novation took place it can only be inferred, The
law on the subject was clearly enunciated as far back as 1880 'in
the well-known case of Ewers v The Resident M2gistrate of Olidts-
hooPn and 'Another (1880) Foord 32, Hhere De Villiers CJ said:
'The result of the authorities is that the question is one of
intention and that, in the absence of any express deClaTatiQn,of
the parties, the intention to effect i novation cannot be held
• to exist except by way of necessary inference from all the ci r-
cumstances of the case' . . . Can such a necessary inference
be drawn from the circumstances of this case? In my opiniOll the
 TERMINATION OF CONTRACTS 185

answer is in the negative."

Williams V Atkinsons Motor Garage Ltd 1933 OPD 7'2. IV owed A

£.17, being the price of goods sold and deli vered, when he passed
a .bond in favour of A and three other creditors for..£224, in
which sum W declared himself in ,the bond to be indebted to them.
W further unde"Ttoo)< in the bond to !Jay th is sum to the four
credi tors in the several arrounts DIving to them, including the £.17
due to A, 'ljith interest at 8 per cent per annum from 1 July 1931,
the total amunt including the interest to be payable in mnthly
instaments of £5. Failure to pay any instalment Dunctually'
rendered the total debt \-li th interest immediately claimble. A
sued Wi in armgist:r;-ate 's court for payment of £14 8s 9d as the
balance of the purchase price of the goods sold and delivered.
The rmgistrate having given judgnent for that allOlmt, Wappealed.
HELD, allowing the appeal, the Dond novated the original debt
and the rmgistrate should have granted absolution from the instance.
Botha, J said: "Inl11}:" opinion the terms of the bond clearly con-
stitute a novation of the debt."

'Baartman & Co v Kirsten 1933 OPD 18. B sold a mtor car .to K on
7 October 1931 for £60, £3) payable on 3 December and £30 on 7
April 1932. It was a condition of the sale that the car' should
remain B' s property until the full arrount of the purchase price
, should be paid. . For the first instalment K endorsed over to B
a promissory note in his favour for £68 lOs by one Ferreira
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payable on 3 December 1931, it being agreed that the balance of

£.38 lCS should be refunded to him by B. For the second' inStal-
ment K gave a promissory note for £.30 due on 7 April 1932. On
. 26 October 1931 a new agreement was entered into. The purchase
price of the car was reduced to £.55 and B gave a promissory note
for £13 10e agreeing to retain F's note for £68 ·10s without any
obligation to refund any part of it. B then sent K's note for
£.30 to· their agent to be handed back to K. F dishonoured his
note on 3 December and B first gave him an extension .of tine·and
then took proceedings against him, When sued by B, K contended
that there "las a cOll1llete novation, sb that the original agree-
ment, together with its suspensive condition as to the pasSing of
the ownership was novated, and that F's note was accepted as pay-
ment of his indebtedness. HELD, dismissing B's appeal from
Lhe judgrrent of a magistrate, from all. the circumstances ,the
defence of novation had been established, there being proof of
" the necessary in.fenmce of intention to ,novate the original agree-
rrent for the sale of the car and to substitute an undertaking by
B to reduce the purchase price ·to £55 and to acc~pt the note for
£68 lOa in payment, releasing K from his indebtedness and
becoming indebt,ed for the difference betwe~n £.55 and £68 lOs.

Delegation and assignment are' forms of novation, but not cession.

(See 2. Z'. 2 in Part 3. for a full discussion).

3,3 Compromise

Compromise '&s an agreement for the settlement of a matter in

 1B6 THE ZIMBABWE LAW JOURNAL

dispute, each partzJ abafing some of his previous c'U3mands. It is

in nearly all respects similar to novation and is indeed by many
writers treated as a fonn of novation.' There is, however, an
important distinction: there can be no novation luithout a valid
original contract; in the case of compromise the origiY.al· claim
it is sought to supersede may be doubtful or uncertain. .

Cachalia v Harberer & Co 1905 1'5 457. C ordered from H, who

were merchants trading at Hamburg, two consignments of goods to
be supplied to Durban. Payment was to be by drafts payable
against delivery of the bills of lading. The first consignment
was duly delivered and the purchase price paid. On the arrival
of the second consignment at Durban drafts were presented to C,
who refused to' accept them on the ground that the first consign-
mentwas not according to order, and that he wished to ·have an
opportuni ty of examining the goods. C was sued in the magis-.
trate's court for the price, and on 26 September 1904 a settle-
ment, which was not entered .upon the record, was arrived at in
court. The terms were that C should pay the costs of the action
and give a promissory note for the purchase price at 30 days in
favour of Drabbe & CO; HIs agents, who were not to negotiate the
note,· and the bills of lading were to be immediately handed over
to C to enable. him to get the goods up from DUrban and examine
them at Pretoria within the month. If he found that they were
not according to order he was to have against D any defence which
he WOuld. have had ·against H. H failed to hand over the bills of
lading, and On 17 October C claimed the return of the promissory
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note and repudiated the purchase of the undelivered goods.. H

then brought the goods up from Durban and tendered them to C,
who refused to accept them or pay the promissory note. Subse-
quently D sued C on the note, but failed. H then sued C on the
original contract, and were met by the defence that a settlement
had been arried at and the rights of the parties must be regulate(
by the terms of that settlement. Judgment was given in the
magistrate's. court for H.and C appealed. HELD, allowing the
appeal,. the above facts 'constituted a valid transactio (compro-
mise) even though the settlement was extra-ju<;licial and the defen(
was good. Solorrcn J said: "rbw what is a traJ1Sactio? I take
the definition given by Grotius, who defines it as an agreement
between litigants for the settlement of a matter in dispute . .
The authorities seem to me clear . . . that a transactio may be
. either a judicial one, which is entered in the records of the
Court, or may be extra-judicial, but that the effect is the same.
A compromise l>'hether embodied in a, judgment of the 'Court or extra'
judicial has. the effect of res judicata (a matter is decided), an(
is an absolute defence to an action on the original contract."

Where a debtor tenders less than the amount the creditor considert
to be due, the creditor must consider whether he is' being offered
performance, i.e. payment, OT' a compromise. In either case the
debtor may have used the luords 'in full settlement' so the words
in themselves are not conclusive. If payment is made the .
creditor can accept the amount and later claim the balance becaus(
the debtor cannot vary the terms of his contract unilaterally by
 , TERMINATION or CONTRACTS 187

adding'a condition'that no more may be claimed, i.e. that the

payment is in full sett1e~ent;' .if there is an offer of a com-
promise and that offer> is accepted "then no further cZaim is
possibZe.
In Harris v Pieters (below) De Vi11iers JA explained the pOsition
as' follows: ''Now 'the phrase 'in full settlement' is ambiguous
and may mean one of two things. ' A debtor, in offering a s urn in
full settlement may intend to tender the- amount uncondi tionally ,
only adding the words 'in "full settlement' by way of emphasising
his contention that the amount tendered covers the whole of his
liability. In that case the offer is .made aniiro solvendi (with
the intention of paying) . Or he may intend to offer the amount
on Condition that the creditor'by acceptihg it shOuld forego his
claim for the ba1ance. In the latter Case the offer is 'made
for the purpose of entering into a new contract with the credi tor,
animo 'contrahendi (with the intention of entering into an agree-
ment) therefore. I f this is clear from the terms of the offer
'and the creditor accepts the offer on those terms he cannot, of
course, proceed [\ojith his cla'im for the balance J"
The difference between payment and conpromise is illustrated ,by
the follOWing cases - '
, \ '

AndY's EZectPicaZ v Laurie Sykes (PtyJ Ltd 1979 (3) SA 341 (N).
A was enp10yed by L to install electric wiring in buildings which
L was busy constructing. A had been paid certain amounts, but
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maint~ined it was entitled to more, and consequently sent L a

statement of account. L paid',A the amount of R814,91 by means
of a cheq\E (this \~as iess than the amount iii. A's statement)"
The cheque was accompanied by a letter to A, in' which L called
the statement ridiculous, reconstructed it, and ended with the
sentence "Please find our cheque in full settlement of your
accoUnt". A received the cheque and'letter, deposited the
cheque which was duly met and kept the money, and in the meantime
acknowledged its receipt of the amount concerned ''without preju-
dice to further rights". HELD, the conc1uding'sentence of L's
letter nrust be construed as an offer of compromise and conse-
qoontly A's deposit of the cheque and appropriation of the pro-
ceeds amounted to its acceptence despite A's bid to ward off
that result with the words ''without prejudice to further rights".
BarcZays NationaZ Bank v Waisbrod 1975 (1) SA 45 (D). As Wwas
in financial difficulties a letter was written to B, one of the
credi torS, which contained an offer to pay B a pro rata share of
an amount available for distribution in full and final settlement
of his liability to B. B neither accepted nor rejected the
offer. Later a second letter Was sent to the creditors with the
intention that they should compromise their claims by accepting
in full settlement an irranediate pro -rata distribution of an
amount realised from the sale of certain of W's ass"ets. Under
coVer thereof B was sent a cheqoo, receipt of which \~as acknow-
ledged. As the result of a letter sent by B to W a "second
cheque was 'sent to B which was a pro rate payment in terms of the
 1BB Tr~ ZIMBABWE LAW JOURNAL

two let.ters and it was accepted by B without any s'ort of reser-

vation. .In an action by B for payment of the balance of the
debt due to it by \II, B contended that the second letter .read
alone did not convey that it was -intended to compromise. HELD,-
the first two letters sent to the creditors had to be read
together, and B should have appreciated that the second,letter
was also. an offer of cOrrq:Jromise; further, by accepting the two
cheques B had lost its ri"ght to claim the balance of the debt .

. Ceci l Jacobs (Pt;y) L~d v Macleod & Sane 1966 (4) SA 41 (N). After
negotiations between C and 1>1 in respect of an amount alleged to be
-due by M for extra work done in a building contract, M addressed'
a letter to C in which he stated "tlpt the charges for the extra
work were excessive. However, in ordeT to reach finality, we
tender herewith our cheque in your favour for Rl 099,57 in full
and final 'settlement of your claim", which was Rl 438,72. C made
out a receipt for the amount tendered, marking it "on a/ c without
prejudice", cashed the cheque and received the proceeds. Fl ve
days later C wrote cl"aiming that the anmint of the cheq~ had
merely been ''paid on account", and enclosing the receipt. C
had then unsuccessfully ~ued in a magistrate's court for tile
balance due. HELD, dismissing C's'appeal, M's letter had been
an offer to cOrrqJromise the dispute at the aJOOunt· tendered and by
cashing the cheque and keeping .the money C had accepted the offer
of a cOrrq:Jromise.
"-
Harris v Pieters 1920 AD 644 (on' appeal from SR) . P bought goods
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from H/over -a period of six months, and at a time when the only
out?tanding items on the a~count were £125, 6s 7d (goods purchased
in September 1918) and £12 .18s 10d (the price of certa~n cases of
asparagus supplied in July 1918 but claimed by P ,to be unfit for
consumption), P sent H a cheque for £125 6s 7d "in full settle-
ment of your account". H cashed the cheq~, but at the sarre time
wrote to P demanding payment of the balance of £12 18s 10d under
threat of legal proceedings. P replied that he had already sent
a cheque in full setelement and that h~ was prepared to defend_- '
any such proceedings. A nngistrate gaye judgnent for H for the
amount claimed, but P appealed successfully to the High Court of
Southern Rhodesia. H then appealed to tile Appellate Division.
'HELD, allowing the appeal, in the circumstances of the cas_e, H
by utilising the cheque did not debar himself from claiming the
Qalanceof the account. '

A' oompromise agreement, onoe entered into, preoludes an aotion

on the original oause of debt, exoept where the oompromise speci-
fioally or by olear. imp lioation provides that the original olaim
shall revive in the event of the non-performance of the terms of
the oompromise.

Van Zy l v Niemi:mn 1964 (4) SA 661 (AD). V sued N in tile Orange

Free State Provlncial Division for the repayment of certain sums
of IItmey paid by him to N as a'dvances in respect of a boring con-
tract which N later refused to carry out. In his evidence,
however, it appeared tIlat he relied not on his original cause of
 TERMINATION or CONTRACTS 189

action but on a settlement which he and N had later agreed upon.

Absolution from the instance having been granted, V appealed.
HELD, the majority of the Appellate Division finding that there
was 'nothing to be found in V"s evidence whereby he, on Ws non-
compliance with the provisions of the settlement, woUld be
entitled,to fall back upon the original right of action, the
appeal should be dismissed. Botha JA said: "It is clear that
a con~romise has the same effect as res judicata (a matter is
decided), and,accordingly excludes an action on the original cause
of debt . . . except where the compromise' expressly or by clear
implicatio~ provides that on the non-fulfilment of its terms a
party may fall back on his original right of action.. . . I
can find' nothing in the evidence of the appellant as to the settle-
ment as a result of which he would be entitled, on the non-fulfil-
, ment by the respondent of the terms of the settlement, to fall
back on his original right of action. He does not allege an
express stipulation to this effect, and there is nothing in his
evidence from which, such a stipulation can be implied "

SECTION 4. OPERATION OF LAW

4.1 Set-off

Where WO pei'soY'.S are in debt to each othei', the debts ai'e auto-
maticaUy extinguished if' they are ,of the same amount Oi', if one
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is Zai'gei' than the othei', the smallei' is extinguished and the

lai'gei' i'educed by the amount of the smaUei' debt,- provided to
quote ,van der L~ndEm (1.18,4) -

,'.'(1) That the thing. du,e is of the' same kind as the

subject of the debt against which it is set off;
fOI1,illijtance, one can set off ooney ag<),inst ooney,
but not ooney 'against grain~ ,

(2) That the ~bt which is set off is such that the
time of ,payment has ai'rived. '

(3) That the deb,t which is set off is liquid (oore

correctll:', liquidated).,

(4) That the debt is due to the way pei'son who has
i'eCOUi'se to the set-off.

(5) That the debt which is set off is due by the very
pei'son against whom it is desired to set it off."

TUi'fontein Boerdery (Edms) Bpk v' Weber 1974 (3) SA 445 (C). T,
the seller of imrrovable property, sued W, the pUI1Chaser, for can-
cellation of the deed of sale on breach of the forfeiture clause,
age]1t's commission and damages. It appeared that the aTOClunt
claimed in respect of agent's commission, which allDunt was payable
on cancellation in terms of the deed of sale, exceeded the sum
 190 THE ZIMBABWE LAW JO~RNAL

total of the amounts paid by W in respect of the 'purchase price.

!"£ELD, T was not pbliged to plead a tender to restore,such pay-
rrents, the agent's col11l)1iss ion was a liquidated claim and capable
Of absorbing, by compensatio (set-off)', the stun total of the pay-
rrents in respect of the purchase price. Baker.J said:. "For the
pUlposes of compensatio or set-off a debt is liquidated when its
exact ITPney vaiue is certain, or 'when the aJTPunt is admitted by
the debtor, or, even' if the claim be disputed by the debtor, when,
it is of such a nature that the accuracy of the aJTPunt can be
clearly and promptly established by proof in COurt .' . . "

In !'e Trans-AfriClan Assuranoe Co Ltd (in liquidation) 1958 (4)

SA 324 (W). On 27 Lecenber'1956 T had been placed under provi-
sional judicial lTlanageJ11l.rt and on 18 July 1957 the Winding-up
order had been granted. On 14 Decemt-er 1956 T's directors
acting under-the provisions of the articles of association had
made a' final call of 2s per share upon the shareholders, which
caU had ,to be paid off not later than 11 JanuaIj' 1957. As
nothing had been paid, however, the liquidators had now prepared
a list of contributories whi~~ contained the narres of the share-
holders and reflected the liability of each in respect of this .
final call. In an application to settle this list in terms of
the Conpanies Act, one of the shareholders objected to lts
inclusion in the list on the ground that when the .call became
. due and payable on 11 JanuaIj', Towed it an equivalent· aJTPunt,
which was liquidated and certain, and it was contended that set-
off operated. 'HELD, set-off had operated al,ltomatically on 11
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JanuaIj' and the one debt had extinguished the other; accordingly,
the obj ector should not be included in the l~st. . Boshoff J said:
"Set- off or cOl1llensation by our law is really equivalent to pay-
rrent: it operates ipso facto (in the .fact itself) as a discharge.
So soon as there are two debts in existence, between which there
is mutuality, so that the one can be cOl1llensated against the
other, then by operation of law the one debt .extinguishes the
other pro tanto (for'so nruch) , . , , AI though conpensation
I1U.ISt be pleaded and proved in order that the Court may give
effect to it,' its operation dates back to the ITPrrent when the
interested' parties were reciprocally liable to one another. At
that ITPrrent in intenclroont of law they are regarded as having paid
each the other's claim with his 'own, so far as it would go ••
A party may claim'as of right that his adversaIj"s demand has
been extinguished by a liquid debt' due to him. . . " .
Lester Investments (Pty) Ltd v Narshi 1951 (2) SA 464 (C). When
a landlord" L, ,applied for ~ order of ejectrrent for failure to
pay rent within seven days of due date, the statutoIj' tenant, N,
averred that, as L owed him an amount expended on essential
repairs which L had despite demand failed to carIj' out, his
indeb,tedness was extinguished by way of set-off. HELD, N's .
right to deduct the, expenses 'operated as a form of set-off and
operated from the date when a mutuality of debts was found to
exis!:; further" the· set-off operated-since L's indebtedness' was
liquid in the sense of being, readily ascertainaQ1e, viz. capable
of easy .and speedy
, proof; further, it· was not necessaIj' for N
 TERMINATION OF CONTRACTS 191

to infonn L before the debt be= due to him that he would set
up a claim of compensatio; further, the'set-off did not operate
only in respect of the rent 'for the m:mth when the claim for
repairs became due.
Packery v Padiachy 1929 TPD 231. Packery obtained on 13 tbvember
1928 a provisional order of sequestration against Padiachy. Con-
firmation of the order was opposed and the order discharged with
costs aga~nst Packery on 13 ~cember. On the same day he
preSented a fresh, peti tion making further allegations, and a pro-
vis ional order w,as granted against Padiachy on this petition.
On 21 ~cerrber the costs of the first application ·awarded against
Packery were taxed. Thereafter, confirmation of the provisional
order was opposed on the groUnd that Padiachy was entitled to
set off the amount of the taxed costs against Packery's claim.
HELD, the objection raised to the making of a final,order'failed
and a final order of sequestration should be made. Feetham J
said: '~ow, with regard to this question of set-off it is clear
there was no set-off at the date when this. petition was presented
, and the provisional order was-made. ' At that date the claim for
costs waS not a liquida:ted· claim because the amount had not been
determined, and could not be determined until the bill of costs
had been taxed. The provisional order was made on 13 ~cerrDer
and the respondent's estate was, therefore, under sequestration
from that date. That being the position on 21 ~cember when
this claim for costs became a liquidated -claim as a result of the
taxation, it was a claim which affected not the respondent
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himself, but the trustee in the estate, and that being so there
could be no 'set~off . •• . Not only must the two debts which
are to be set off againSt each other be liquidated debts, but
they must be due between the same parties. Here a third party
comes in, namely, the estate of the insolVent, and that alters
th'e situation and prevents ~et-off taking effect."
FOY'd Brothere v Clayton 1906 15 205. C sued F in the Wi twaters-
rand High Court fur £350 for· goods imported, charges and expenses.
F con~ended that the claim was wrongly framed, the charges
excessi ve and the goods not of the agreed quality; Judgment was
given fur C for £240. After the close of pleadings, but, before
the hearing, F issued SUlJlllI)ns against (:: in the niagistrate's court
for £30 for rent due. The case was heard the day 'after judgm':1nt
had been given in the High Court. -r: set off the judgment in his
favour. The magistrate dismissed the S1JlTD1l)ns. F appealed.-
HELD, allowing the appeal, the _claim in the High Court was not
of such a liquidated nature that it could be compensated against
, the claim for rent. Innes J said: "It is true that the fact
that a claim is disputed does not of itself prove that it is of
an unliquidated nature; but clearly that fact must often be a
very, important element in determining whether or not any parti-
cular claim is a liquidated one. Where a claim ,is disputed,
especially upon grounds which affect the very 1rasis upon which
it is framed, it can hardly be said to be of a liquidated nature.
unless its accuraCy can be clearly and promptly established.
Such uncertainty as existed in th~s matter appears to me fatal'

,/
 192 THE ZIMBABWE LAW JOURNAL

, to the existence-of a right of set-off 1,IDtil the disp'ilte is,

settled and the llllcertainty dispelled by the judgrrent of a com-
petent court. For these reasons, I do not think the magistrate
was justified upon the evidence before him in deciding that 'this,
disputed and complicated claim was of such a nat4re that . . .
it had the effect by operation of law of extinguishing the respon-
dent's liability for rent." Bristowe J speaking of C's High
Court action ·for £350 said: ''That was a liquidated claim in the
sense that the action was for a -liquidated sum; but it was not
really a liquidate'd claim, because on the fact of the proceedings
the' sum claimed by Clayton was .the alleged balcmce of an account
which had not been settled."

Treasure1'-General 1J Van Vuren 1905 1'5 582. The Goverrufent of

the Transvaal sued on a bond executed in favour of the Government
of the South African Republic.' Payment had not been demanded,
and the bond was not ,dUe at the date of annexation:· V sought to
set off an rurount due to -him by the late Government as salary for
,services rendered. HELD, there could be no compensatio unless
both debts were simultaneously due, no set-off took place against
the fonner Government, and as the existing Goverrurent, was:not
liable for the aoount claimed the defence must fail. Innes CJ
had this to say o~ set-off: "The .law·requires that a debt which
it is desired to oppose by way of set-off must be of a liquidated'
nature. It need not be liquid in the sense in which that word
is now used in our practice . . . i f not admi tted by the other
side i t muSt be capable of easy and speedy proof . . . a debt is
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liquidated when it is evident that i t is due, and to what aI1lJunt

. . . a disputed debt, cannot be opposed in compensation unless
the person who opposes it has proof at hand, and is in a position
to justify his claill) proniptly and summarily . . . The rule
is eleIrenta-ry that a debt which it is sought to oppose to another
by way of compensation must be fully due. In theo,ry of law the
two debtors pay one another not by cash, but by a reciprocal
cancellation of their respective ciaiffis·; and, in order that such'
an operation may take place, ·the debt proffered in satisfaction
of the other tmlSt be absolutely due at the OOIrent '... ,. Set-
off, like payment, should be pleaded and proved so that the court
may give effect to it;. but its oI*ration dates back to the
oorrent when the two persons conceriled were reciprocally. liable
to one another . . . At 'that JOOIrent in intendment of law
they are regarded as having paid each 'other the other'S claim
with his own, so' far as it ,would go. And for that process to
take place it is essential that 'both debts should be fully due
- "
4.2· Merger
,
Merger is the cont]Ur'rence of the debtor and creditor in the same
person and in respect of the same, obligation. The obligation
is automati'caZZy destroyed to the 'extent to which the concurrence
of the, oppoeing capacities renders it impossible to exist.
Innes CJ considered rrerger in ,the following ,terms in Grootch~aing
 TERMINATION or CONTRACTS 193

Salt Works Ltd v Van Tonder (belm,,):' "'," ,confusio (merger)'

. . . is the concurrence ,of D"O ~~lities or capacities in the
same person, whidl mutually destroy one another. In regard to
contractual obligations it is the concurrence of the debtor and
creditor'in the same person and in 'respect of the same obliga-
tion . . . . The tyj:li'cal example of confuSio . . . is the
case of a creditor becoming heir to his debtor or vice versa,.
But the same position is established whenever the ,creditor steps
into the shoes of his debtor by any title whidl renders him
subject to his debt . . . As 'to the consequences of
confusio there can be 'no doubt that speaking generally, it des-
troys the obligations in respect of whidl it operates. Pothier
(para 643) is clear upon the point. A person, he says, can
neither be his own creditor nor his own debtor. And if there
is no other debtor then the' debt is extinguished . . . But
the obligation is only destroyed to the extent to whidl the con-
currenc~ of the opposing capacities renders it impossible to
exis t . : . " . , ,

I-Erger occurred in the following cases -,

Gajraj v Hoosen 195~ (2) SA 630 (D)'. G let his property to a

lessee who sublet it to a sublessee, who ceded his rights to H.
In execution of a judgment against the'lessee, G attached his
ri·ghts under the lease, ~d at the sale in execution bought and
took cession of them. , G now applied for H's ejectment. It
was common cause that Hwas. in the same position as the sublessee.
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HELD; it was the lessee's right to claim occupation' that had. been
attached" sold and ceded to G and G had thereby become vested with
the right to claim occLipation from himself. Broom JP said: ,"This
is a typical case of confusiq; viz 'the concurrence of the debtor"
and creditor in the same person and in respect of the same obliga-
tion' . . . Thus the obligation is destroyed. The reciprocal
obligation in regard to 'the rent'cannot continue independently and
so must of necessity be destroyed as well. The;result is that
the lease is at an end, and the sublease goes ,with, it, as also .
respondent's right as the s_ublessee's ceSSionary . . . "
,
GT'OotchwaingSalt Works v Van Tonder,1920 AD 492. G hired part
of a farm from V"embracing a salt pan, and in terms of the agree-
rrent of lease enj oyed also certain rights over neighbouring
unleased land belonging to V, including a right of way and the
right to the free use of ~;'tQne and other materials in connection
wi th its salt business. After G' had exercised an option to, pur-
chase a portion of V's property, including the leased area and
obtained transfer of the land purchased, G sued V in the Cape
Provincial pivision for a declaration that the rights over the
adjoining property conferred.by the lease ,remained operative in
spite of the fact that G was now 'owner'of the leased property.
Judgrrent was given for V, and G appealed. HELD, .dismissingthe
'appeal', the rights over the adJoining ground had, come ,to an end.
Irmes CJ said: "We have to do here with the case of a lessee
who has become the mvner of the ·leased property ; and ,there can
be no doubt that under those circumstances the lease ceases to
exist."
 194 THE' ZIMBABWE LAW JOURNAL

Cape Times Ltd v GoldBrrrid 1913 WLD J:7. A bond was passed 'by
the Transvaal Printing and Publishing Company in favour of a
certain Lingbeek, and G and his wife botmd themselves as sureties
and co-prIncipal gebtors. Later the bond was ceded to G and he
in turn ceded it to C. In an action for provisional sentence" C
alleged that £400 and-interest was due and payable by reason of
non-payment of interest and monthly instalments in tenns of the
bond. G contended that his liability tmder the bond was extin-
guished at the time of the cessIon to him of the bond. HELD,
in the absence of evidence that G had either expressly or
impliedly tmdertaken any liability as, surety and co-principal
debtor, the cession to C did not revive such liabilities and C
had merely acquired G'S rights as mortgage creditor. Wessel~ J
said: "On this cession taking place the defendant became the
rrortgage, credi tor and all liability on his part as surety and co-
principal debtor ceased by opera,tion of law., It was impossible
for 'the defendant to be a debtor or surety to himself . . . _ .
Under 'these circumstances if the defendant were to cede to any
third parties his rights tmder the bond, then in law he only
!=edes his ri ghts as mortgage creditor. He would not cede any
r-ights as surety or co-principal debtor against himself unless
it appears that he expressly accepted such liability or unless it
appears from the documents executed at the time, that it mus t be
presumed that he intended to accept such liabi~i tyo"

4.3 Supervening impossibility oj'pe:rofonronC!e

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Ilhen performanqe of a oontractual ob l'igation becomes impossib le

of performance through vis rrujor (act of God or State) or casus
fortuitus -(inevitable accident), i.e. through ar; event wmch
cannot be avoided even if o:rodi nary , precautions are taken, the
obligation is in geneml discha:roged as it if had been impossible
from the incepti.on.' ,

Peters, FlaJrumn and Co v Kokstad MunicipaUty 1919 AD 427. P

contracted with K to light the town of Kokstad with acetylene gas
for a period of ye,!-rs. At 'a time when the contract had nearly
ten years still to rtm, the tWo'partners in the firm were interned
as enemy subjects, and their business was ordered by the Treasury
to be wotmd up, bya controller. After the light supply had been
discontinued, K sued in the Cape Provincial Division for £20 000
for breach of contract, and also for forfeiture, in terms of a
penalty clause in the contract, of the plant erected and installed'
by the partnership. The Court granted absolution from the instance
on the damages claim; but gave judgment for K on the forfeiture
claim. Both parties appealed. HELD, disallowing both the claims
made by K, the contract had come to an end and there had therefore
been no breach. Solomon ACJ said:' "By the civil law a contract _
is \~id if at the time of its inception its pe!formance is impos- '
-sible. " . $0 also where a contract has become impossible of
performance after it had been entered into the general rule was
that the position is then the same as if it had been impossible
from the beginning . . . the authorities are clear that i f a person
is prevented fromperfornq.ng his contract by vis major or casus
 TERMINATION OF CONTRACTS' 195

fortui tus, under \oJhich could be included such an act of State as

we are concerned within this appeal, he is discharged from
liability. "

Ii contruct is not terminated by supervening irrrpossibiZi ty of per--

fOT'mance in the follo~ing eil'cWTIstances -

a. Whel'e perfoJ:'rrIQnce has become impossible as a direct result

of the debtor's O1Jn wrongful ,act.

Gl'obbelool' NO v Bosch 1964 {3) SA 687 (E). In terms of an agree-

rrent between two partner,; the survivor was to succeed to everything
.\~hich had been held in partnership and the estate of the first-
dying was to receive the entire. proceeds of a life policy. On'
the death of the first-dyirrg the insurer legally repudiated liabi-
lity on the ground ·that he had incorrect "answers in,the proposal
fonn concerning the condition of his health. The executrix
testarrentary now applied for an order declaring that the survivor,
B, was not entitled to claim all th,e assets of the partnership, •
owing to the insurer not being legally liable to pay the insurance.
HELD, the agreement was not a sale and did not impose 01). the sur-
vivor any obligation to pay' a "price", viz the amount ,of the
- insurance; further, the loss resulting from the first-dying's
own act could not be invoked for the purpose of' discharging the
estate from its liability to B under the agreement.' O'Hagan J
said: " . . . the debtor is released only if the destruction
or loss ,is not due to his OlVfl act or negligence."
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Benjamin V Myers 1946 CPD 655. M let a garage to B. B under-

took that at all times he would have 'available for sale s'ufficient
supplies of such brands of petrol and oils as he was penni tted to
stock and sellon the premises in tenns' of the lease. On breach
of this undertaking M was entitled to cancel the lease. B ceased
so to hold and sell petrol and M cancelled the lease and sued for
B's ejectment. B pleaded that he had been prevented from
selling petrol by the Controller of Petrol. M replied that this
was a result of B's wrongful act. f-lELD, finding that"the Control-
ler had in fact pre:vented B from selling petrol but, had done so
because B had been found guilty of a breach of the relevant regu-
lations, the magistrate's judgment granting an order'of ejectment
should be upheld and B' s appeal dismissed_ Herbste:i'n A.I said:
"r£fendant cannot rely on a self-created impossibility.
In mY opinion the magistrate was correct in holding that the per-
formance of the contract was' made impossible as a direct result
of the defendant's own wrongful act."

FrenJ<.e,lv Ohlsson'~ Cape Breweries Ltd 1909 15 957. '0 became

lessee of certain hotel premise~, the licence of which was trans-
ferred to the conp~ subject to an undertaking to restore it to
the lessor, F, at the expiration of the lease. During the
currency of the lease the licensing court refuSed to renew the
licence. When F sued for damages on the ground that the reason
for the refusal was the default of 0, the Witwatersrand High
Court gave judgment for 0 because the, refusal could have been due
 196 THE ZIMBABWE LAW JOURNAL

to 0' s defaul Lor the unsui tabili tyo£, the premises and the onus
on 0 had been discha"bged by the evidence shOl"ing that the premise
were unsuitable. F appealed. HELD, allowing the appeal, in,
suing for damages for failure to retrans fer. the licence, F n'eed
nQt allege negligence on O's part, but the ol)us was on 0 to prove
that the loss was not due to its default; further; in order to
discharge such onuS it 'was not sufficient for 0 to show ,that the
licensing court had cancelled the licence, but there must be
proof that the decision was not due to '0' s default,

b. when the deb,tor has taken UDon himself the risk of perfor-
mance becoirring impossible . .

Hersman v Shapiro & Company 1926 TP~ 367. Hand S were rrerchant
dealers in com. Two contracts were made. towards the end of Apr
1925 under .whid1 H sold to S for deli vel)' in ~lay or June: (1)
. "1 000 bags No.1 grade white kaffir com", and (.2) "1 200 bags of
fair aVen~e quality white kaffir, corn". H failed to deliver an
S brought an action forclamages, having resold in England again!'Jt
thes~ contracts. and having had to pay daroges to his London'
buyers. The action succeeded in a magistrate's court against a
defence that perfonnanc-e. was inpossible "by reason of the total
failure, of the crops in the Union of white kaffi r com of the
- description sold" . H appealed. HELD,dismissing the appeal,
having regard to all the facts and circlIDlStances of the case. the
contract was a speculati ve one; further, it was an irrvlication
from such facts and circum;; tances that a total failure of the cra
~s a' risk which was, in the contemplation of the Parties, imd
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irrvos'sibili ty of perfonnance of the contract supervening on .such

failure was no defence to an action or damages for breach of con-
tract. Stratford J said: "looking at the matter of the contrac
. that itwas of a .speculative 'character and both parties ran \Vha t-
ever. commercial risk resulted from a rise or raIl, of the market
against them - I cannot think the conditions of things that have
happened is not a condition of things that mig\1t well have ,been
within the contemplation of the parties . . Therefore, on the part
'cular facts of .this case, I/am prepared to go the length of sayil'
that, looking at all the circlIDlStances surrounding. the making anc
.performing of tl'\is' contract, the, iJllllication of the contract is
that the defendant should not be relieved because of a~failure of
crops in the Union. And if that is the right implication to dra
from the facts and, circumstances of these contracts, then that
disposes of the defence of irrvossibility of performance."

Yodaike n v AngehrYl' and Pie l 1914 TPD 254. Y by contrac.t agreed

to supply A with a certain quantity of coal - two trucks of forty
tons each per \Veek - for a period of twelve m:mths. o."ing· to a
railway strike which might have continuea for an indefinite peric
, Y, although called upon to ful fil .the contract, was unable to
supply the coal required between 7 and· 15 January 1914 and notifi
A to that .effect. A thereupon cance-lled the contract. When Y
sued for damages, the magistrate found that A I"ere justified in
'canCelling the cont ract and Y could not receive darrages. Y appea
HELD, the appeal should he dismissed. Curlewis J said: "The
 TERMINATION OF CONTRACTS 197

,fact that the piaintiff was prevented by the strike from carrying
out his obligations is J"X) answer to the respondentS. That is a
ri?k which he took. upon himself when he entered into the contract,
and he had 'to bear the burden of that risk."

c. When performance is more difficuLt 01' (Jostly but not

impossib le ,
. ,

In,Hersman v Shapiro & Company (above) the appeal was also dis-
missed on the ground that an examination of the, evidence showed
that, while widespread rains had resulted in the discolouration
. of all kaffir corn,harvested after 'IS April so that it could not
be classified aS,white kaffir com, nevertheless there were sorre
supplies of white kaffir corn obtainable though not at ordinary
prices., Stratford J said: ''But I go further, on the actual
facts of the case, arid I agree with the lffigistrate in'his judg-
rrent when he finds that impossibility has not been proved . . .
lfuat one would like to know above all, when 'dealing with such a
defence as the non-existence of the thing which the defendant was
under obligation to supply" is l1hat induce merits ,or rewards the
defendant made iii order to call forth the article required. I f
he had offered, and told us that he had offered, fancy prices
lvhich would have teJlllted people who were keeping kaffir com for
seed and other pU11'oses, we might have concluded that these e,fforts
were really serious ones,' and that the 'cormrodity did not in fact
exist in South Africa. But no evidence of that sort has 'been
produCed. All the defendant appears to have. done was to find
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out . . '. whether it could be bought for the ordinary prices,

which would not hurt him ¥eIY seriously, 'That is no test of the
non-existence of the thing; if he had really offered fanciful
rewards, it might have called forth the offer of kaffir com on
the scale required. . . . The evidence shows that some samples
and some supplies of whi te kaffir corn were obtained at various
points.. They were not i!1 large quant'ities, it is true, but this .
indicates, that white kaffir corn was not non-existent, but only
very scarce, and people very lD1Willing to produce it upon th~
market. "
So too in Yodaiken v Angehr>n and Piel(above) Cur1ewis J said:
"Another point which appeals to rre in this matter is that, though
, the appeliant says he could not' get coal, it is clear from the
evidence that the respondents managed to obtain some from the
Cassel Coal Company ,and that there were 'other sources from which
the appellant could, have got coal. He, WOUld, of course, have
had to pay a higher price, but that did not make it impossible
for him to carry out his obligations; He would have had 'to carry
them out at a loss', but that would have been no answer to t.1-te
defendants' request to him to carry out his obligations."

Ward v Francis and others (1896) 8 HCG 82. Fhad lJl1.dertaken,

under ,a contract ,relating to the working of a mine, to haul and
wash, on an average, during each week, not less per day than S 000'
loads of 16 cubic feet each of diarrondi ferous grotmd. This was
,not done and on being sued 'by W for damages F pleaded ''that, owing
 198 THE ZIMBABWE LAW JOURNAL

to unforeseen and lIDavoidable calamity, they were prevented on

di vers dates and occasions from hauling and waShing the full com-
plement of loads agreed to; that is to say; O\~ing to (a). stoppage
through rain on divers dates: (b) unavoidable and unforeseen
accidents to their machinery; (c) lIDavoidable and imforeseen
falls of grolIDd in the said mine, impeding and delaying operations;
and (d) the existence of an unforeseen and unavoidable amolIDt of
floating reef and limestone capping in excess of the amolIDt' con-
templated by the parties at the date of the a,greerrent". W excepted
to the plea. HELD, the above paragraph in F's plea should be
struck out. The Court said: "Now the defendants say they were
prevent~d from hauling arid washing, owing to unavoidable calami-
ties, and the first. calami ty mentioned is that it sorretimes
rained, I do not think that I need say' anything about this;, it
seems too trivial for discussion. Then we are told that there ,
'were ce.rtain unavoidable accidents to machinery, falls 6f ground,
and encolIDters with lIDforeseen 'quanti ties of ground not diamondi-
ferous. I do not say that it is impossible that such a plea
might be raised in the, case of'acciDents of an entirely,ex~eptional
character, against the consequences of which; it wcisimpossihle to
provide, but in that case, if relief were sought, the plea would
have to be frared in a much stronger manner than that to which
exception has been taken."
d., Where the impossibility is paT'tial, in whiph case the
ob ligation renuins in existence in so faT' as the paT't
that is:sti U possible is conc2r>ned.
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Stansfeld v Kuhn 1940 NPD 238. K agreed to sell S a piece of

land 'fronting on the national road half an acre in extent. After
demarcation of the road there was available a piece, of land
fronting on the road but it was .4 71 acres in extent only. When
S sued for specific performance, K applied for absolution from
the instance because of iITqXlssibility of perfonnance. This was
refused ,in an earlier 'hearing (1940 NPD 84) when Broom J held
performance was not impossible as coritended by K but it was a
case of impossibility ,to perform in toto (entirely) and S as
creditor, was entitled to say, as he did, that he would be satis-
fied to take what was left in satisfaction of K's obligation.
HELD, granting, an order for specific performance, 'iITqXlss ibili ty
of performance was partial only and as sUbstantial performance of
the -o,bligation was still- possible the contract was valid. Broom,
-J said in the first hearing: ''No authority was cited for the
prorosi tion that a contract is extinguished when it becorres
impossible for one party to perform in toto. In fact there is
authori ty the other ,way . For instance, Pothier Obligations,
para 624, says that 'while extinction of the thing due extinguishes
the debt when the thing is wholly destroyed, i f any ,part remains,
the debt continues to s'ubsist so far as regards such part, and
Voet 46.3.11 s'ays that a creditor lffiydemand a portion of the debt
only. This seems to accord with common sense. / If ci rcums tances'
arise which ,make it iITqXlssible for the debtor to deliver the whole
of what he promised, the creditor must surely retain the .right to
say that he will be satisfied to take what is left in satisfaction
of the debtor's obligation.
 TERMINATION OF CONTRACTS 199

e. Where the debtor is onZy temporu1"':Zy disahled from ful-

fi lling his ob ligation.

Beretta v ,Rhodesia Railways Ltd 194_7(2:5 Skl075 (SR). B, who

had en1:e~d R's employrrent on 1 January 1907, was on 10 June 1940
interned solely because he was an Italian subject. ' He was
released on 4 February 1941. Prior to such release he had com-'
municated with R with regard to his position, and was inforncd
that in vie\~ of his intel1lJlent his employrrent had automatica,lly
terminated, and as he had'not qualified for a pension prior to
his interrurent he was -not ,enti tled to one in tenns of R's Regula-
tions. HELD, a contract of employrrent was not automatically
terminated by-the temporary inability of the,'servant to fulfil
his obligations thereunder but it might be terminated by the
employer if the inability persisted; further, the contract had
not been terminated by operation of law upon B' s internment nor
by the eontinuance of such internment. Tredgold J said:' ''The
law is clear that when a contract becomes finally and completely
impossible of performance by reason of an act of State it is dis-
charged. Peters, Flamman & Co v Kokstad Municipality (above)_
But this does not cover the situation in which one party is
teJl1lorarily disabled from fulfilling his undertaking . . . .
It is nowhere suggested that the immediate. effect of such temporary
disability is to end the contract, and this is not sUl:prising, for-
any such suggestion would involve consequences so extreme as to be
unthinkable. . . Upon a temporary disability _preventing'one
party from fulfilling his obligation the contract continues. If
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the disability persists for. a period which, jl!dge.d on the circlllT\-

stances of the particular case, renders it unreasonable that the
other party should continue bound ",hilst receiving no benefit
from the contract, such party is entitled to terminate'the con-
tract. The contract thereupon ends and the respe4.tive rights
and obligatiOns of the parties fall to be' determined at- the date
of his 'positive action \oJithout the co~licatioh of 'retroactive
action . " . It will th1:lS be seen that there is strong
reason for holding that on the authorities, as upon principle, a
contract of employrrent, is not automatically terminated by the '
temporary inability of the servant to fulfil his ob ligations '
thereunder, but that it Imy be terminated by the- employer i f the
inability persi~ts."

4.4 Extinctive prescription

In tems of the Prescl'iption Act, No 31 of 1975, a debt (s 13(-1),

and any subsidiary debt. arising ther>efrom (s lJ(2}), is ext~n­
guished after the l.apse of the 1"!Elevant period.

Although a debt is extinguished 'by proscription payment by the

debtor subsequent to that extinction is regarded as payment of
the debt (s 1J.rJ)(a)), and an agreement made by the debtor to
pay a debt after its.extinction,shaZZ be enforceable (s 13(J)(b)).

The A~t is siZent on the question of set-off and cession of pro-

scribed dEbts. As the debt is now extinguished by pr>escription_
 200 THE ZIMBABWE LAW JOURNAL

it seems clear that after, prescription such a 'debt cannot be set

off or ceded.. ..

A court may not of its own motion take notice o["prescription

(s 19(1)). Prescription should be pleaded by the party wishing
to invoke it, but provision is made' for a court to allow it to
be wised at 'any stage in the proceedings (s 19(2)).

4.4.1 Periods ;f prescription of 'debts

S 14 provides for the following periods of prescription -

J a) Thirty ,years in the case -of a debt secured by mortgage

bond, a judgment debt, a debt in respect of taxation, a
debt owed to the State in respect of the right to mine
,nri ne w Is or 0 the r subs tcinces . '

'(b) Fifteen years in the case of a dl!bt owed to the State ,in,
respect of an ,advance or loan of money or a sale or ,lease
of land lIDless the period of ,3~ years is applicable lIDder
(a) above.
\
(a) Six years in the case of a debt on a negotiable instru-
ment or notariat contract or owed to the State lIDless
the periods of, 30 or 15 ,years are' applicable lIDqer (a)
or (b)' above.
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(d) Three years in the case of any other debt lIDless another
period is provided by any enactJrent.

The periOds begin to run as soon as the debt is due (s 15(1)).

4.4'.2 Detay in the completion of prescription

Delay in the completion of prescription OCCU1'S where prescription

would in the ordinary course have been completed but certain '
impediments set out in s 16(1) exist. If the period of pre-
scription'would in the ordinary course have been comple'ted before,
on or within one year after the date on which the impediment ,
clEased to exist, the period-of prescription will not be compZeted
before a ylEar has eZapsed fro11J that date.

The impediments set out in. s 16(1) are -

(a) The creditor is a minor qr insane or a person lIDder

cUl'atorship or 'a' person whose hehaviour or physical or
mental condition justifies his being placed lIDder curator-
ship 'or is prevented by superior force or any enactment
or order of court from interrupting the rtmning of the
prescription in tenns of s 18(1) below, or is a juristic
person and the debtor is a member of the governing body
of s~h juristic 'person.
 TERMINATION OF CONTRACTS 201

(b) The creditor and the debtor are married to each other' or
are partners and the debt is adebt which arose out of
the partnership relationship.

ec) . The debtor is outside Zirrtabwe.

(d) 111e debt is the subj ect matter .qf a dispute submi ttcd to
arbitration, or is the subject matter of a claim filed
against the estate of a debtor who "is deceased or against
the insolvent' estate of a debtor or against a company in
liquidation or' against· an applicant under the Agricultural
ASsistance Schcme sct out in the Third Schedule to tlle
Agricultural Finance Corporation Act (Cap 101).

(e) The creditor or the debtor is deceased and an executor of

the estate in question has not yet been appointed.

S 16(2) pI'ovidei; that i f thne,'are rueiprucal debts .m--isirig out

of the same contract neitheI' can be extinguished by prescription
before, the. other.

S 16{ 3). pn:fvides that a debt anS'l-ng out of an advance OI' loan
made by an insurer, whether in I'espect of a life policy as defined
in the Insu:mnce Act (Cap 1913) issued by that insurer or securud
solely by the cession of such life policy to the insurur, shall
not becorre proscribed before the clebt arising out of such life
policy becomes prescribed. .
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4.4.3 InteI'ruption of pruscY'iption

If the debtor acknowledges the debt, exprussly oI'impliedly, the

running of prescription is interl"Upted (s 1'7(1)) and the period
begins again on the day on which the interruption takes place
(s 17(2) (a)) . If the paY'ties pos tpone the due date of lEi debt
the period begins again on the date on ~hich the debt again
becomes due (s 17.(2)(b)).

Prescription is also inteI'l"Upted by the seI'vice of· any process

whereby the creditor claims payment of the debt (8 18(1)). If
the debtor' does not acknO'.Jledge Uability and the creditor either
does not successfully prosecute his claim undeI' the process in
question to final judgment or if he does so prosecute his claim
, but abandons the judgment or the judgm(fnt'is set aside the inter-
ruption lapses (s 18(2)). If the debtor acknoWledges liability
and the creditor does not DY'Osecute his claim to final settlement,'
the rules given above. for ~cknowledgment of debt apply (s 18(;;)}.
If the debtor does not acknowledge liability and the cruditor is
successful in his action, pruscription begins to run again on the
day on which the judgment of the court becomes executab le (s 18( 4)))
but now being a judgment debt it runs for thirty years (s 14(2)).

4.5 InsC!lvency
 202 TH~ ZIMBABWE LAW JOURNAL

An insolvent's contractual rights and duties are affected' in

various ways by the sequestration of his estate. ~nerally, a
foT'm of compulsory assigrvnent takes place quite independent of
the will 01 the insolvent or persons who are in contractual -
relationship with him, even i f ?uch persons may in fact be res-
ponsible for the sequestrq.tion and the sequestration is for the
benefit of creditors. The insolvent's' rights and duties vest
automatically in the Master of the High Court unti I the appoint-
ment of a trustee when they vest in the tY"dStee (s 25 of the
Insolvency Act, Cap 203).

In general, the effect of sequestration on a contract entered int,

by the .insolvent and not yet discharged is th.at the trustee steps
into the insolvent's shoes without assuming.his legal identity.
If the tT'UEtee wishes .the contract to continue he must perform
the-insolvent's contractual duties in full and must notifY the
other party. If he does not notify him the other party may trea
the contract as repudiated and cldim as creditor for damages
suffered.

The In~~lvency Act, howeVer, provides for the setting aside of

certain transactions -

Ca) . Improper dispositions'

Sections 42 and 44-47 give the trustee power to sue for th

setting aside of dispositions without value, voidable pre-
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ferences, undue preferences and collusive. ,dealings.

(b) Sale of business

S 49 provides that; if the debtor was a trader and sold hi

business less than six months before sequestration, the
sale unless advertised as required by the Act is· void as
agaiIlst his creditors for six months following the sale an
as against his trustee.

(c) Purchasi'J of. immovable property

.S.50 provides that, where -a debtor has before sequestratio'

entered into a contract for the acquisition .of immovable
property and such property hfls not been transferred to him
the trustee may elect to adopt or abandon the contract and
if he does -not !i6 so, the seller may apply to the court fo
cance lla-tion ~

Cd) Cash sale-of movables

S 51 pro'\ii.des that such a ·sale to the insolvent completed

by delivery may.be set aside by ·the seller after sequestra
tion if the price has not been paid and the seller within
ten days of delivery has given written notice to the estat
of his intention to reclaim the property ..

...
 TERMINATION or CONTRACTS 203

(e) Contract of lease

In te:pns of s 53 a contract of leas,e where the insolvent

is the lessee is terminated automatically three months
after the appointrrent of the trustee if the trustee has
not notified the lessor that he desires to continue the
contract on hehalf of the estate.' But the insolvency of
"the lessor does not terminate a lease: the rights and
duties 'of the lessor are rrerely assigned to the tlustee.

(f) The sequestration of the employer's estate tenninates a

contract of employrrent: the employee may either take his
employer's sequest:ryItion as an iJl1Jl1ediate discharge or con-
tinue in the service of the insolvent estate until the end
of the ll'Onth or week (depending on whether he is eJ1l)loyed
hy the ll'Onth or week); he has a preferent claim for wages
under s 105. A contract of employrrent is unaffected hy
the insolvency of the employee unless the employrrent is in
the husiness, of a trader who is a general dealer or a manu-
facturer, in which case the employee requires the written
consent of his trustee (s 37(3)).

The rohohi Ii tation of an inso lvent has the effect of discharging

all debts due by, him before his seqliestrar;on which did not arise
out of any [raud on his part (s146).
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4.6 Death

As a general rule the death of a party to a contmct does not

terminate the contmct. ' As'in the case of insolvency, a fonn
of compulsory assignment takes place and the deceased'f rights
and duties, other than in terms of contmcts involU1~ng p'ersonal
ski ll, pass to the executor. Contract" invo lPing special per-
sonal qualities of the deceaEed are discharged by supeY'Vening
impossibilit:y. of perfonnance (see 4.3 ahove) .

'Lentz v Schroder's Estate 1955 (1) SA 366 (E). L sold S certain

iJlIDl)vahle property' on which he had. conducted a general dealer's
husiness. Clause 11 of the agreerrent provided that the sale was
condi tional 1.!Pon the trans fer. of the general dealer's patent and
propneiary rredicines and poison licences into S' s name. Occupa-
tion was to he given on 3 May. On 12 ~larch S died and, as his
estate had repudiated the sale, L issued summons to compel it to
take transfer and pay the purchase price. S excepted to L's
declara tion as disclosing no cause of action because it contained
no' allegation that the licences had heen trans fened into S' s
narre and S having died the condi tion ,in Clause 11 was imposs ih Ie
of fulfilment and the cmtract was therefore unenforceable. HELD,
dismissing the exception, as there was nothing in the agreerrent to
show that the rights and obligations should not be transmitted by
death, S t s rights and ohligations, inCluding the application for
the issue of the licences, passed on his death to his estate.
Jennett J said: "As there is nothing in the contract Ivhich shows
 /

204 THE ZIMBABWE LAW JOURNAL

"', that the nature of the rights and obligations arising' from it
involves a delictus persbnae (choice of person) or which shows
that it was not intended that such rights and liahilities should,
not be transmitted by death it follows that" 'without more" it is
not possible to say that the ordinary rule that such rights and-
liabilities 'are transmitted by deat.'l should not apply:'_'_

4.7 Estoppel

Where one pa:t'ty to a contract thmugh his 'conduct has led the
other to be lieve in the existence of a certain state of affairs,
for.exarrrp'le that he win not enforce a ,term orthe contmct
be "tuJeen them, and the other party :reasonah ly relying on the
representation so made has altered his position to his detriment,
he /h"ill be estopped from enfoT'Cing his contractual rights. '

Hauptfleisch v Caledon Div-isionol Cour.cil 1'163 (4) SA ,53 (C).

C had applied for an order declaring that H har! ~"J "ight to
occupy a certain dwelling house standing on a public space
created when the townwhip was established 'and ordering him to
vacate the property. - H had raised as 'defences that C was
estopped from claiming ejectment and was precluded from doing so
by reason of the exceptio doli. The facts upon whichH had
relied were that from 1948 onwards C had levied and ,collected
rates in respect of the . dwelling; that during the same period
C had collected rates in terms of the Vermin, Extermination Ordi-
nance; , and that plans for alterations and improvements to -'the
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chvelling had bee,n approved by C. The Cape Provincial Divisio.n

granted the application and H appeilled to,the Full Bench of the'
Provincial Division. IlELD, dismissing the appeal, as no repre-
sentations acknowledging H's right of occupation, either express
or by conduct, had been made by C, the defence of estoppel
failed; further, as it had not been shown that C's enforcement
of its legal rights ill respect of'the property should be regarded
as ,\=alising great inequity or as amounting to unconscionable con-
duct on C's part, the defence of exceptio doli also failed.
Corbett AJ like Tindall JA in ZUUI'bekom Ltd v Union Corporation
Dtd (see 3.2.6 b. in Part 3) was prepared to treat estoppel and
exceptio doli as separate defences: "It is not clear to rre that
this defenCe (excc;:ptio doli)' is ,substantially different from that
of estoppel . . . .but .I shall assume in appellant's favour that
conduct falling, short of that required to establish an estoppel
could found a defence based upon the exceptio doli." Earlier in
his judgment Corbett AJ had this to say on the requirements of
estoppe'l: ". . . . it may be emphasised that the representation,
must relate to a statement of an existing fact ; . , and that a
mere statement as to, for instance, a future intention will not;
found an estoppel " . . The representation may be made
eXpressly or by' conduct. It must be made with the intention
that it should be acted upon in the manner in which it was acted /
upon or the conduct of,the, representor mUst be such as to lead a
reasonable 'man to take the representation to be true and believe
that it was rreant that he should act upol1' i t in that manner
The person to whom the, representation ,was made must act
 TERMINATION OF CONTRACTS 205

thereon in the marmer intended and in doing so must alter his

position to his prejudice. He must act upon the representation
believing it to be true. I f he mows, or believes, that the
real facts are not as stated in the representation, he carmot be
heard to say that he was induced to act to his prejudice on the
fai th of the representation . . .

POOr't Sugar' Planter's (Pty) Ltd v Minister' of Lands 1963 (3) SA

352 (AD). P was the registered owner of certain farms granted
to one Wege by Crown grant, incorporating a clause stating that
the grant was subject to the right of the Governrrent at any time,
on due noti.ce being given, to resl.lITle the whole or any portion' of
the land. M had caused wri tten notice ,to be served on P stating
tha,t two of the farms' were required in connection with a speci fied
I(ater scherre 'and that the State had decided to resUJre these farms
in accordance with the resumption clause above. AS P refused to
gi ve up the farms, M'had unsuccess fully applied in the Natal Pro-
vincial Division fur an'order declaring the resumption clause
valiq. M had then successfully appealed to the Full Bench of
the Provincial Division which had pronoooced the clause valid
and ordered transfer against the comPensation tendered. P
appealed. HELD, dismissing the appeal, M was not estopped by
conduct from enforcing the clause'on the ground of certain letters
written on its behalf, asking for' options on the farms, because
such conduct copld ns>t rightly be regarded as' cqnduct which could
reasonably be expected to mislead P and becalise,P had failed to
discharge the onus on it of establishing that it had in fact been
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misled into thinking that M had abandoned its rights ooder the
clause. Ogilvie Thompson JA said: " . . . 'appellant contends
that respondent is nor-" estopped from enforcing the rest.D11ption
clause. In my judgrrent,'this contention cannot be sustained.
In the first place, even if the series of option-requests . . .
could -, contrary to my view as set out below - rightly be regar,ded
as a representation by respondent that the Government had abandoned
its rights 'ooder the resumption clause, it would still 'be necessary,
in order to foood an estoppel, for appellant to show that, acting
upon the, faith of such representation; it had altered its position
to its detrirrent."