Source:

South African Law Reports, The (1947 to date)/CHRONOLOGICAL LISTING OF CASES – January 1947 to February 2025/2020/Volume 5: 1 ­ 325
(September)/BEADICA 231 CC AND OTHERS v TRUSTEES, OREGON TRUST AND OTHERS 2020 (5) SA 247 (CC)

URL:
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BEADICA 231 CC AND OTHERS v TRUSTEES, OREGON TRUST AND OTHERS 2020 (5) SA 247 (CC)
2020 (5) SA p247

Citation 2020 (5) SA 247 (CC)

Case No CCT 109/19

[2020] ZACC 13

Court Constitutional Court

Judge Khampepe ADCJ, Froneman J, Jafta J, Madlanga J, Majiedt J, Mathopo AJ, Mhlantla J, Theron J, Tshiqi J and Victor AJ

Heard June 17, 2020

Judgment June 17, 2020

Counsel BJ Manca SC (with GGM Quixley) for the applicants.

J Muller SC (with HL du Toit) for the first and second respondents.

Annotations Link to Case Annotations

Flynote : Sleutelwoorde
Constitutional law — Common law — Development — Common­law principles of contract — Enforcement of contractual terms — Proper role of
fairness, reasonableness, good faith and ubuntu clarified — Constitution, s 39(2).
Constitutional law — Human rights — Right to equality — Equality in contract — Whether enforcement of contractual terms resulting in failure
of black economic empowerment initiative offending substantive equality — Constitution, s 9(2).
Contract — Enforcement — Public policy — Public policy grounds upon which court may refuse to enforce contractual terms — Proper role of
fairness, reasonableness, good faith and ubuntu clarified.
Headnote : Kopnota
The applicants were four close corporations (the franchisees) which owned and operated franchises under a franchise agreement for a 10­year
period. Its members were historically disadvantaged former employees of the franchisor. The franchisees obtained the funding to own and
operate the franchises by way of loans made by National Empowerment Fund (the Fund) under a cooperation agreement between it and the
franchisor, as part of a black economic empowerment initiative.
In terms of the franchise agreements, the franchises had to operated from approved premises, leased from the respondent, the Oregon Trust (of
which the franchisor's only member was also a trustee); and the franchisor had an election to terminate the agreements in the event that the
franchisees were ejected from the approved locations, or if the lease agreements in respect of the approved locations were terminated.
The lease agreement between the franchisees and the Trust was for a period of five years, with an option to renew the lease agreement for a
further five years. When the renewal options were not exercised within the required notice periods — three of the franchisees attempting to do
so after the notice period had lapsed — the Trust demanded that they vacate the premises. In response, the franchisees approached the High
Court for a declaratory

2020 (5) SA p248

order that the renewal options had been validly exercised, and that the Trust be prohibited from taking steps to evict them.
The High Court, relying on its interpretation of the Constitutional Court's decision in Botha (annotated below) — that it introduced a principle
that the sanction for breach must be proportionate to the consequences of the breach — granted the application on the basis that termination
of the leases would result in a disproportionate sanction, because the termination of the franchise agreements would collapse the franchisees'
business and lead to the failure of a black empowerment initiative.
In the Trust's appeal, the Supreme Court of Appeal rejected the notion of proportionality, confirming that courts may only decline to enforce
contractual terms when doing so would offend public policy and then only in the clearest of cases (ie with 'perceptive restraint'). It then upheld
the appeal on the grounds that there were no considerations of public policy that would render the renewal clauses unenforceable.
In the present case the Constitutional Court granted the franchisees' application for leave to appeal because it offered an opportunity to clarify
the proper constitutional approach to the judicial enforcement of contractual terms, in particular the public policy grounds upon which a court
may refuse to do so.
The franchisees argued that enforcement would be inimical to the values of the Constitution, in particular the right to equality contained in s
9(2) of the Constitution in that it would collapse their businesses and lead to the failure of the black economic empowerment initiative financed
by the Fund. The Trust and others (including the franchisor) argued that the Constitutional Court in Barkhuizen (annotated below) imposed an
onus on parties seeking to avoid the enforcement of a contractual term on the basis of public policy, to adequately explain their failure to
comply with the term, and that since the franchisees had failed to do so, the enforcement of the renewal clause could not be found to be
contrary to public policy. The franchisor's explanation for their failure to comply with the term, that they were unsophisticated and did not grasp
the implications of their failure to comply, was accepted by the High Court but rejected by the SCA.
Held*
Barkhuizen remained the leading authority in our law on the role of equity in contract, as part of public policy considerations. It recognised that
good faith was 'not a self­standing rule, but an underlying value that [was] given expression through existing rules of law'. Botha did not revise
Barkhuizen, nor did it hold that disproportionality or unfairness were separate, self­standing grounds, upon which a court may generally refuse
to enforce contractual provisions. There was agreement between this court and the SCA that abstract values did not provide a freestanding
basis upon which a court may interfere in contractual relationships, but instead performed creative, informative and controlling functions (See
[38] and [58].)
The impact of the Constitution on the enforcement of contractual terms through the determination of public policy was profound. As was stated
in Barkhuizen, it required that courts 'employ [the Constitution and] its values to achieve a balance that strikes down the unacceptable
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imported values of fairness, reasonableness and justice, and ubuntu, which encompassed these values,
 basis upon which a court may interfere in contractual relationships, but instead performed creative, informative and controlling functions (See
[38] and [58].)
The impact of the Constitution on the enforcement of contractual terms through the determination of public policy was profound. As was stated
in Barkhuizen, it required that courts 'employ [the Constitution and] its values to achieve a balance that strikes down the unacceptable
excesses of freedom of contract, while seeking to permit individuals the dignity and autonomy of regulating their own lives'. Public policy
imported values of fairness, reasonableness and justice, and ubuntu, which encompassed these values,

2020 (5) SA p249

was now also recognised as a constitutional value, inspiring our constitutional compact, which in turn informed public policy. Many established
doctrines of contract law are themselves the embodiment of these values, such as those concerning fraud, duress, misrepresentation, estoppel,
implied terms and rectification. (See [71] – [73.)
While abstract values provide a normative basis for the development of new doctrines, prudent and disciplined reasoning was required to ensure
certainty of the law and respect for the doctrine of separation of powers. The scope for the development of new common­law rules in our law
of contract was broad: constitutional values had an essential role to play in the development of constitutionally infused common­law doctrines.
In developing the common law, courts must develop clear and ascertainable rules and doctrines ensuring that our law of contract was
substantively fair, whilst at the same time providing predictable outcomes for contracting parties. This was what the rule of law, a foundational
constitutional value, required. (See [76], [78] and [81].)
A court may however not refuse to enforce contractual terms on the basis that the enforcement would, in its subjective view, be unfair,
unreasonable or unduly harsh. These abstract values have not been accorded autonomous, self­standing status as contractual requirements.
Their application was mediated through the rules of contract law, including the rule that a court may not enforce contractual terms where the
term or its enforcement would be contrary to public policy. It was only where a contractual term, or its enforcement, was so unfair,
unreasonable or unjust that it was contrary to public policy that a court may refuse to enforce it. (See [80].)
Two principles derived from case law need further elucidation: pacta sunt servanda and 'perceptive restraint'. The former was not a relic of our
pre­constitutional past. This court has recognised that, in general, public policy required contracting parties to honour obligations that have
been freely and voluntarily undertaken. It was crucial to economic development that individuals should be able to trust that all contracting
parties would be bound by obligations willingly assumed. Certainty in contractual relations advanced constitutional rights and was essential to
the achievement of our constitutional vision. However, there was no basis for privileging pacta sunt servanda over other constitutional rights
and values; the requirements of public policy were informed by a wide range of constitutional values. Where a number of constitutional rights
and values were implicated, a careful balancing exercise was required to determine whether enforcement of the contractual terms would be
contrary to public policy in the circumstances. As for 'perceptive restraint', while it was a sound approach, courts should not rely on it to shrink
from their constitutional duty to infuse public policy with constitutional values, nor may it be used to shear public policy of the complexity of the
value system created by the Constitution. Furthermore, the notion that there must be substantial and incontestable harm to the public before a
court may decline to enforce a contract on public policy grounds, was alien to our law of contract. (See [83] – [85], [87], [89] – [90].)
In applying this approach to the facts of this case, the question was whether the franchisees discharged the onus of demonstrating that the
enforcement of the renewal clauses would be contrary to public policy in the particular circumstances of this case. As was decided in
Barkhuizen, a party seeking to avoid the enforcement of a contractual term was required to demonstrate good reason for failing to comply with
the term. While the explanation provided was not the only relevant consideration, it was critical in the overall assessment of whether
enforcement would be contrary to public policy in all the particular facts and circumstances of a case. In most cases

2020 (5) SA p250

the absence of an explanation would be the end of the enquiry. Here, the only reasons advanced by the franchisees for their failure were that
they were not sophisticated businesspeople and not fully apprised of their rights and obligations. Yet, the terms of each lease governing
termination and renewal were in simple, uncomplicated language, which an ordinary person could reasonably be expected to understand. The
inference was inescapable that there were no circumstances that prevented the applicants from complying with the terms of the renewal
clauses in the leases and that they had simply neglected to comply when it was possible for them to do so. The harsh outcome alone, absent
an explanation for their failure to comply with the terms of the renewal clauses, did not constitute a sufficient basis to hold that the
enforcement of the clauses would be contrary to public policy. It followed that they did not show that enforcement of the clauses would be
contrary to public policy. (See [91] – [98].)
As for the equality argument, to establish the legal principle that enforcement of a contractual term would be inimical to the constitutional value
of equality, and therefore contrary to public policy, where enforcement would result in the failure of a black economic empowerment initiative,
would deter other parties from electing to contract with beneficiaries of the Fund, or force beneficiaries to offset the increased risk by making
concessions on other contractual aspects during contract negotiations. These outcomes would, in effect, undermine the very objects that the
Fund and s 9(2) seek to achieve. It followed that the appeal would be dismissed (See [99] – [101] and [103].)
Cases cited
Southern Africa
AB and Another v Pridwin Preparatory School and Others 2019 (1) SA 327 (SCA) ([2018] ZASCA 150): applied
Affordable Medicines Trust and Others v Minister of Health and Others 2006 (3) SA 247 (CC) (2005 (6) BCLR 529; [2005] ZACC 3): referred to
Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA) ([2002] 4 All SA 125; [2002] ZASCA 73): referred to
Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) ([1974] 3 All SA 497): dictum at 532G – 533A applied
Atlantis Property Holdings CC v Atlantis Exel Service Station CC 2019 (5) SA 443 (GP) ([2019] 3 All SA 441): dictum in para [30] applied
Bank of Lisbon and South Africa Ltd v De Ornelas and Another 1988 (3) SA 580 (A) ([1988] ZASCA 35): referred to
Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): applied
Beadica 231 CC and Others v Trustees, Oregon Unit Trust and Others 2018 (1) SA 549 (WCC): criticised
BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A): applied
Botha (now Griessel) and Another v Finanscredit (Pty) Ltd 1989 (3) SA 773 (A) ([1989] ZASCA 56): referred to
Botha and Others v Rich NO and Others 2014 (4) SA 124 (CC) (2014 (7) BCLR 741; [2014] ZACC 11): explained and applied
Botha v Rich NO 2013 JDR 0586 (NCK): referred to
Bredenkamp and Others v Standard Bank of SA Ltd 2010 (4) SA 468 (SCA) (2010 (9) BCLR 892; [2010] 4 All SA 113; [2010] ZASCA 75): applied
Brisley v Drotsky 2002 (4) SA 1 (SCA) (2002 (12) BCLR 1229; [2002] 3 All SA 363; [2002] ZASCA 35): referred to
Bruce and Another v Fleecytex Johannesburg CC and Another 1998 (2) SA 1143 (CC) (1998 (4) BCLR 415; [1998] ZACC 3): referred to

2020 (5) SA p251

Burger v Central South African Railways 1903 TS 571: dictum at 576 applied
Business Zone 1010 CC t/a Emmerentia Convenience Centre v Engen Petroleum Ltd and Others 2017 (6) BCLR 773 (CC) ([2017] ZACC 2):
dictum in para [52] applied
Camps Bay Ratepayers and Residents Association and Another v Harrison and Another 2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC
19): referred to
Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2001 (10) BCLR
© 2018 Juta and Company (Pty) Ltd. Downloaded : Tue Feb 18 2025 05:08:35 GMT+0200 (South Africa Standard Time)
995; [2001] ZACC 22): dictum in para [54] applied
 dictum in para [52] applied
Camps Bay Ratepayers and Residents Association and Another v Harrison and Another 2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC
19): referred to
Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2001 (10) BCLR
995; [2001] ZACC 22): dictum in para [54] applied
Cool Ideas 1186 CC v Hubbard and Another 2014 (4) SA 474 (CC) (2014 (8) BCLR 869; [2014] ZACC 16): referred to
Dongwe v Slater­Kinghorn 2009 JDR 1341 (KZP): referred to
Du Plessis and Others v De Klerk and Another 1996 (3) SA 850 (CC) (1996 (5) BCLR 658; [1996] ZACC 10): dictum in para [86] applied
Eerste Nasionale Bank v Saayman NO 1997 (4) SA 302 (SCA) ([1997] 3 All SA 391; [1997] ZASCA 62): referred to
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) (2012 (3) BCLR 219; [2011] ZACC 30): dictum in para
[71] applied
Fraser v Children's Court, Pretoria North, and Others 1997 (2) SA 261 (CC) (1997 (2) BCLR 153; [1997] ZACC 1): dictum in para [20] applied
Garlick Ltd v Phillips 1949 (1) SA 121 (A): referred to
General Council of the Bar of South Africa and Another v Jiba and Another 2019 (8) BCLR 919 (CC) ([2019] ZACC 23; 2019 JDR 1194): dictum in
para [35] applied
K v Minister of Safety and Security 2005 (6) SA 419 (CC) (2005 (9) BCLR 835; [2005] 8 BLLR 749; [2005] ZACC 8): referred to
LTA Engineering Co Ltd v Seacat Investments (Pty) Ltd 1974 (1) SA 747 (A): referred to
Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A) ([1984] ZASCA 116): discussed
Makate v Vodacom Ltd 2016 (4) SA 121 (CC) (2016 (6) BCLR 709; [2016] ZACC 13): referred to
Malan v City of Cape Town 2014 (6) SA 315 (CC) (2014 (11) BCLR 1265; [2014] ZACC 25): referred to
Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd 2012 (3) SA 531 (CC) (2012 (5) BCLR 449; [2012] ZACC 2): applied
Masiya v Director of Public Prosecutions, Pretoria (Centre for Applied Legal Studies and Another, Amici Curiae) 2007 (5) SA 30 (CC) (2007 (2)
SACR 435; 2007 (8) BCLR 827; [2007] ZACC 9): referred to
Mighty Solutions t/a Orlando Service Station and Another v Engen Petroleum Ltd and Another 2016 (1) SA 621 (CC) (2016 (1) BCLR 28; [2015]
ZACC 34): referred to
Mills & Sons v The Trustees of Benjamin Bros (1876) 6 Buch 115: dictum at 121 considered.
Minister of Finance and Another v Van Heerden 2004 (6) SA 121 (CC) (2004 (11) BCLR 1125; [2004] 12 BLLR 1181; [2004] ZACC 3): dictum in
para [31] applied
Mkontwana v Nelson Mandela Metropolitan Municipality and Another; Bisset and Others v Buffalo City Municipality and Others; Transfer Rights
Action Campaign and Others v MEC, Local Government and Housing, Gauteng and Others (KwaZulu­Natal Law Society and Msunduzi Municipality
as Amici Curiae) 2005 (1) SA 530 (CC) (2005 (2) BCLR 150; [2004] ZACC 9): dictum in para [81] applied

2020 (5) SA p252

Mohamed's Leisure Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty) Ltd 2018 (2) SA 314 (SCA) ([2017] ZASCA 176): referred to
Napier v Barkhuizen 2006 (4) SA 1 (SCA) (2006 (9) BCLR 1011; [2006] 2 All SA 496; [2005] ZASCA 119): dictum in para [13] applied
Neugebauer & Co Ltd v Hermann 1923 AD 564: referred to
Nkata v Firstrand Bank Ltd 2016 (4) SA 257 (CC) (2016 (6) BCLR 794; [2016] ZACC 12): referred to
Numsa obo Nganezi v Dunlop Mixing and Technical Services (Pty) Ltd and Others 2019 (5) SA 354 (CC) (2019 (8) BCLR 966; [2019] ZACC 25):
applied
Paddock Motors (Pty) Ltd v Igesund 1976 (3) SA 16 (A): considered
Paulsen and Another v Slip Knot Investments 777 (Pty) Ltd 2015 (3) SA 479 (CC) (2015 (5) BCLR 509; [2015] ZACC 5): referred to
Pharmaceutical Manufacturers Association of South Africa and Another: In re Ex parte President of the Republic of South Africa and
Others 2000 (2) SA 674 (CC) (2000 (3) BCLR 241; [2000] ZACC 1): referred to
Potgieter and Another v Potgieter NO and Others 2012 (1) SA 637 (SCA) ([2011] ZASCA 181): dictum in para [34] applied
Rich NO v Botha [2009] ZANCHC 79: referred to
Roazar CC v The Falls Supermarket CC 2018 (3) SA 76 (SCA) ([2018] 1 All SA 438; [2017] ZASCA 166): referred to
S v Boesak 2001 (1) SA 912 (CC) (2001 (1) SACR 1; 2001 (1) BCLR 36; [2000] ZACC 25): referred to
S v Makwanyane and Another 1995 (3) SA 391 (CC) (1995 (2) SACR 1; 1995 (6) BCLR 665; [1995] ZACC 3): applied
Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) ([1988] ZASCA 94): qualified
Schierhout v Minister of Justice 1926 AD 99: dictum at 109 – 110 applied
South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) ([2004] 4 All SA 168; [2004] ZASCA 72): considered
Tjollo Ateljees (Eins) Bpk v Small 1949 (1) SA 856 (A): referred to
Trustees, Oregon Trust and Another v Beadica 231 CC and Others 2019 (4) SA 517 (SCA) ([2019] ZASCA 29): confirmed on appeal
Tuckers Land and Development Corporation (Pty) Ltd v Hovis 1980 (1) SA 645 (A): applied
Turnbull­Jackson v Hibiscus Coast Municipality 2014 (6) SA 592 (CC) (2014 (11) BCLR 1310; [2014] ZACC 24): referred to
Weinerlein v Goch Buildings Ltd 1925 AD 282: dictum at 295 applied
Wells v South African Alumenite Company 1927 AD 69: criticised
Zuurbekom Ltd v Union Corporation Ltd 1947 (1) SA 514 (A): referred to.
Australia
Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49: referred to
Burger King Corporation v Hungry Jack's Pty Ltd (2001) 69 NSWLR 558: referred to
Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15: compared.
Canada
Bhasin v Hrynew 2014 SCC 71: compared.
England
Braganza v BP Shipping Ltd [2015] UKSC 17: referred to
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British Telecommunications Plc v Telefónica O2 UK Ltd [2014] UKSC 42: referred to
 Canada
Bhasin v Hrynew 2014 SCC 71: compared.
England
Braganza v BP Shipping Ltd [2015] UKSC 17: referred to
British Telecommunications Plc v Telefónica O2 UK Ltd [2014] UKSC 42: referred to

2020 (5) SA p253

Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433: compared
Printing and Numerical Registering Co v Sampson (1875) LR 19 Eq 462 (CA): compared
Sheikh Tahnoon Bin Saeed Bin v Kent [2018] EWHC 333 (Comm): dictum in para [174] compared
Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111 (QB): referred to.
Hong Kong
Aktieselskabet Dansk Skibsfinansiering v Brothers [2000] 3 HKCFAR: compared.
Legislation cited
The Constitution, ss 9(2) and 39: see Juta's Statutes of South Africa 2019/20 vol 5 at 1­34 and 1­38.
Case Information
BJ Manca SC (with GGM Quixley) for the applicants.
J Muller SC (with HL du Toit) for the first and second respondents.
An appeal from the Supreme Court of Appeal (hearing an appeal from the High Court of South Africa, Western Cape Division, Cape Town).
Order
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the costs of two counsel.
Judgment
Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring):
Introduction
[1] This application concerns the proper constitutional approach to the judicial enforcement of contractual terms and, in particular, the public
policy grounds upon which a court may refuse to enforce these terms. The extent to which a court may refuse to enforce valid contractual
terms on the basis that it considers that enforcement would be unfair, unreasonable or unduly harsh is a burning issue in the law of contract in
our new constitutional era. 1 There is a widely held view that there is a growing divergence in the approaches to this issue adopted by this
court and the Supreme Court of Appeal. This perceived divergence has contributed to a great deal of undesirable uncertainty in our law of
contract.
Background
[2] The second respondent, Sale's Hire CC (Sale's Hire), is an operator and franchisor of Sale's Hire businesses — the main focus of which is the

2020 (5) SA p254

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
rental and sale of tools and equipment. The applicants are four close corporations that entered into franchise agreements with Sale's Hire to
operate Sale's Hire franchised businesses for a period of 10 years. The applicants operate their businesses from premises leased from the first
respondent, the trustees for the time being of the Oregon Trust (Trust). Mr Shaun Sale, one of three trustees of the Trust, is also the sole
member of Sale's Hire. The members of the applicants are former long­time senior employees of Sale's Hire. They acquired their businesses in
terms of a black economic empowerment initiative financed by the third respondent, the National Empowerment Fund (Fund). 2
[3] During 2011, Sale's Hire entered into a cooperation agreement with the Fund in terms of which the Fund would provide loans to black­owned
entities to enable them to own and operate Sale's Hire franchised businesses as part of a black economic empowerment initiative. Sale's Hire
was appointed as the coordinator of these funding transactions and was required to facilitate the financing process between the Fund and the
black­owned franchisees. In terms of the cooperation agreement, Sale's Hire undertook to train the franchisees to operate their businesses and
provide them with ongoing business support and mentorship. The applicants were not party to the cooperation agreement.
[4] The franchise agreements, entered into in October 2011, required that the franchisees operate their franchised businesses from an approved
location. The approved locations, in terms of the franchise agreements, were premises leased to the applicants by the Trust.
[5] The applicants had each concluded substantially identical lease agreements with the Trust during May 2011. The lease agreements
commenced on 1 August 2011 with an initial period of five years, terminating on 31 July 2016. The lease agreements provided each of the
applicants with an option to renew their lease for a further five­year period. Clause 20.1 of the lease agreements provides:
'The Lessee shall have the right to extend the Lease Period by a further period as set out in section 13 of the Schedule on the same terms and conditions as
set out herein, save as to rental, provided that the Lessee gives the Lessor written notice of its exercising of the option of renewal at least six (6) months prior to
the termination date.'

[6] The aggregate of the five­year initial lease period and the five­year lease renewal period corresponds with the 10­year period of the
franchise agreements. The option to renew the lease agreement had to be exercised in writing at least six months prior to the termination of the
initial lease period. This meant that written notice had to be given by the applicants to the Trust on or before 31 January 2016.

2020 (5) SA p255

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
[7] The applicants did not exercise their respective renewal options by 31 January 2016. They failed to give written notice of their intentions to
renew the leases within the notice period, as required in terms of the renewal clause. The second applicant was not able to produce any notice
of renewal sent by it to the Trust. The first, third and fourth applicants purported to exercise their options during March 2016, after the notice
period had elapsed.
[8] On 3 March 2016, the fourth applicant's accountant sent an email to the Trust enquiring how soon a new lease agreement could be drawn
up and sent to the fourth applicant in draft format 'for discussion purposes'. On 15 March 2016, the third applicant sent a letter which was
principally a request to the Trust to consider an offer to purchase the premises, coupled with a request to forward a 'draft of the renewal of
premises lease'. On 29 March 2016, the first applicant sent a letter to the Trust that was a 'request to propose a renewal on our already
existing lease agreement with the option to purchase'. Some months went by without further communication. During July 2016, the Trust
demanded that the applicants vacate the leased premises.
[9] The franchise agreements give Sale's Hire an election to terminate the agreements in the event that the applicants are ejected from the
approved locations, or if the lease agreements in respect of the approved locations are terminated. It was not disputed by the respondents that
the applicants' businesses would collapse if Sale's Hire exercises its contractual power to terminate the franchise agreements. It would,
however, appear to be within Sale's Hire's discretion to allow the applicants to continue operating their franchise businesses at other approved
premises — preserving the franchise agreements and the applicants' businesses.
[10]Juta
© 2018 Theand
applicants
Company brought
(Pty) Ltd. an urgent application in the High Court of South Africa, Western
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order declaring that the renewal options had been validly exercised and prohibiting the Trust from taking steps to evict the applicants. The
 approved locations, or if the lease agreements in respect of the approved locations are terminated. It was not disputed by the respondents that
the applicants' businesses would collapse if Sale's Hire exercises its contractual power to terminate the franchise agreements. It would,
however, appear to be within Sale's Hire's discretion to allow the applicants to continue operating their franchise businesses at other approved
premises — preserving the franchise agreements and the applicants' businesses.
[10] The applicants brought an urgent application in the High Court of South Africa, Western Cape Division, Cape Town (High Court) seeking an
order declaring that the renewal options had been validly exercised and prohibiting the Trust from taking steps to evict the applicants. The
applicants contended that the strict enforcement of the renewal clause of the lease agreements would be contrary to public policy, or
unconscionable in the circumstances of this case. The Trust, in turn, brought a counter­application for the applicants' eviction from the leased
premises.
[11] The High Court found in favour of the applicants, dismissed the Trust's counter­application that sought their eviction, and declared that
the lease agreements between the applicants and the Trust had been validly renewed. 3 The High Court relied on this court's decision in Botha,
4 which it understood as introducing a 'principle of proportionality' into our law of contract. 5 The High Court interpreted the principle

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
emerging from Botha as being that the sanction of cancellation for breach must be 'proportionate to the consequences of the breach'. 6 I t
found that the termination of the leases would result in the termination of the franchise agreements, the collapse of the applicants' businesses
and the failure of the black economic empowerment initiative. 7 This, the High Court held, would constitute a disproportionate sanction for the
failure by the applicants to comply with the strict terms of the renewal clauses. 8
[12] The Supreme Court of Appeal criticised the High Court for failing to have sufficient regard to its jurisprudence, which stresses the
importance of the principle of pacta sunt servanda (agreements, freely and voluntarily concluded, must be honoured) and the need for certainty
in the law of contract. 9 While recognising that courts may decline to enforce contractual terms which are, or the enforcement of which would
be, contrary to public policy, the Supreme Court of Appeal cautioned that this power should be exercised 'sparingly, and only in the clearest of
cases'. 1 0 As to the principle of proportionality, ostensibly derived from this court's decision in Botha, 1 1 the Supreme Court of Appeal rejected
the notion that a disproportionate sanction for breach of contract, or for a failure to comply with the terms of a contract, is unenforceable. 1 2
It referred to this notion as being 'entirely alien' to our law and held that its recognition would undermine the principle of legality. 1 3 T h e
Supreme Court of Appeal held that there were no considerations of public policy that rendered the renewal clauses unenforceable and replaced
the High Court's order with an order dismissing the application and directing that the applicants be evicted from the leased premises. 1 4
In this court
[13] The applicants contend that the strict enforcement of the contractual terms governing the renewal of their leases would be contrary to
public policy. According to the applicants, enforcement would be inimical to the values of the Constitution, in particular, the right to equality
contained in s 9(2) of the Constitution. 1 5 They allege that the

2020 (5) SA p257

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
termination of the lease agreements will bring an end to their franchise agreements, collapse their businesses and lead to the failure of the black
economic empowerment initiative financed by the Fund.
[14] The respondents support the principle that courts should exercise the power not to enforce a contract on the basis of public policy
'sparingly and only in the clearest of cases'. 1 6 They contend that this is not a case for judicial interference. The respondents argue that this
court's judgment in Barkhuizen1 7 imposes an onus on parties that seek to avoid the enforcement of a contractual term on the basis of public
policy to adequately explain their failure to comply with that term. The respondents submit that, as the applicants have failed to fulfill this
requirement, the enforcement of the renewal clause cannot be found to be contrary to public policy.
Leave to appeal
[15] There is, as always, the preliminary issue of whether leave to appeal should be granted in this court. The applicants are required to
demonstrate that two requirements are met. First, the pleaded case must fall within the jurisdiction of this court 1 8 and second, the interests
of justice must warrant the granting of leave to appeal. 1 9
[16] Whether the enforcement of a contractual clause would be contrary to public policy, in that it is inimical to constitutional values, is a
constitutional issue. As this court stated in Barkhuizen, public policy is 'deeply rooted in our Constitution and the values which underlie it'.2 0
The adjudication of this matter implicates the crucial question of how public policy, as a basis upon which a court may refuse to enforce the
terms of a contract, should be determined. This question requires an

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
enquiry into the social policy and normative content behind the common­law rules that inform judicial control of contractual terms on the basis
of public policy. 2 1
[17] In addition, this application raises an arguable point of law of general public importance. Indeed, there is deep contestation among
academics, 2 2 judges speaking extracurially 2 3 and our courts about the role that abstract concepts, such as ubuntu, 2 4 reasonableness and
fairness, play in the judicial control of contracts.

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
[18] The apparent divergence between the approach of this court and the Supreme Court of Appeal on this issue, and the resultant
uncertainty, have been recognised as problematic and undesirable. 2 5 This case presents an opportunity for this court to provide much needed
clarity on these issues, bringing an end to the uncertainty and confusion which have plagued our law of contract. It also presents an
opportunity to resolve the perceived divergence between the approach of this court and that of the Supreme Court of Appeal, by engaging in a
doctrinal analysis that seeks to make the best sense of our jurisprudence on these issues and present a coherent account thereof. 2 6
[19] The prospects of an appeal succeeding, while of significant importance, are not decisive in determining whether it is in the interests of
justice for leave to appeal to be granted. 2 7 The questions about the judicial enforcement of contracts that arise in this case are of general
public importance, as contractual relations are at the bedrock of economic life. In these circumstances, it would be in the interests of justice to
grant leave to appeal.
Historical development of the judicial enforcement of contracts
[20] Historically, there has been controversy regarding the role of the concepts of good faith, fairness and reasonableness in the law of
contract. 2 8 In particular, the question of when, and to what extent, these concepts may be invoked at the expense of the 'competing goals'
of

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
certainty and fairness in contract law has been vexed. 2 9 Over time, our courts have developed a consensus on certain key principles
governing the judicial control over the enforcement of contracts.
Pre­constitutional jurisprudence
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ius civile's (civil law's) strict liability was radically altered through the introduction by praetorian edict of the exceptio doli, which established the
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 certainty and fairness in contract law has been vexed. 2 9 Over time, our courts have developed a consensus on certain key principles
governing the judicial control over the enforcement of contracts.
Pre­constitutional jurisprudence
[21] The independent concept of good faith has been imported into South African contract law from Roman contract law. 3 0 In Roman law, the
ius civile's (civil law's) strict liability was radically altered through the introduction by praetorian edict of the exceptio doli, which established the
defence of bad faith. 3 1 Contracts were traditionally viewed as either pre­praetorian edict stricti iuris (with strict liability, where not even fraud
afforded an aggrieved contracting party a defence) or bonae fidei (under the influence of the exceptio doli generalis). With the development of
Roman­Dutch law in Europe, the conventional Roman law distinction between stricti iuris and bonae fidei contracts gradually receded and the
principle that contracts came into existence by consensus and were governed by good faith principles received greater recognition. 3 2
[22] As far back as the nineteenth century, our courts cautioned that legal certainty would be undermined if freestanding notions of good faith
were to be adopted. Equity, said De Villiers CJ in Mills, could be applied insofar as it is consistent with the principles of Roman­Dutch law. 3 3
Innes CJ explained it thus in Burger:
'(O)ur law does not recognise the right of a court to release a contracting party from the consequences of an agreement duly entered into by him merely
because that agreement appears to be unreasonable.' 3 4

[23] Kotze JA was even more forthright in Weinerlein when he opined that 'equity cannot and does not override a clear provision of our law', and
that while the common law contains many equitable principles, 'equity, as distinct from and opposed to the law, does not prevail with us'. 3 5
Equitable principles are only of force where they have been

2020 (5) SA p261

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
incorporated into our law. 3 6 Wessels JA, on the other hand, held that our courts have the inherent equitable jurisdiction to refuse to allow a
party to enforce an unconscionable claim. 3 7 These two different approaches to equity in the law of contract have featured in our
jurisprudence ever since.
[24] For a considerable time, there was scepticism whether the exceptio was a separate, distinct legal tool in our law, and uncertainty as to
the extent of its application. 3 8 In Zuurbekom, the Appellate Division recognised the continued existence of the exceptio doli generalis.3 9 In
Paddock Motors, Jansen JA accepted that the exceptio doli generalis was still part of our law, but that it could neither override the substantive
law, nor amend the terms of an agreement, which had otherwise been validly concluded. 4 0
[25] The decision of the Appellate Division in Bank of Lisbon finally excised the exceptio doli generalis from our law. 4 1 Joubert JA, writing for
the majority, held that the exceptio had never been received in Roman­Dutch law and, therefore, did not form part of our law. 4 2 The majority
held that the defence should be 'buried' as a 'superfluous, defunct anachronism' and roundly rejected the notion that courts had an equitable
discretion to adjudicate contract disputes with direct reference to fairness and good faith. 4 3
[26] Shortly after the decision in Bank of Lisbon, the Appellate Division in Sasfin struck down a deed of cession on the basis that it was contrary
to public policy and therefore unenforceable. 4 4 The deed of cession placed the appellant financing company in effective control of the
respondent's earnings, depriving him of his income and the means to support himself and his family. 4 5 In the Appellate Division's view this
placed the respondent virtually in 'the position of a slave', working for

2020 (5) SA p262

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
the benefit of the appellant. 4 6 The Appellate Division held that an 'agreement having this effect is clearly unconscionable and incompatible
with the public interest, and therefore contrary to public policy'. 4 7 It further held that the deed of cession was 'grossly exploitative' of the
respondent and 'offend[ed] against the public mores to such an extent' that it should be struck down on the grounds of public policy. 4 8
[27] While the Appellate Division held that public policy generally favours the 'utmost freedom of contract', 4 9 it also recognised that public
policy 'should properly take into account the doing of simple justice between [persons]'. 5 0 In reaching this conclusion, the Appellate Division
relied on its earlier decision in Magna Alloys, 5 1 in which it reiterated that our common law of contract does not recognise agreements that are
contrary to public policy. 5 2 The Appellate Division cautioned that the power to strike down contracts for being contrary to public policy should
be exercised 'sparingly and only in the clearest of cases' so as to avoid uncertainty as to the validity of contracts. 5 3
[28] Subsequent Appellate Division decisions reaffirmed the approach that agreements that offend public policy may be struck down by our
courts, subject to the caveat that this power be exercised sparingly and only in the clearest of cases. 5 4 In our law, judicial control of
contractual terms has been exercised primarily through the prism of public policy.
Constitutional era jurisprudence
Decisions of the Supreme Court of Appeal pre­Barkhuizen
[29] In Brisley, the Supreme Court of Appeal laid the foundation for its approach to the proper roles of good faith, fairness and reasonableness
in

2020 (5) SA p263

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
the law of contract in the new constitutional era. 5 5 It held that good faith does not form an independent or free­floating basis upon which a
court can refuse to enforce a contractual provision and that the acceptance of good faith as a self­standing ground would create an
unacceptable state of uncertainty in our law of contract. 5 6 According to the Supreme Court of Appeal, good faith is a fundamental principle
that underlies the law of contract and is reflected in its particular rules and doctrines. 5 7 In this way, it informs the substantive law of
contract, performing a creative, controlling and legitimating function. 5 8 In a separate concurrence, Cameron JA emphasised that constitutional
principles, particularly those encapsulated in the Bill of Rights, permeate all law, including contract. 5 9 Where contracts infringe on the
fundamental values embodied in the Constitution, they will be struck down as being offensive to public policy. 6 0
[30] The views expressed in Brisley were affirmed in Afrox Healthcare where the Supreme Court of Appeal explained that courts do not make
decisions regarding the enforcement of contractual provisions on the basis of abstract considerations of good faith, reasonableness, fairness,
but only on the basis of established legal rules. 6 1 Good faith, reasonableness and fairness, although they form the basis for our legal rules, are
not themselves legal rules. 6 2 The Supreme Court of Appeal further held that freedom of contract is a constitutional value that aligns with the
principle that contracts freely and seriously entered into should be judicially enforced. 6 3 For this reason, it cautioned that courts should
approach their task of striking down, or refusing to enforce contracts, on the basis of public policy with 'perceptive restraint'. 6 4
[31] In York Timbers, the Supreme Court of Appeal confirmed that abstract values, such as fairness and good faith, could not themselves be

2020 (5) SA p264

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
imposed as contractual terms. 6 5 It confirmed that, while public policy was a cogent rationale for refusing to enforce contractual terms, good
faith, fairness and reasonableness are not self­standing grounds for a refusal to enforce otherwise valid contracts. It summarised its
jurisprudence in this area as follows:
'(A)lthough abstract values such as good faith, reasonableness and fairness are fundamental to our law of contract, they do not constitute independent
substantive rules that courts can employ to intervene in contractual relationships. These abstract values perform creative, informative and controlling functions
through established rules of the law of contract. They cannot be acted upon by the courts directly. Acceptance of the notion that judges can refuse to enforce a
contractual provision merely because it offends their personal sense of fairness and equity, will give rise to legal and commercial uncertainty.' 6 6

Barkhuizen
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concerned the constitutionality of a time limitation clause in a short­term insurance contract, which required the insured party to institute legal
 '(A)lthough abstract values such as good faith, reasonableness and fairness are fundamental to our law of contract, they do not constitute independent
substantive rules that courts can employ to intervene in contractual relationships. These abstract values perform creative, informative and controlling functions
through established rules of the law of contract. They cannot be acted upon by the courts directly. Acceptance of the notion that judges can refuse to enforce a
contractual provision merely because it offends their personal sense of fairness and equity, will give rise to legal and commercial uncertainty.' 6 6

Barkhuizen
[32] The controversy regarding the judicial control over the enforcement of contracts first reached this court in Barkhuizen. 6 7 That matter
concerned the constitutionality of a time limitation clause in a short­term insurance contract, which required the insured party to institute legal
proceedings within 90 days of a claim being repudiated. 6 8 The insured party instituted an action in the High Court against the insurer for loss
that resulted from damage to his motor vehicle. Relying on the time limitation clause, the insurer raised a special plea that it had been released
from liability, because proceedings had been brought out of time. 6 9 By way of replication, the applicant contended that the time limitation
clause was contrary to public policy, in that it stipulated an unreasonably short time to institute action and violated his right of access to
courts enshrined in s 34 of the Constitution. 7 0
[33] The parties agreed to a 'terse statement of facts', recording no more than the terms of the contract, the occurrence of the accident, the
timelines for the claim, the repudiation of the claim and the institution

2020 (5) SA p265

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
of proceedings. 7 1 This statement of facts did not address any of the applicant's particular circumstances, or provide an explanation as to why
he had not instituted his claim within the contractually agreed 90­day period.
[34] On appeal, Ngcobo J, writing for the majority, rejected the High Court's direct application of the Bill of Rights to contractual terms, opting
instead for an indirect application through the vehicle of public policy. 7 2 The majority judgment explained that public policy is now deeply
rooted in the Constitution and its underlying values. 7 3 The majority held:
'(T)he proper approach to the constitutional challenges to contractual terms is to determine whether the term challenged is contrary to public policy as
evidenced by the constitutional values, in particular, those found in the Bill of Rights.' 7 4

[35] The majority judgment further explained that public policy, as informed by the Constitution, imports 'notions of fairness, justice and
reasonableness', takes account of the need to do 'simple justice between individuals' and is informed by the concept of ubuntu. 7 5 The majority
recognised that public policy, in general, requires parties to honour contractual obligations that have been freely and voluntarily undertaken. 7 6
This is because the principle of pacta sunt servanda is a 'profoundly moral principle, on which the coherence of any society relies'. 7 7 T h e
majority further stated that this principle —
'gives effect to the central constitutional values of freedom and dignity. Self­autonomy, or the ability to regulate one's own affairs, even to one's own
detriment, is the very essence of freedom and a vital part of dignity.' 7 8

[36] The majority judgment held that determining fairness in this context involves a two­stage enquiry:
'The first is whether the clause itself is unreasonable. Secondly, if the clause is reasonable, whether it should be enforced in the light of the circumstances
which prevented compliance with the time limitation clause.' 7 9

[37] The first stage involves a consideration of the clause itself. The question is whether the clause is so unreasonable, on its face, as to be
contrary to public policy. If the answer is in the affirmative, the court will strike down the clause. If, on the other hand, the clause is found to

2020 (5) SA p266

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
be reasonable, then the second stage of the enquiry will be embarked upon. The second stage involves an inquiry whether, in all the
circumstances of the particular case, it would be contrary to public policy to enforce the clause. 8 0 The onus is on the party seeking to avoid
the enforcement of the clause to 'demonstrate why its enforcement would be unfair and unreasonable in the given circumstances'. 8 1 T h e
majority emphasised that particular regard must be had to the reason for non­compliance with the clause. 8 2
[38] The majority judgment held that the time limitation clause itself was reasonable. 8 3 It was, however, unable to determine whether the
enforcement of the clause was unfair in the circumstances. 8 4 This was because of the limited nature of the agreed statement of facts, which
did not disclose the reason for non­compliance with the clause. 8 5 The majority found that 'without those facts it is impossible to say whether
the enforcement of the clause against the applicant would be unfair and thus contrary to public policy'. 8 6 Importantly, in Barkhuizen this court
recognised that, as the law stands, good faith is 'not a self­standing rule, but an underlying value that is given expression through existing rules
of law'. 8 7 This court accordingly affirmed the position of the Supreme Court of Appeal in Brisley.
Decisions of the Supreme Court of Appeal post­Barkhuizen
[39] The ambit of Barkhuizen was interpreted by the Supreme Court of Appeal in Bredenkamp. 8 8 Standard Bank had cancelled banking
contracts and closed the bank accounts of Mr Bredenkamp and entities related to him. Mr Bredenkamp and the entities contended that the
banking contracts could only be terminated on good cause. 8 9 Relying on Barkhuizen, they argued that the Constitution imposes a
reasonableness requirement on all contractual provisions and their enforcement. 9 0
[40] In dismissing Mr Bredenkamp and the entities' appeal, the Supreme Court of Appeal highlighted that the case revolved around 'fairness as
an overarching principle' in our law of contract. 9 1 This was because Mr Bredenkamp and the entities did not suggest that any constitutional
value was implicated by the bank's exercise of its right to terminate the

2020 (5) SA p267

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
banking contracts. 9 2 The Supreme Court of Appeal rejected the notion that this court in Barkhuizen had established that fairness is a free­
standing requirement for the enforcement of contractual provisions. 9 3 In this regard, the Supreme Court of Appeal stated:
'I do not believe that the judgment [in Barkhuizen] held or purported to hold that the enforcement of a valid contractual term must be fair and reasonable even
if no public policy consideration found in the Constitution or elsewhere is implicated.' 9 4

[41] The Supreme Court of Appeal viewed Barkhuizen as authority for the proposition that, where a constitutional value is limited by the terms
of a contract, or by the enforcement of those terms, it must be determined whether the limitation is 'fair and reasonable'. 9 5 Applying this
principle to the facts in Bredenkamp, the Supreme Court of Appeal found that the termination of the banking contract 'did not offend any
identifiable constitutional value and was not otherwise contrary to any public policy consideration'. 9 6
[42] Since Bredenkamp, the Supreme Court of Appeal has consistently held that fairness, reasonableness and good faith are not self­standing
grounds upon which a court may refuse to enforce a contractual term on the basis of public policy. 9 7 The Supreme Court of Appeal has
continued to espouse the 'perceptive restraint' principle, derived from Sasfin, that a court should exercise its power to refuse to enforce a
contract on the basis of public policy 'sparingly and only in the clearest of cases'. 9 8 In Pridwin, that court accepted that this principle was
clearly established

2020 (5) SA p268

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
and crucial in governing the judicial control of contracts through the instrument of public policy. 99

Decisions of this court post­Barkhuizen

[43] In Everfresh, the applicant sought to develop the common law, so as to impose an obligation to negotiate in good faith. 100 The majority
of this court declined to do so. That refusal was based on the fact that the claim for the development of the common law was raised for the
first time in this court. 101 In the circumstances, the majority held that it was not in the interests of justice to hear the matter. 102 In obiter
dictum statements (remarks in passing not setting binding precedent), Moseneke DCJ postulated the possible development of the common law
on the grounds advanced, if the case had been pleaded properly:
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'Had the case been properly pleaded, a number of inter­linking constitutional values would inform a development of the common law. Indeed, it is highly
desirable and in fact necessary to infuse the law of contract with constitutional values, including values of ubuntu, which inspire much of our constitutional
 [43] In Everfresh, the applicant sought to develop the common law, so as to impose an obligation to negotiate in good faith. 100 The majority
of this court declined to do so. That refusal was based on the fact that the claim for the development of the common law was raised for the
first time in this court. 101 In the circumstances, the majority held that it was not in the interests of justice to hear the matter. 102 In obiter
dictum statements (remarks in passing not setting binding precedent), Moseneke DCJ postulated the possible development of the common law
on the grounds advanced, if the case had been pleaded properly:
'Had the case been properly pleaded, a number of inter­linking constitutional values would inform a development of the common law. Indeed, it is highly
desirable and in fact necessary to infuse the law of contract with constitutional values, including values of ubuntu, which inspire much of our constitutional
compact.' 103

[44] In Botha, 104 this court was called upon to determine whether a cancellation clause in a contract could be enforced in circumstances
where the contract was governed by the statutory regime created by s 27(1) of the Alienation of Land Act (Act). 105 In light of the
controversy resulting from this decision, it is necessary to devote considerable focus to this matter.
[45] The first applicant (Ms Botha) was the sole member of the second applicant, Khululekani Laundry CC. Ms Botha had concluded an
instalment sale agreement with the JJW Hendriks Trust (trust) in terms of which she purchased immovable property from the trust. The business
of the second applicant was conducted on the immovable property. The agreement contained a cancellation clause which provided that in the
event of a breach by Ms Botha, the trust would be entitled to cancel the agreement and retain all payments made. 106 Ms Botha had paid
three­quarters of the purchase price, but had then defaulted on her monthly instalment payments. 107 The trust instituted proceedings in the

2020 (5) SA p269

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
High Court for an order declaring the sale agreement cancelled and evicting the applicants from the property. 108 In turn, Ms Botha
counterclaimed for an order that the property be transferred into her name. 109 She relied on s 27(1) of the Act, which entitles a purchaser of
immovable property on instalment, who has paid at least half of the purchase price, to claim transfer of the property against registration of a
mortgage bond in favour of the seller. 110 In the High Court, the applicants contended that the enforcement of the cancellation clause would
be unfair and contrary to public policy, as 80% of the purchase price had been paid. 111 Ms Botha claimed that she was, in terms of s 27(1),
entitled to transfer of the property into her name.
[46] The High Court rejected the public policy argument and ordered the eviction of the applicants from the property. 112 The High Court did
not deal with Ms Botha's counterclaim. On appeal to the full court, Ms Botha persisted in her claim that she was entitled to transfer of the
property into her name. The argument advanced on her behalf was that 27(1) of the Act was applicable to the contract of sale concluded by
the parties. Accordingly, by virtue of the fact that Ms Botha had paid more than 50% of the purchase price of the property and had made a
demand for the transfer of the property, the trust, by reason of the provisions of clause 8.4 of the sale agreement, 113 was contractually
obliged to transfer the property into her name. 114
[47] The full court dismissed the appeal, finding that Ms Botha was not entitled to specific performance in the form of the transfer of the
property. It held that the only remedies available to a purchaser are those

2020 (5) SA p270

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
listed in s 27(3) of the Act. The full court held that no provision is made in the Act for a claim of specific performance, in terms of which a seller
can be directed to transfer the property to the purchaser. It further held that s 27(1) enables the purchaser, when half of the purchase price
has been paid, to demand transfer of the property on condition that a bond is registered in favour of the seller to secure the balance of the
purchase price. If the seller does not tender transfer of the property after receiving a demand, the purchaser's only remedy is to cancel the sale
in terms of s 27(3). 115 The full court also found that Ms Botha had failed to prove her second claim, namely that the enforcement of the
cancellation clause was contrary to public policy. It reached this conclusion primarily on the bases that Ms Botha had proffered no explanation
for her failure to meet her contractual obligations, that she had derived substantial benefit from the contract and that the respondents had
behaved eminently reasonably. 116
[48] The main issue for determination in this court was whether the trust was obliged, in terms of s 27(1), to register the property in Ms Botha's
name against registration of a mortgage bond in its favour. 117 In the alternative, the question was whether enforcement of the cancellation
clause would, in these circumstances, be unreasonable, unfair and unconstitutional and, if so, whether Ms Botha would be entitled to restitution
of the money paid. 118
[49] It is clear from this delineation of the issues that Botha principally concerned the interpretation and application of s 27 in the context of a
contract of an instalment sale. In particular, a contract of sale that contained a cancellation clause, which provided for forfeiture. The trust, as
seller, sought to enforce its right to cancel the contract, while Ms Botha, as purchaser, resisted cancellation on the basis of the right in s 27(1),
which she claimed had accrued to her. The context in which Botha was decided is also apparent from the discussion in the judgment regarding
whether it was in the interests of justice to grant leave to appeal. Nkabinde J, writing for the court, said that it was a matter of public
importance that this court determine 'whether cancellation of a contract, governed by the Act, and the resultant forfeiture of the payments . .
. are fair and thus constitutionally compliant'. 119
[50] This court recognised that it was obliged to interpret s 27 of the Act in a manner that promotes the spirit, purport and objects of the Bill of
Rights. 120 After a consideration of the legislative history, the purpose and the plain language of the Act, it concluded that s 27(1) seeks to
protect the rights of a purchaser of immovable property who has paid at least half

2020 (5) SA p271

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
of the purchase price of property in terms of an instalment agreement. 121 This court cautioned that s 27(1) should not be read in isolation and
concluded that s 27(3) provided additional optional protection to a purchaser. 122
[51] This court accepted, as was held by the full court and contended by the trust, that the purchaser is entitled to cancel the contract in
terms of s 27(3) and recover payments made. 123 However, it rejected the contention that, because the section only mentions cancellation,
this was the purchaser's only remedy where the seller refused to honour the demand for transfer. 124 This court held that s 27(3) adds to the
purchaser's remedies without taking anything away. 125 It reasoned:
'The trustees' argument cannot be sustained. The starting point is that at common law a contracting party is entitled to specific performance in respect of any
contractual right. Section 27(1) creates a contractual right implied by law. The purchaser is therefore entitled to specific performance in respect of that right
unless the legislation means to depart from the common­law position. The section indicates no meaning of this kind.' 126

[52] This court went on to explain that the construction of s 27(1) contended for by the trust would defeat the purpose of the Act, namely, to
protect a purchaser who has partially paid the purchase price of immovable property. 127 It would leave a purchaser, like Ms Botha, who has
paid most of the purchase price and whose right to transfer is being ignored by a seller, without the standard remedy of specific performance
afforded by our law of contract. 128 This court rightly concluded that this would be 'anomalous' in an Act designed to protect persons in the
position of Ms Botha. 129
[53] In a unanimous judgment, this court held that Ms Botha's right to claim transfer was preserved, despite her being in arrears. In this regard,
it said that depriving Ms Botha of her entitlement to transfer of the property in terms of s 27 'would be a disproportionate sanction in relation to
the considerable portion of the purchase price she has already paid, and would thus be unfair'. 130
[54] This court also refused to enforce the seller's right to cancel the sale agreement, on the basis that cancellation of the sale agreement
would be 'a disproportionate penalty for breach' and unfair in the circumstances of

2020 (5) SA p272

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
the case, particularly where three­quarters of the purchase price had already been paid. 131 This court therefore crafted an appropriate order,
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requiring the applicant to pay all outstanding arrears to the trust and to register a mortgage bond in favour of the trust, prior to the property
being transferred into her name. 132
 2020 (5) SA p272

Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
the case, particularly where three­quarters of the purchase price had already been paid. 131 This court therefore crafted an appropriate order,
requiring the applicant to pay all outstanding arrears to the trust and to register a mortgage bond in favour of the trust, prior to the property
being transferred into her name. 132
[55] In Botha, this court made two observations concerning disproportionality. These were:
'In my view, to deprive Ms Botha of the opportunity to have the property transferred to her under s 27(1) and in the process cure her breach in regard to the
arrears, would be a disproportionate sanction in relation to the considerable portion of the purchase price she has already paid, and would thus be unfair.' 133

And:
'For the same reasons mentioned above, granting cancellation — and therefore, in this case, forfeiture — in circumstances where three­quarters of the
purchase price has already been paid would be a disproportionate penalty for the breach.' 134

[56] Reading these two obiter dicta together, it is evident that this court was mindful, in the unique statutory context of Botha, of the
consequences of enforcing the sanction of cancellation for breach of an instalment sale agreement governed by the Act. Cancellation, in these
circumstances, would result in Ms Botha losing her right to claim transfer of the property into her name and in the forfeiture of three­quarters of
the purchase price, which she had already paid. This court was of the view that, as such, the sanction for breach would be disproportionate in
relation to the considerable portion of the purchase price already paid.
[57] Although this court did not expressly refer to the test enunciated in Barkhuizen, it also did not elevate notions of good faith or fairness to
substantive rules of contract law. On the contrary, it endorsed the view that those notions underlie our law of contract and have given rise to
principles like those of reciprocity and the exceptio non adempleti contractus. 135 It put the matter thus:
'To the extent that the rigid application of the principle of reciprocity may in particular circumstances lead to injustice, our law of contract, based as it is on the
principle of good faith, contains the necessary flexibility to ensure fairness. In Tuckers Land and Development Corporation it was pointed out that the concepts of
justice, reasonableness and fairness historically constituted good faith in contract. The principle of

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reciprocity originated in these notions. This accords with the requirements of good faith.
The Act seeks to ensure fairness between sellers and purchasers. Its provisions are in accordance with the constitutional values of reciprocal recognition of the
dignity, freedom and equal worth of others, in this case those of the respective contracting parties. The principle of reciprocity falls squarely within this
understanding of good faith and freedom of contract, based on one's own dignity and freedom as well as respect for the dignity and freedom of others. Bilateral
contracts are almost invariably cooperative ventures where two parties have reached a deal involving performances by each in order to benefit both. Honouring
that contract cannot therefore be a matter of each side pursuing his or her own self­interest without regard to the other party's interests. Good faith is the lens
through which we come to understand contracts in that way. In this case good faith is given expression through the principle of reciprocity and the exceptio non
adimpleti contractus.' 136

[58] It must be categorically stated that, in Botha, this court did not revisit or revise the Barkhuizen test. Barkhuizen remains the leading
authority in our law on the role of equity in contract, as part of public policy considerations.
[59] There has been significant criticism of this court's judgment in Botha. Much of the academic commentary on Botha assumes that Botha is
authority for the general proposition in our law of contract that a party who breaches its contractual obligations can avoid the termination of a
contract by claiming that termination would be disproportionate or unfair in the circumstances. 137 This assumption, which was implicitly
endorsed by the Supreme Court of Appeal in this matter, 138 is based on a misreading of the ratio decidendi (rationale for the decision) in Botha
and rests on a misconception of what that case was about. Botha did not rewrite the legal position on equity in our law of contract. This court
did not hold in Botha that disproportionality or unfairness are separate, self­standing grounds, upon which a court may generally refuse to
enforce contractual provisions. Botha must be understood within the context of the relevant statutory scheme in issue. 139 Botha was primarily

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
concerned with the question whether the seller's contractual right to cancel for breach could be enforced within the statutory scheme created
by s 27(1) of the Act. 140
[60] The Supreme Court of Appeal's failure to either apply or distinguish Botha in this matter is most unfortunate. The fundamental doctrine of
precedent is a core component of the rule of law. 141 This doctrine has been endorsed by both this court and the Supreme Court of Appeal. To
deviate from it is to invite legal chaos and undermine a founding value of our Constitution. 142 The Supreme Court of Appeal failed to properly
engage with this court's reasoning in Botha. It went further, chastising the High Court for not following its decisions, whilst at the same time
departing from the decisions of this court. 143
Comparative jurisprudence on the role of good faith
[61] The role of good faith within a legal system depends, in some measure, on its legal tradition. Good faith has its firm place in the legal
frameworks of civil law jurisdictions where it often exists as a free­standing doctrine. 144 Although there is not absolute uniformity across civil
law jurisdictions, a duty to act in good faith in contractual relations is generally recognised. 145
[62] German law has for a long time recognised good faith, in the form of 'Treu und Glauben' (fidelity and faith) in its German Bürgerliches
Gesetzbuch (German Civil Code). 146 Article 242 of the Code (the good

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
faith clause) provides that '(a)n obligor has a duty to perform according to the requirements of good faith, taking customary practice into
consideration'. This provision has generously been interpreted to mean 'rights have to be exercised and duties have to be fulfilled according to
good faith'. 147 Article 242 does not render judicial enforcement of contracts subject to judicial discretion to decide cases having regard to
notions of fairness and equity. Du Plessis, an academic, explains:
'(T)he good faith clause does not provide judges with a general equitable discretion to decide cases according to subjective notions of fairness. Its application
rather requires a careful weighing up of relevant interests, which enables specific new legal instruments to be developed. . . . The care which the courts exercise
in applying the provision, and the degree of precision required when relying on it, is neatly summarised [as follows:]
...
Most cases [involving the application of section 242 of the German Civil Code] can be assigned to one of a number of well­defined rules which have all been
developed by the courts under the umbrella of section 242 of the German Civil Code, but which now lead a separate and independent existence so that
figuratively speaking, the statutory foundation of section 242 of the German Civil Code could be withdrawn without any risk of having the judge­made edifice
collapse. It would be a poor advocate who would simply cite section 242 of the German Civil Code to the judge to invite him to dispense justice to his client
according to the principles of good faith and fair dealing. What would be expected of him would be references to the more specific doctrines.
Ultimately, therefore, the devil is in the detail: the good faith clause works because specific rules give effect to it. Those rules were hammered out on the anvil
of concrete cases and incremental scholarly analysis.' 148

Properly understood, the role of good faith in German contract law appears to bear striking similarity to the role of good faith in our law as
evidenced by the approach of the Supreme Court of Appeal in Brisley, Afrox Healthcare and York Timbers.
[63] French law recognises, in general, principles of good faith in both the negotiation and performance of contracts. Its genesis is to be found
in le Code civil des Français (French Civil Code), albeit in a very restricted form in practice — case law and practical application of the Code's
provisions were dominated, instead, by the concepts of contractual autonomy and consensus. 149 Over the previous two centuries,

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
however, there has been a marked development of the principle of good faith in French contract law. It is now generally recognised that good
faith is a central principle in the negotiation and performance of contracts. 150
[64] In common­law jurisdictions, courts have historically been reluctant to recognise a free­standing doctrine of good faith. In England and
Wales, the courts have declined to find a general duty of good faith, preferring instead to develop specific doctrines that mitigate unfairness in
particular cases. There is thus no general duty to negotiate or perform contracts in good faith in English law. In Interfoto, Bingham LJ,
described the English approach to regulating problems of unfairness in contract law:
'English law has, characteristically, committed itself to no such overriding principle [of good faith] but has developed piecemeal solutions in response to
demonstrated problems of fairness.' 151 [Emphasis added.]

[65] English courts have developed a number of specific doctrines in response to 'problems of unfairness'. For example, the courts may require a
contractual discretion to be exercised reasonably, 152 and may be prepared to imply a term of good faith where this is consistent with the
intentions of the contracting parties. 153 In addition, the United Kingdom introduced a good faith principle in specific areas in accordance with
European Union law. 154

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[66] Scotland, another mixed legal system, has largely followed the English tradition of no general duty of good faith in contract. 155 T h e
influence of the English tradition is also felt further afield. In Hong Kong, courts are faithful to the traditional common­law approach. In
Aktieselskabet Dansk Skibsfinansiering, the Hong Kong Court of Appeal declined to find a self­standing doctrine of good faith in the law of
contract and approvingly cited Bingham LJ in Interfoto. 156
[67] Canada, also a common­law jurisdiction, is more receptive to the principle of good faith. The Supreme Court of Canada, in Bhasin, 157
affirmed that good faith is a 'general organising principle' of the Canadian common law of contract — which underpins and informs the various
rules in the common law. 158 The court held that 'a duty of honest performance' flows directly from the common­law organising principle of
good faith. 159 The court carefully delimited the scope of this duty, noting: 'It is a simple requirement not to lie or mislead the other party
about one's contractual performance.' 160
[68] The decision in Bhasin heralded a significant break from the previous approach to judicial control of contractual relations in Canada, in
which notions of good faith 'applied to particular types of contracts, particular types of contractual provisions and particular contractual
relationships'. 161 However, the court in Bhasin did not go so far as to recognise good faith as a self­standing rule, the breach of which is
enforceable in and of itself. Rather, it is a principle that permeates throughout existing doctrines and stipulates in general terms 'a requirement
of justice from which more specific legal doctrines may be derived'. 162 The court also left open the door to novel claims, acknowledging that
the list of good faith doctrines 'is not closed' and that the organising principle 'should be developed where the existing law is found to be
wanting'. 163
[69] Australia has no general doctrine of good faith. 164 The position varies between states, with some states showing a greater willingness to
recognise good faith duties. 165 Duties of good faith have been implied in

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
specific species of contract. 166 Significantly, in Vodafone, 167 the New South Wales Court of Appeal held that a duty to perform contractual
obligations in good faith may be implied even in ordinary commercial contracts unless expressly excluded. 168 The court described good faith as
encompassing a duty to act honestly and reasonably. 169
[70] This analysis demonstrates that there is a wide range of approaches to the role of good faith in the judicial control of contracts in
comparative jurisdictions. While foreign law provides a useful comparison, the approach adopted by this court must fit our own context, in
particular the requirements of our Constitution.
The role of the Constitution, fairness, reasonableness, justice and ubuntu
[71] There is only one system of law in our constitutional democracy. As recognised by this court in Pharmaceutical Manufacturers, this system
of law is shaped by the Constitution, which is the supreme law, and all law, including the common law, derives its force from the Constitution
and is subject to constitutional control. 170 The determination of public policy is now rooted in the Constitution and the objective, normative
value system it embodies. 171 Constitutional rights apply through a process of indirect horizontality to contracts. 172 The impact of the
Constitution on the enforcement of contractual terms through the determination of public policy is profound. A careful balancing exercise is
required to determine whether a contractual term, or its enforcement, would be contrary to public policy. As explained by the Supreme Court of
Appeal in Barkhuizen SCA, 173 and endorsed by this court in Barkhuizen, 174 the Constitution requires that courts —
'employ [the Constitution and] its values to achieve a balance that strikes down the unacceptable excesses of "freedom of contract", while

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
seeking to permit individuals the dignity and autonomy of regulating their own lives'. 175 [Emphasis added.]

[72] It is clear that public policy imports values of fairness, reasonableness and justice. 176 Ubuntu, which encompasses these values, is now
also recognised as a constitutional value, inspiring our constitutional compact, which in turn informs public policy. 177 These values form
important considerations in the balancing exercise required to determine whether a contractual term, or its enforcement, is contrary to public
policy.
[73] While these values play an important role in the public policy analysis, they also perform creative, informative and controlling functions in
that they underlie and inform the substantive law of contract. 178 Many established doctrines of contract law are themselves the embodiment
of these values. 179
[74] In addition, these values play a fundamental role in the application and development of rules of contract law to give effect to the spirit,
purport and objects of the Bill of Rights. Courts are bound by s 39(2) of the Constitution to promote the spirit, purport and objects of the Bill of
Rights when developing the common law. When the common law deviates from the spirit, purport and objects of the Bill of Rights, courts are
mandated to develop it in order to remove that deviation. 180 In addition, courts must not lose sight of the transformative mandate of our
Constitution. Transformative adjudication requires courts to 'search for substantive justice, which is to be inferred from the foundational values
of the Constitution . . . that is the injunction of the Constitution — transformation'. 181
[75] These values should be used creatively by courts to draw normative impetus and develop new doctrines that address deficiencies in the
law of contract. As held by this court in Carmichele:
'The influence of the fundamental constitutional values on the common law is mandated by s 39(2) of the Constitution. It is within the matrix of this objective
normative value system that the common law must be developed.' 182

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[76] Indeed, this court has recognised the necessity of infusing our law of contract with constitutional values. 183 This requires courts to
exercise both resourcefulness and restraint. In line with this court's repeated warnings against overzealous judicial reform, the power held by
the courts to develop the common law must be exercised in an incremental fashion as the facts of each case require. 184 The development of
new doctrines must also be capable of finding certain, generalised application beyond the particular factual matrix of the case in which a court
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is called upon to develop the common law. While abstract values provide a normative basis for the development of new doctrines, prudent and
disciplined reasoning is required to ensure certainty of the law.
 Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
[76] Indeed, this court has recognised the necessity of infusing our law of contract with constitutional values. 183 This requires courts to
exercise both resourcefulness and restraint. In line with this court's repeated warnings against overzealous judicial reform, the power held by
the courts to develop the common law must be exercised in an incremental fashion as the facts of each case require. 184 The development of
new doctrines must also be capable of finding certain, generalised application beyond the particular factual matrix of the case in which a court
is called upon to develop the common law. While abstract values provide a normative basis for the development of new doctrines, prudent and
disciplined reasoning is required to ensure certainty of the law.
[77] Our case law demonstrates how abstract values have informed the development of new doctrines. In Tuckers Land Jansen JA developed
the law of contract, finding that there is an implied duty not to commit anticipatory breach. 185 This development was based on the
requirement that contracts are to be performed in good faith. 186 Similarly, in BK Tooling, the Appellate Division developed the law of contract
to permit a relaxation of the principle of reciprocity where a party to a reciprocal contract had used the other party's partial performance. 187
It did so on the grounds of fairness. 188 These cases illustrate the development of clear doctrines that brought our law of contract in line with
the values of fairness, reasonableness and justice.
[78] The scope for the development of new common law rules in our law of contract is broad. The common law must be developed so as to
promote the spirit, purport and objects of the Bill of Rights. Constitutional values have an essential role to play in the development of
constitutionally infused common­law doctrines.
The perceived divergence between this court and the Supreme Court of Appeal
[79] Much was made by the applicants in this case of a 'divergence' between the approach of this court and that of the Supreme Court of
Appeal to the judicial control of contracts. The 'divergence' is said to centre on the role of abstract values in our law of contract and whether
these values can be directly relied upon to invalidate, or refuse to enforce, contractual terms. This controversy has now been put to rest by

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
the clarification of the law as expressed by this court in Barkhuizen and Botha. There is agreement between this court and the Supreme Court
of Appeal that abstract values do not provide a free­standing basis upon which a court may interfere in contractual relationships. As mentioned,
they perform creative, informative and controlling functions. 189
[80] It emerges clearly from the discussion above that the divergence between the jurisprudence of this court and that of the Supreme Court of
Appeal is more perceived than real. Our law has always, to a greater or lesser extent, recognised the role of equity (encompassing the notions
of good faith, fairness and reasonableness) as a factor in assessing the terms and the enforcement of contracts. Indeed, it is clear that these
values play a profound role in our law of contract under our new constitutional dispensation. However, a court may not refuse to enforce
contractual terms on the basis that the enforcement would, in its subjective view, be unfair, unreasonable or unduly harsh. These abstract
values have not been accorded autonomous, self­standing status as contractual requirements. Their application is mediated through the rules of
contract law including the rule that a court may not enforce contractual terms where the term or its enforcement would be contrary to public
policy. It is only where a contractual term, or its enforcement, is so unfair, unreasonable or unjust that it is contrary to public policy that a
court may refuse to enforce it.
[81] The rule of law requires that the law be clear and ascertainable. As stated by this court in Affordable Medicines: 'The law must indicate
with reasonable certainty to those who are bound by it what is required of them so that they may regulate their conduct accordingly.' 190 The
application of the common­law rules of contract should result in reasonably predictable outcomes, enabling individuals to enter into contractual
relationships with the belief that they will be able to approach a court to enforce their bargain. It is therefore vital that, in developing the
common law, courts develop clear and ascertainable rules and doctrines that ensure that our law of contract is substantively fair, whilst at the
same time providing predictable outcomes for contracting parties. This is what the rule of law, a foundational constitutional value, requires. 191
The enforcement of contractual terms does not depend on an individual judge's sense of what fairness, reasonableness and justice require. To
hold otherwise would be to make the enforcement of contractual terms dependent on the 'idiosyncratic inferences of a few judicial minds'. 192
This would introduce an unacceptable degree of uncertainty into our law of contract. The resultant uncertainty would be inimical to the rule of
law.

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
[82] There has, in fact, largely been general uniformity of principles between the two courts. In Pridwin, the Supreme Court of Appeal set out
what it views as the 'most important principles' governing the judicial control of contracts through the instrument of public policy. It said:

'(i) Public policy demands that contracts freely and consciously entered into must be honoured;

(ii) a court will declare invalid a contract that is prima facie inimical to a constitutional value or principle, or otherwise contrary to public policy;

(iii) where a contract is not prima facie contrary to public policy, but its enforcement in particular circumstances is, a court will not enforce it;

(iv) the party who attacks the contract or its enforcement bears the onus to establish the facts;

(v) a court will use the power to invalidate a contract or not to enforce it, sparingly, and only in the clearest of cases in which harm to the public is
substantially incontestable and does not depend on the idiosyncratic inferences of a few judicial minds;

(vi) a court will decline to use this power where a party relies directly on abstract values of fairness and reasonableness to escape the consequences of a
contract because they are not substantive rules that may be used for this purpose.' 193

These principles are derived from a long line of cases and find support in the decisions of this court. There are, however, two principles listed by
the Supreme Court of Appeal in Pridwin which require further elucidation.
[83] The first is the principle that '(p)ublic policy demands that contracts freely and consciously entered into must be honoured'. 194 This court
has emphasised that the principle of pacta sunt servanda gives effect to the 'central constitutional values of freedom and dignity'. 195 It has
further recognised that in general public policy requires that contracting parties honour obligations that have been freely and voluntarily
undertaken. 196 Pacta sunt servanda is thus not a relic of our pre­constitutional common law. It continues to play a crucial role in the judicial
control of contracts through the instrument of public policy, as it gives expression to central constitutional values.
[84] Moreover, contractual relations are the bedrock of economic activity and our economic development is dependent, to a large extent, on
the willingness of parties to enter into contractual relationships. If parties are confident that contracts that they enter into will be upheld, then
they will be incentivised to contract with other parties for their mutual gain. 197 Without this confidence, the very motivation for social
coordination is

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diminished. It is indeed crucial to economic development that individuals should be able to trust that all contracting parties will be bound by
obligations willingly assumed.
[85] The fulfilment of many of the rights promises made by our Constitution depends on sound and continued economic development of our
country. Certainty in contractual relations fosters a fertile environment for the advancement of constitutional rights. The protection of the
sanctity of contracts is thus essential to the achievement of the constitutional vision of our society. Indeed, our constitutional project will be
imperilled if courts denude the principle of pacta sunt servanda.
[86] However, the pre­constitutional privileging of pacta sunt servanda is not appropriate under a constitutional approach to judicial control of
enforcement of contracts. Prior to our constitutional era, in Wells, 198 the Appellate Division cited an English authority to the effect that —
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liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and enforced by courts'.
 sanctity of contracts is thus essential to the achievement of the constitutional vision of our society. Indeed, our constitutional project will be
imperilled if courts denude the principle of pacta sunt servanda.
[86] However, the pre­constitutional privileging of pacta sunt servanda is not appropriate under a constitutional approach to judicial control of
enforcement of contracts. Prior to our constitutional era, in Wells, 198 the Appellate Division cited an English authority to the effect that —
'(i)f there is one thing, which more than another, public policy requires, it is that [individuals] of full age and competent understanding shall have the utmost
liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and enforced by courts'. 199

[87] In our new constitutional era, pacta sunt servanda is not the only, nor the most important principle informing the judicial control of
contracts. The requirements of public policy are informed by a wide range of constitutional values. There is no basis for privileging pacta sunt
servanda over other constitutional rights and values. Where a number of constitutional rights and values are implicated, a careful balancing
exercise is required to determine whether enforcement of the contractual terms would be contrary to public policy in the circumstances. 200
[88] The second principle requiring elucidation is that of 'perceptive restraint', which has been repeatedly espoused by the Supreme Court of
Appeal. 201 According to this principle a court must exercise 'perceptive restraint' when approaching the task of invalidating, or refusing to
enforce, contractual terms. It is encapsulated in the phrase that a 'court will use the power to invalidate a contract or not to enforce it,
sparingly, and only in the clearest of cases'. 202
[89] This principle follows from the notion that contracts, freely and voluntarily entered into, should be honoured. This court has recognised

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
as sound the approach adopted by the Supreme Court of Appeal that the power to invalidate, or refuse to enforce, contractual terms should
only be exercised in worthy cases. 203
[90] However, courts should not rely upon this principle of restraint to shrink from their constitutional duty to infuse public policy with
constitutional values. Nor may it be used to shear public policy of the complexity of the value system created by the Constitution. Courts should
not be so recalcitrant in their application of public policy considerations that they fail to give proper weight to the overarching mandate of the
Constitution. The degree of restraint to be exercised must be balanced against the backdrop of our constitutional rights and values.
Accordingly, the 'perceptive restraint' principle should not be blithely invoked as a protective shield for contracts that undermine the very goals
that our Constitution is designed to achieve. Moreover, the notion that there must be substantial and incontestable 'harm to the public' before a
court may decline to enforce a contract on public policy grounds is alien to our law of contract. 204
Application to the facts
[91] Have the applicants discharged the onus of demonstrating that the enforcement of the renewal clauses would be contrary to public policy
in the particular circumstances of this case? A party who seeks to avoid the enforcement of a contractual term is required to demonstrate good
reason for failing to comply with the term. 205 The rationale for this was explained in Barkhuizen:
'For all we know he may have neglected to comply with the clause in circumstances where he could have complied with it. And to allow him to avoid its
consequences in these circumstances would be contrary to the doctrine of pacta sunt servanda. This would indeed be unfair to the respondent.' 206

[92] The public policy imperative to enforce contractual obligations that have been voluntarily undertaken recognises the autonomy of the
contracting parties and, in so doing, gives effect to the central constitutional values of freedom and dignity. 207 This imperative provides the
requisite legal certainty to allow persons to arrange their affairs in reliance on the undertakings of the other parties to a contract, and to

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
coordinate their conduct for their mutual benefit. 208 While the explanation provided is not the only relevant consideration, it is critical in the
overall assessment of whether enforcement would be contrary to public policy in all the particular facts and circumstances of a case. In
Barkhuizen, the majority held that, in the absence of facts establishing why the applicant did not comply with the clause, it was unable to
conclude that its enforcement would be contrary to public policy. 209 The absence of any explanation for the failure to comply will, in most
cases, be the end of the enquiry.
[93] The applicants, relying on Barkhuizen, approached the High Court on the ground that enforcement of the renewal clauses would be
contrary to public policy. The only reasons advanced by the applicants for their failure to comply with the terms of the renewal clauses were
that they were not sophisticated businesspeople and not fully apprised of their rights and obligations regarding their options to renew the
leases. The Supreme Court of Appeal rejected this argument:
'(T)he representatives of the lessees had all operated franchises, and had previously been store or regional managers. They were not ignorant individuals.
They may not have fully appreciated the niceties of the law, but they knew that they had to give notice — they attempted to do so after the notice period had
elapsed.' 210

[94] The terms of each lease governing termination and renewal are clear and easy to understand. Each lease provides that the termination
date is 31 July 2016 and the renewal clause provides that the lessee must provide written notice of its exercising of its renewal option 'at least
six (6) months prior to the termination date'. These terms appear in simple, uncomplicated language, which an ordinary person could reasonably
be expected to understand.
[95] The inescapable inference is that there were no circumstances that prevented the applicants from complying with the terms of the renewal
clauses in the leases. The clauses were favourable to the applicants. The only inference to be drawn is that the applicants simply neglected to
comply with the clauses in circumstances where they could have complied with them. It follows that the applicants have failed to discharge the
onus resting on them to demonstrate that in the circumstances of this case, the enforcement of the clauses would be contrary to public policy.
Their case must suffer the same fate as that of the applicant in Barkhuizen.
[96] The applicants submit that the enforcement of the renewal clauses would be contrary to public policy, as it would lead to the failure of a
black economic empowerment initiative financed by the Fund with

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public money. This harsh outcome alone, absent an explanation for their failure to comply with the terms of the renewal clauses, cannot
constitute a sufficient basis to hold that the enforcement of the clauses would be contrary to public policy. The applicants were afforded an
opportunity to run their own businesses through the financial support of the Fund and the administrative and technical support of Sale's Hire.
The possible failure of this commendable black economic empowerment initiative is attributable entirely to their unexplained failure to comply
with the renewal clauses.
[97] I do not consider the conduct of the Trust as snatching at a bargain or exploiting a mere technical slip on the part of the applicants. The
applicants' failure to exercise their right of renewal within the requisite notice period resulted in the termination of the lease agreements by
effluxion of time. There was no cancellation of the lease agreements on the part of the Trust. Instead, the termination occurred automatically
by operation of the clear terms of the lease agreements regarding the termination date, in the absence of a valid renewal.
[98] In any event, it would seem that the termination of the applicants' franchise agreements does not follow automatically upon the
termination of their lease agreements. It appears to be within the discretion of Sale's Hire, as the franchisor, to allow the applicants to operate
their businesses from different premises. 211 The collapse of the applicants' businesses will only take place if Sale's Hire elects to exercise its
contractual power to terminate the franchise agreements. 212 The exercise of this contractual power possibly may then be challenged by the
applicants.
Equality argument
[99] The applicants have failed to adequately explain how the enforcement of the strict terms of the renewal clauses would be contrary to
public policy. They contended that enforcement would be inimical to the constitutional value of equality as enunciated in s 9(2) of the
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Constitution. Section 9(2) provides that '(e)quality includes the full and equal enjoyment of all rights and freedoms'. This provision recognises
that the constitutional promise of equality cannot be sustained merely by the achievement of formal equality: it authorises the taking of
 applicants.
Equality argument
[99] The applicants have failed to adequately explain how the enforcement of the strict terms of the renewal clauses would be contrary to
public policy. They contended that enforcement would be inimical to the constitutional value of equality as enunciated in s 9(2) of the
Constitution. Section 9(2) provides that '(e)quality includes the full and equal enjoyment of all rights and freedoms'. This provision recognises
that the constitutional promise of equality cannot be sustained merely by the achievement of formal equality: it authorises the taking of
'legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination'. The
Constitution enjoins courts to actively advance substantive equality by dismantling the various patterns of disadvantage that still plague our
society. 213 As this court held in Van Heerden:

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Theron J (Khampepe ADCJ, Jafta J, Majiedt J, Mathopo AJ, Mhlantla J and Tshiqi J concurring)
'(W)hat is clear is that our Constitution and in particular s 9 thereof, read as a whole, embraces for good reason a substantive conception of equality inclusive
of measures to redress existing inequality. Absent a positive commitment progressively to eradicate socially constructed barriers to equality and to root out
systemic or institutionalised underprivilege, the constitutional promise of equality before the law and its equal protection and benefit must, in the context of our
country, ring hollow.' 214

[100] Section 1 of the Constitution provides that South Africa is founded on values including human dignity, the achievement of equality and
the advancement of human rights and freedoms. This provision underscores that equality is a foundational democratic value and that the
Constitution envisages the taking of active steps towards substantive equality. 215 This stems from the fact that the Constitution is a
transformative document and the lodestar of an ongoing constitutional project to achieve a democratic and egalitarian society. 216 This court
has held that 's 9(2), as an instrument for transformation and the creation of an equal society, is powerful and unapologetic'. 217
[101] The National Empowerment Fund Act established the Fund to facilitate the redress of economic inequality that resulted from unfair
discrimination against historically disadvantaged persons. 218 This falls within the scope of the 'measures' envisioned by s 9(2) of the
Constitution (as would initiatives funded by the Fund). The applicants have not shown that the failure of their businesses, in these
circumstances, would unjustifiably undermine substantive equality. To hold that the failure of a black economic empowerment initiative financed
by the Fund renders the enforcement of the renewal clauses deleterious to the constitutional value of equality would have the undesirable
result of defeating the Fund's own objects. This is because the effect of this finding would increase the risk of contracting with historically
disadvantaged persons who benefit from the Fund. If the applicants were to succeed, it would establish the legal principle that enforcement of
a contractual term would be inimical to the constitutional value of equality, and therefore contrary to public policy, where enforcement would
result in the failure of a black economic empowerment initiative. This could, in turn, deter other parties from electing to contract with
beneficiaries of the Fund, or force beneficiaries to offset the increased risk by making concessions on other contractual aspects during contract
negotiations. These outcomes

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Froneman J (Madlanga J concurring):

would, in effect, undermine the very objects that the Fund and s 9(2) seek to achieve.
Conclusion
[102] The applicants have failed to discharge the onus of demonstrating that the enforcement of the impugned contractual terms would be
contrary to public policy. It is fatal to the applicants' case that they did not adequately explain why they did not comply with the terms that
they seek to avoid. In any event, the public policy considerations advanced by the applicants are insufficient to demonstrate that it would be
contrary to public policy to enforce the terms they seek to avoid.
[103] For these reasons, the application must fail on the merits. There is no reason why costs should not follow the result.
Order
[104] The following order is made:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the costs of two counsel.
Judgment
Froneman J (Madlanga J concurring):
Introduction
[105] I have had the benefit of reading the path­breaking judgment of my sister Theron J (first judgment). The first judgment sets the
regulation of fairness in our contract law squarely and unambiguously within the ambit of our constitutional value system. Why write separately
then? Three reasons, mainly.
[106] The first is that it might lead to greater clarity and understanding of the divergence in approach between the Supreme Court of Appeal
and this court to explain that the regulation of unfairness in contract law is never simply a 'legal' one that can be deduced from supposedly
neutral legal principles in a self­executing way. This kind of regulation inevitably involves making an underlying moral or value choice. The first
judgment makes clear that these choices must be made within the objective value system of the Constitution. It does not, however, consider it
necessary to develop or give further guidance as to how these objective values are to be translated into practical application. That is the
second reason.
[107] Although it is commendable to seek similarities in this court's and the Supreme Court of Appeal's approaches, I am less sanguine that the
remaining dissimilarities can be overcome without emphasising what I consider to be unambiguous and authoritative statements about the role of
constitutional values and rights in our law of contract by this court in Barkhuizen. 219 Although I do not consider the Supreme Court of Appeal's
own solution to the problem as any better than the criticism

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of this court's perceived misguided approach, I accept that our purpose must be to delineate reasonably certain, practical and objective legal
principles and rules to guide prospective contracting parties. In so doing the caricature of rogue judges imposing their own subjective and
arbitrary opinions of what is fair and reasonable upon unsuspecting litigants must be dispelled.
[108] The approach suggested in this judgment is that this outcome is best achieved by recognising that the individualism of our law of
contract is one that has always taken account of the reasonable expectations of the parties to the contract as well as those of the wider
community. This can be done in a manner that ensures objectivity, reasonable practicality and certainty.
[109] The last reason is that the facts call for a different outcome from that proposed in the first judgment. While acknowledging that it is a
hard call, I conclude that the first judgment errs in not intervening in the order of the Supreme Court of Appeal. The appeal must succeed.
The morality of contract law
[110] A country's choice of how it conceives its contract law is influenced by its social, political and economic history, how it views that history
and how it chooses to forge its fundamental values into its conception of contract law. 220 This should not be a controversial statement. There
are discernible differences in perspective and emphasis in what was, before the Constitution, the two sources of our mixed legal system, the
civilian tradition and the English common law tradition. To that mixed legal heritage the Constitution now adds its own overarching objective
value system. This must inform not only our views on our mixed common law and civilian heritage, but must embrace also the neglected 'third
grace' 221 of our legal heritage, namely African customary law and tradition. 222
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 are discernible differences in perspective and emphasis in what was, before the Constitution, the two sources of our mixed legal system, the
civilian tradition and the English common law tradition. To that mixed legal heritage the Constitution now adds its own overarching objective
value system. This must inform not only our views on our mixed common law and civilian heritage, but must embrace also the neglected 'third
grace' 221 of our legal heritage, namely African customary law and tradition. 222
[111] Despite differences in approach between civil law and common law systems, it is now recognised that both grapple with the same
problem, namely regulating fairness in contract law. In Interfoto, Bingham LJ said:
'In many civil law systems, and perhaps in most legal systems outside the common law world, the law of obligations recognises and enforces

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Froneman J (Madlanga J concurring):

an overriding principle that in making and carrying out contracts parties should act in good faith. This does not mean simply that they should not deceive each
other. . . . (I)ts effect is perhaps most aptly conveyed by such metaphorical colloquialisms as "playing fair", "coming clean" or ''putting one's own cards face
upwards on the table''. It is in essence a principle of fair and open dealing. . . . English law has, characteristically, committed itself to no such overriding principle
but has developed piecemeal solutions in response to demonstrated problems of fairness.' 223

[112] Fairness is thus universally recognised as integral to any system of contract law. How should it be dealt with — general principles or
piecemeal solutions? This remains contentious, as does the particular conception of fairness that should prevail. 224 To give content to fairness
entails a moral choice or value judgment.
[113] Over time in civilian and common­law tradition the conception of fairness in contract law has changed. It is instructive to understand this
evolving process in how fairness in contract was and is perceived. First, because these traditions form part of our mixed legal heritage; second,
because we might unwittingly and uncritically cling to a particular conception of fairness that may have outlived its usefulness; and, third,
because it is now our duty to ensure that our own conception of fairness in contract accords with the Constitution's value system. This point
has been articulated in the first judgment. We can only do this if we know and understand where our current ideas come from.
Three conceptions of fairness in contract
Equality in exchange
225
[114] This idea of fairness is explained by Gordley, as —
'the ancient idea that in an exchange the value of what each party gives should be equal to the value of what he receives. Once, when university study of law
meant primarily the study of an idealized Roman Law, academic jurists regarded this idea as a basic principle of the law of contracts. They did not expect the law
to remedy every unequal exchange, for to do so might be unsettling for commerce. But they regarded an unequal exchange as unjust in principle and thought
that the law should provide a remedy where practical.'

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[115] Gordley traces the history of this idea from its origin in Roman law texts to the development by medieval jurists of the civilian doctrine of
laesio enormis (extraordinary injury), not merely as a remedy to recover land sold at less than half its price, but as a generalised remedy for
one­sided contracts; and finally to the explicit link between this remedy and the Aristotelian principle of commutative justice, the justice owing
between two individuals. 226 In contract that principle requires that parties exchange performances of more or less equal value, also expressed
as the idea that the exchange should impose the same burden on each of the parties. 227
The rise of unfettered freedom of contract
[116] But the rich moral content of the intellectual tradition that located the purpose of the law of contract in ensuring equality in exchange
was abandoned by what is known as the 'classical law of contract', forged mainly in the nineteenth century. 228 In its place came a framework
of 'a thin collection of organizing principles', 229 focused on supposedly 'voluntary choices by individuals'. 230 This analytical framework,
preserving as cardinal the principle of respecting and enforcing voluntary choices, established a closed system of thought that excluded
inconsistent rules and doctrines. 231
[117] In his authoritative study, Atiyah 232 describes the individualism underlying this approach:
'(T)he contents of the contract, the terms and the price and the subject­matter are entirely for the parties to settle. It is assumed that the parties know their
own minds . . . that they will calculate the risks and future contingencies that are relevant, and that all these enter into the bargain. It follows that the unfairness
of the bargain — gross inadequacy or excess of price — is irrelevant, and once made the contract is binding.' 233

[118] This created a closed and self­executing system in terms of its internal logic:
'Contract, in other words, was the vehicle through which autonomy and rational planning could be simultaneously promoted, the former by respecting the
parties' free choices, and the latter by channelling the parties towards performance by holding those in breach responsible for letting down their fellow
contractors. Or, to put this in terms that marry the classical law with the foundational ideas of freedom of contract and sanctity of contract, contract serves
autonomy by adopting the principle

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Froneman J (Madlanga J concurring):

of freedom of contract, and contract underpins rational planning by adopting the principle of sanctity of contract.' 234

[119] It should not be overlooked that the classical 19th century interpretation of freedom of contract and the market order also laid claim to
fairness. 235 The normative justification for this notion of freedom of contract lies in its claim to promote and sustain liberty, equality and
fairness in exchange. Its protection of individual liberty and freedom lies in the extensive freedom it gives to individuals to decide who to
contract with, on what terms to contract and in the protection of the sanctity of contract. Its protection of equality lies at a formal level of
equality of opportunity: every person has the same set of rights to enter contracts and own property — no distinctions of rank and privilege
apply. Lastly, fairness finds expression in the reciprocity of exchange: both parties to a contract give up something of value in return for
something that was desired. Interference to ensure equivalence in value thus becomes unnecessary. Collins says it best:
'No one enters a transaction voluntarily unless he or she expects to benefit from it, so that every voluntary bargain must be fair, because it should leave each
party better off than before.' 236

The decline and transformation of freedom of contract

[120] Atiyah documented the decline of the rigid conception of the freedom of contract as a process by which '(f)reedom of choice was
whittled down in many directions, government regulation replaced freedom [of] contract . . . and paternalism once again was the order of the
day'. 237 This process still continues in different forms.
[121] In descriptive terms the market system and content of its legal regulation has altered dramatically. It cannot be described as a system
based on individual freedom of contract. 238 In Europe the two most important developments are said to be the legislative protective regime in
the mass consumer market and 'the growing recognition that relational commercial dealing needs its own regulatory framework'. 239 A normative

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240
concern is the inequality in power relations created and maintained by a narrow and rigid conception of freedom of contract.
[122] The notion that freedom of contract speaks for itself in only one voice has also been debunked. Contract law cannot protect freedom in
the abstract, because, unless one asks what goals each of the contracting parties pursues, one will not be able to determine the kind of
freedom that needs to be protected. Kennedy explains:
'(W)ithout doing violence to the notion of voluntariness as it has been worked out in the law, [we] could adopt a hard­nosed, self­reliant, individualist posture
that shrinks the defences of fraud and duress to almost nothing. At the other extreme, [we] could require the slightly stronger or slightly better­informed party to
give away all his advantage. . . . If we cut back the rules far enough, we would arrive at something like the state of nature — legalized theft. If we extended
them far enough, we would jeopardize the enforceability of the whole range of bargains that define a mixed capitalist economy. . . . In either extreme case we
would have departed from freedom of contract — the concept has some meaning and imposes some loose limits.' 241
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primarily in doctrines of unconscionability and good faith. 242 Common­law systems appear to prefer the former and civil law systems the latter,
 '(W)ithout doing violence to the notion of voluntariness as it has been worked out in the law, [we] could adopt a hard­nosed, self­reliant, individualist posture
that shrinks the defences of fraud and duress to almost nothing. At the other extreme, [we] could require the slightly stronger or slightly better­informed party to
give away all his advantage. . . . If we cut back the rules far enough, we would arrive at something like the state of nature — legalized theft. If we extended
them far enough, we would jeopardize the enforceability of the whole range of bargains that define a mixed capitalist economy. . . . In either extreme case we
would have departed from freedom of contract — the concept has some meaning and imposes some loose limits.' 241

[123] Freedom of contract can thus never be absolute. It is constrained, inevitably. Modern remedies for regulating unfairness are found
primarily in doctrines of unconscionability and good faith. 242 Common­law systems appear to prefer the former and civil law systems the latter,
but there is much cross­pollination in between. 243 Both approaches appear to eschew reliance on the idea of equality or equivalence in
exchange. But, without that, it is unclear what objective reference point provides the normative justification for regulating unfairness in
contracts.
[124] There appear to be two possibilities: (i) the standards of fair dealing recognised by the community of which the contractors are part; and
(ii) the standards of fair dealing and cooperation in terms of the best moral theory. Contract law prefers practicality to theory, so the best
standard appears to be one that reflects the expectations associated with good commercial practice. 244
[125] What could those be? Gordley suggests that it always comes back to the ancient idea of equality in exchange:
'It seems hard to maintain that a "disproportion" in the values exchanged is of itself neither unfair nor an evil to be remedied, but one that exploits another's
precarious situation and causes such a disproportion is acting against good morals. A situation can only be described as "precarious" by reference to some
harmful consequences that might

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occur. Conduct can only be described as exploitive if some unfair advantage is taken. Yet here, the only harm that attends the precarious situation of the one
party, and the only advantage taken of him by the other, seems to be the disproportionality in the values exchanged. If the disproportion were not viewed as an
evil in itself, it is hard to see why one would care about either the situation or the conduct.' 245

[126] And he discounts the argument that it is impossible to determine the disproportion objectively and in a practically ascertainable way:
'The greater and more certain the harm and the less the ability to protect against it, the more willing the court should be to give a remedy.
...
The disproportion in the [exchange] is itself reason for giving relief. That does not mean that relief should be given whenever an exchange is disproportionate.
If the courts are not to cause more inequalities than they cure, they should confine relief to cases where the [exchange] is clearly disproportionate and the
disadvantaged party is badly hurt and less able to protect himself.' 246

[127] Has our law of contract seen similar developments? The answer is, Yes.
Closer to home — before the Constitution
[128] The doctrine of laesio enormis did not survive European codifications of the civil law, 247 but it survived longer in our non­codified
Roman­Dutch law. It was eventually abolished by s 25 of the General Law Amendment Act 248 after the decision of the Appellate Division in
Tjollo, only in the middle of the last century. 249
[129] There was also the exceptio doli. This was not explicitly linked to equality in exchange, but remained as a general legal device that could
prevent a party from exercising a right in a manner that did not measure up to the standard of good faith. That equitable instrument was
abolished in our law of contract by the Appellate Division in Bank of Lisbon. 251 The wisdom of that decision remains doubtful. As noted by
Jacques du Plessis:
'Zimmermann prophesied three decades ago that the exceptio doli may "haunt the courts and legal writers from its grave". . . . [T]his prophecy has been
fulfilled: determining when a party may be prevented from exercising a contractual right is now one of the most pressing problems in modern contract law.' 252

[130] Of particular interest to South African law is that the rise of freedom of contract as a closed and self­executing system accorded with

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the Pandectist notion of law as a formalistic science, the rules and methods of which were derived from the system itself. 252 This limited role
of normative principles within law influenced many jurists, mainly those of Afrikaans descent, who studied in Germany. 253 These included JC de
Wet, whose work on contract law exerted an enormous influence.
[131] As explained by Lubbe, 254 De Wet was certainly influenced by the Pandectists, but not slavishly so. What he derived from them was a
methodology that seeks to give the whole of private law a coherent conceptual structure that at the same time provides the general principles
from which the application of rules to individual cases follow and from which new related concepts could be constructed to cover new
situations. The conceptual framework has an ethic and logic of its own and, provided this is used properly, no further normative work needs to
be done in adjudication. The underlying normative premise is that the personal autonomy and individual responsibility contract law provides is
sufficient guarantee for ethically acceptable results. Judicial interference is thus unnecessary.
[132] This closed and self­executing nature of the system in terms of its internal logic probably explains why it was and is often seen as an
axiomatic truth that needs no further explaining. In his seminal article, titled 'Substance and Form in the Law of Contract', Cockrell describes its
effect on our law of contract:
'It should be obvious to anyone familiar with the South African law of contract that the privileged position here is occupied by a substantive individualism
couched in a rules­based form. Freedom of contract, the sanctity of individual promises, the minimal role for the courts in matters of contractual agreement, the
need for certainty in the law — these are the ideas which permeate the surface of the law. But it is important to note that this privileging invariably proceeds on
the basis that the preference for individualism and the rules­form is an axiomatic truth rather than a controversial premiss in an ongoing argument.' 255

[133] Cockrell and others 256 have shown that, both on a purely descriptive and also on a normative level, a rigid conception of freedom of
contract fails to fully explain our own law of contract, even in the pre­constitutional era. 257

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[134] This starts with the ascription of responsibility — or, more familiarly perhaps, with the question under what circumstances mistake may
nullify consent. Our law, like other systems, increasingly accepts that the demand that personal autonomy in the sense of individual consent
should prevail in contractual liability must be qualified in some form by the reasonable expectation of the other party. Here 'the principle of
autonomy shades into the principle of reliance'. 258
[135] This process of locating contractual liability outside the subjective consent of the contracting parties is continued when the content of
contractual obligations is determined. The prime examples are terms implied by law. 259 But even so­called 'tacit terms' (unspoken terms that
the parties would presumably have agreed to, if asked) are not actual; they, too, may be 'imputed'. 260 This kind of hypothetical consent is
justified by a finding by a judge that the parties would have agreed to that term if they had been made aware of its possible inclusion at the
time of concluding the contract. But they did not. The practical upshot is that the judge makes that part of their contract for the parties.
[136] Our highest courts have repeatedly recognised that good faith underlies our law of contract. 261 It has been used as an informing value
for the development of our law in relation to anticipatory breach of

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contract, 262 cession, 263 auction bids, 264 the modification of notice terms by conduct, 265 and for allowing for a relaxation of the principle
of reciprocity and the award of a reduced contract price. 266
[137] The defences of misrepresentation, duress and undue influence are often explained on the basis that they instance defects in the
promisor's volition. 267 But the more obvious explanation for these defences may be that either they spring from improper conduct by the
promisee, instancing bad faith conduct from which the law will not allow the promisee to benefit, 268 or are legal rules to undo an unfair
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bargain. 269
 contract, 262 cession, 263 auction bids, 264 the modification of notice terms by conduct, 265 and for allowing for a relaxation of the principle
of reciprocity and the award of a reduced contract price. 266
[137] The defences of misrepresentation, duress and undue influence are often explained on the basis that they instance defects in the
promisor's volition. 267 But the more obvious explanation for these defences may be that either they spring from improper conduct by the
promisee, instancing bad faith conduct from which the law will not allow the promisee to benefit, 268 or are legal rules to undo an unfair
bargain. 269
[138] Another patent overruling of freedom of contract occurs when a contract is not enforced because of reasons of public policy. In
Sasfin,270 the Appellate Division examined the substantive fairness of a deed of cession and concluded that it was clearly unconscionable and
incompatible with the public interest. In our law it is now established that covenants in restraint of trade will not be enforced where
enforcement would be contrary to public policy, especially in cases where there is no legitimate business interest in the restraint. Cockrell states
that —
'for else there is no benefit which will outweigh the prima facie harm that results from the restrictions on the liberty of a citizen to pursue his or her trade. The
influence of considerations of public harm is clear, for the individual assessment of personal interest is overreached by the broader interests of the community in
maintaining the institutional practices of free trade.' 271

[139] One can mention more instances of judicial interference in supposed 'freedom of contract' in our law, but the point is already clear. In the
formation of contracts, in the formulation of their terms, and in their enforcement, our courts second­guess, or 'make' and 'unmake' contracts
for parties, independently of the individual consent of the contracting parties.
[140] No wonder Cockrell despaired at our courts' denial of this obvious state of affairs and pleaded for a more realistic assessment:

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'While the strains of commitment pull relentlessly in both directions all that we can ask of contract law is that it mediate between self­interest and sociality in a
self­conscious manner that does not blindly value legal doctrine as an end unto itself.' 272

[141] As in other jurisdictions the legislature has also stepped in to supplant or supplement freedom of contract for reasons of equity. A
luminous instance is the pre­democracy Conventional Penalties Act, 273 which affords courts the radical power to reduce excessive penalties
'to such extent as [they] may consider equitable in the circumstances'. 274
[142] Lastly, it needs to be noted that in pre­constitutional South Africa the moral justification for freedom of contract was virtually non­
existent in relation to the vast majority of people. The reason was simple and brutal: there was no freedom to contract with anyone they chose
on the terms they wished, because this was forbidden by law. There was no equality of opportunity, because rank and privilege applied. There
was no proper reciprocity in exchange because the disadvantaged lacked the means to decide freely what they valued in that exchange.
[143] The law of contract regulates both productive and distributive relations. It thus functions as a key mechanism in the distribution of
wealth. 275 The undeniable inequality in the distribution of wealth over centuries in our country presents a significant impediment to the
argument that the playing field is now level and hence that the moral justification for a supposed 'freedom of contract' can simply be applied.
At home — under the Constitution
[144] The Supreme Court of Appeal jurisprudence before this court's judgment in Barkhuizen, 276 is dealt with in the first judgment. 277 Its
analysis then also finds a convergence between the Supreme Court of Appeal's and this court's approaches. The apparent differences in
approach are said to be more apparent than real. The first judgment finds:
'There is agreement between this court and the Supreme Court of Appeal that abstract values do not provide a free­standing basis upon which a court may
interfere in contractual relationships. As mentioned, they perform creative, informative and controlling functions.
It emerges clearly from the discussion above that the divergence between the jurisprudence of this court and that of the Supreme Court of Appeal is more
perceived than real. Our law has always, to a greater or lesser extent, recognised the role of equity (encompassing the notions of good faith, fairness and
reasonableness) as a factor in assessing the terms and the enforcement of contracts. Indeed, it is clear

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that these values play a profound role in our law of contract under our new constitutional dispensation. However, a court may not refuse to enforce contractual
terms on the basis that the enforcement would, in its subjective view, be unfair, unreasonable or unduly harsh. These abstract values have not been accorded
autonomous, self­standing status as contractual requirements. Their application is mediated through the rules of contract law, including the rule that a court may
not enforce contractual terms where the term or its enforcement would be contrary to public policy. It is only where a contractual term, or its enforcement, is so
unfair, unreasonable or unjust that it is contrary to public policy that a court may refuse to enforce it.' 278

[145] My concern with the repetitive statement that the so­called 'abstract' values of fairness, justice and equity, and reasonableness have no
autonomous, self­standing status is that it may be read to underplay what Barkhuizen actually decided. The statement that their application is
mediated by the common­law rule that a court may not enforce contractual terms contrary to public policy, innovatively attempts to bridge the
divide between the criticism of the application of 'abstract values' as distinct from legal rules. But as we will see, that only pushes the criticism
of so­called 'abstract values' back a step further, without offering anything better than the same abstractedness, now in the form of a 'rule'.
279

[146] Barkhuizen is authoritative and binding precedent that the application of public policy in determining the unconscionableness of
contractual terms and their enforcement must, where constitutional values or rights are implicated, be done directly in accordance with notions
of fairness, justice and equity, and reasonableness cannot be separated from public policy.
[147] Let Barkhuizen speak for itself. Before turning to the specific challenge raised on the papers before it, the general approach of
constitutional challenges to contractual terms where both parties are private parties 280 was spelled out:
'Ordinarily constitutional challenges to contractual terms will give rise to the question of whether the disputed provision is contrary to public policy. Public policy
represents the legal convictions of the community; it represents those values that are held most dear by the society. Determining the content of public policy was
once fraught with difficulties. That is no longer the case. Since the advent of our constitutional democracy, public policy is now deeply rooted in our Constitution
and the values that underlie it. Indeed, the founding provisions of our Constitution make it plain: our constitutional democracy is founded on, among other
values, the values of human dignity, the achievement of equality and the advancement of human rights and freedoms, and the rule of law. And the Bill of Rights,
as the Constitution proclaims, ''is a cornerstone'' of that democracy; ''it enshrines the rights of all the people in our country and affirms the democratic [founding]
values of human dignity, equality and freedom''.

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Froneman J (Madlanga J concurring):

What public policy is and whether a term in a contract is contrary to public policy must now be determined by reference to the values that underlie our
constitutional democracy as given expression by the provisions of the Bill of Rights. Thus a term in a contract that is inimical to the values enshrined in our
Constitution is contrary to public policy and is, therefore, unenforceable.
In my view the proper approach to the constitutional challenges to contractual terms is to determine whether the term challenged is contrary to policy as
evidenced by constitutional values, in particular, those found in the Bill of Rights. This approach leaves space for the doctrine of pacta sunt servanda to operate,
but at the same time allows courts to decline to enforce contractual terms that are in conflict with the constitutional values even though the parties may have
consented to them.' 281

[148] In dealing with the validity of time­limitation clauses it stated:

'In general the enforcement of an unreasonable or unfair time­limitation clause will be contrary to public policy. Broadly speaking the test announced in
Mohlomi is whether a provision affords a claimant an adequate and fair opportunity to seek judicial redress. Notions of fairness, justice and equity, and
reasonableness cannot be separated from public policy. Public policy takes into account the necessity to do simple justice between individuals. Public policy is
informed by the concept of ubuntu. It would be contrary to public policy to enforce a time­limitation clause that does not afford the person bound by it an
adequate and fair opportunity to seek judicial redress.
In my judgment the requirement of an adequate and fair opportunity to seek judicial redress is consistent with the notions of fairness and justice which inform
public policy. There is no reason in principle why this test should not be applicable in determining whether a time­limitation clause in a contract is contrary to
public policy.' 282

[149] It then proceeded explicitly to 'the determination of fairness' which considered, first, the unreasonableness of the time­limitation clause in
the Juta
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compliance with the time­limitation clause. 283 With regard to the former Ngcobo J felt 'unable to conclude that the 90­day period allowed to
 In my judgment the requirement of an adequate and fair opportunity to seek judicial redress is consistent with the notions of fairness and justice which inform
public policy. There is no reason in principle why this test should not be applicable in determining whether a time­limitation clause in a contract is contrary to
public policy.' 282

[149] It then proceeded explicitly to 'the determination of fairness' which considered, first, the unreasonableness of the time­limitation clause in
the contract at stake and, second, if the clause is reasonable, whether it should be enforced in light of the circumstances which prevented
compliance with the time­limitation clause. 283 With regard to the former Ngcobo J felt 'unable to conclude that the 90­day period allowed to
the applicant to sue [was] so unreasonable that its unfairness is manifest and that therefore its enforcement would be contrary to public
policy' [own emphasis]. 284
[150] In relation to the second question, enforcement of the clause, the court held that the applicant had not furnished the reason for its

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non­compliance with the time clause, 285 which was required in the circumstances. 286 This prevented the court from making a finding based
on fairness or justice:
'In the result, without facts establishing why the applicant did not comply with the clause, I am unable to say that the enforcement of the clause would be unfair
or unjust to the applicant. For all we know he may have neglected to comply with the clause in circumstances where he could have complied with it. And to allow
him to avoid its consequence in these circumstances would be contrary to the doctrine of pacta sunt servanda. This would indeed be unfair to the respondent.'
287

[151] This is direct authoritative precedent that in cases where constitutional values or rights are alleged to be implicated in the application of
public policy in the invalidation or enforcement of contractual clauses, so­called abstract notions of fairness, reasonableness and simple justice
between persons are the unmediated standards against which the validity of the clauses or their enforcement is judged. It is only in relation to
good faith that the court referred to the then existing state of affairs that it is not a 'self­standing rule'. It did not anoint this with its approval,
but rather noted:
'Whether, under the Constitution, this limited role for good faith is appropriate and whether the maxim lex non cogit ad impossibilia alone is sufficient to give
effect to the value of good faith are, fortunately, not questions that need to be answered on the facts of this case and I refrain from doing so.' 288

[152] The unmediated and direct application of the standards of reasonableness and fairness does not translate into a pejoratively depicted
dependence 'on the idiosyncratic inferences of a few judicial minds'. 289 As with other open­ended standards in our law — reasonableness in
delict and fair labour practices in employment law — individual application may in time develop into generally applicable rules. The cautioning
question — does initial application allow future general application in similar situations? — restricts the danger of subjective idiosyncrasy. If like
cases could not be treated alike in the future, invalidation or non­enforcement should not follow because it would infringe equality of treatment.
[153] Barkhuizen was then considered by the Supreme Court of Appeal in Bredenkamp. 290 That case has been interpreted as giving
Barkhuizen an inhibiting gloss, namely that in Barkhuizen the claimant had claimed that the constitutional right of access to court was infringed;
and it was only to determine that infringement that the Constitutional Court had invoked the fairness standard — crucially this did not,
therefore, operate

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as a 'free­standing ground upon which a court may refuse to enforce a contractual term on the basis of public policy'. 291

[154] That interpretation of Bredenkamp is not correct. There is little to quibble with the statement in Bredenkamp that Barkhuizen is no
authority for the proposition that valid contractual terms or their enforcement may be invalidated on the ground of unfairness even where no
public policy considerations found in the Constitution or elsewhere are implicated. Nor that, in Bredenkamp, no infringement of a constitutional
value, right or any other public policy consideration was relied upon.
[155] That is the ratio of the decision in Bredenkamp. 292 Harms JA did not purport to contradict Barkhuizen's general import that in a case
where constitutional rights and values underlying public policy are invoked and implicated, the contractual clause or its enforcement may be
invalidated as being in conflict with fairness, justice and equity, reasonableness, the necessity to do simple justice between individuals, or
ubuntu. It is in that context that the statement that 'fairness is not a free­standing requirement for the exercise of a contractual right' in
Bredenkamp must be understood. 293 It should not be read as saying that fairness is not a free­standing requirement for the exercise of a
contractual right when the validity of the right is attacked as being in conflict with constitutional values or other public policy considerations.
[156] Unfortunately, Supreme Court of Appeal decisions following Bredenkamp, uncritically adopted the mantra that 'abstract values of fairness
and reasonableness' may not directly be relied upon by the courts in the control of private contracts through the instrument of public policy. In
Pridwin, this was set out as 'now clearly established'. 294 Included as part of these 'clearly established' principles are the following:

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'A court will use the power to invalidate a contract or not enforce it, sparingly, and only in the clearest of cases in which the harm to the public is substantially
incontestable and does not depend on the idiosyncratic inferences of a few judicial minds; [and]
...

(vi) A court will decline to use this power where a party relies directly on abstract values of fairness and reasonableness to escape the consequences of a
contract because they are not substantive rules that may be used for this purpose.' 295

[157] The Supreme Court of Appeal's judgment in this matter unfortunately follows this trend. After quoting the principles enunciated in Pridwin,
Lewis ADP adds a further rider:
'Thus although fairness and reasonableness inform policy they are not self­standing principles. And there are competing policy considerations, in particular, the
need for certainty in commerce.' 296

[158] The precedential and logical shortcomings in this approach do not appear to have been considered. First, the principles set out are not in
accordance with those authoritatively stated in Barkhuizen, nor for that matter, with Bredenkamp itself. Nor is the criterion of harm only to the
public, with no apparent consideration of the harm to the individual contracting party, consistent with Sasfin, 297 or the Appellate Division's
jurisprudence regarding public policy in restraint of trade matters. 298
[159] Second, the insistence on only 'substantive rules' for the determination of public policy in contract law does not bear examination. The
only countervailing requirements to fairness and reasonableness are apparently: (a) the power to invalidate a contract must be used 'sparingly';
(b) only 'in the clearest of cases'; (c) when the harm to the public is 'incontestable'; and (d) when it does not depend on the 'idiosyncratic
inferences of a few judicial minds'. 299
[160] It appears to be suggested that these are now the 'substantive rules' that determine public policy issues in contract in accordance with
the dictates of commercial certainty as an essential part of the rule of law. Yet the alternatives the Supreme Court of Appeal suggests do not
address that court's own concerns about legal certainty. This is because no 'objective standard' is provided to determine when a power is used
'sparingly', or only in 'the clearest of cases', or when the harm to the public is 'incontestable', or when judicial minds make 'idiosyncratic
inferences'. These are themselves not 'rules' of law, but at best also abstract standards. They suffer the same vice of uncertainty as 'notions of
fairness and reasonableness'. And so does the first judgment's use of the mediating 'rule' of public policy. 300

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[161] The result is that the Supreme Court of Appeal's reasons for rejecting direct application of standards of good faith, including fairness and
reasonableness, apply as much, if not more, to its own alternative, which is the sparing use of public policy in only the clearest case of
incontestable violation of the public interest. By that court's own logic, these vague standards must necessarily result in uncertainty and the
'idiosyncratic inferences of . . . judicial minds'. 301
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[162] In Barkhuizen, this court declined to express a final view on the role of good faith in public policy invalidation or non­enforcement cases
302 303
 Froneman J (Madlanga J concurring):
[161] The result is that the Supreme Court of Appeal's reasons for rejecting direct application of standards of good faith, including fairness and
reasonableness, apply as much, if not more, to its own alternative, which is the sparing use of public policy in only the clearest case of
incontestable violation of the public interest. By that court's own logic, these vague standards must necessarily result in uncertainty and the
'idiosyncratic inferences of . . . judicial minds'. 301
[162] In Barkhuizen, this court declined to express a final view on the role of good faith in public policy invalidation or non­enforcement cases
because it did not arise properly on the facts. 302 In Everfresh, 303 the majority of the court declined to grant leave to appeal. The applicant
in that matter had asked the court to develop the law of contract, in accordance with notions of good faith, where the parties have agreed to
negotiate a further agreement, but without an independent deadlock­breaking mechanism. The court nevertheless reiterated the need to infuse
our contract law with constitutional values, including the value of ubuntu, which 'carries in it the idea of humaneness, social justice and fairness
and envelopes the key values of group solidarity, compassion, respect, human dignity, conformity to basic norms and collective unity'. 304
[163] Botha305 came next. The first judgment clearly sets out that Botha was principally concerned with the interpretation of a statutory
scheme aimed at protecting purchasers of land on instalments and applied principles of reciprocity and the exceptio non adimpletis contractus in
doing so. 306 In that context it may also be seen as the application of the principle of good faith in developing existing common­law rules in the
interpretation and application of the statutory scheme. 307
[164] This court formulated the main issue as whether, under s 27(1) of the Alienation of Land Act, 308 the trust was obliged to register the

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property in Ms Botha's name against registration of a mortgage bond in its favour. 309

[165] The court gave a qualified finding in Ms Botha's favour on the main issue. It dealt with two defences to her claim: (a) that the statutory
provision provided only for cancellation as a remedy if demand for transfer is refused, and not specific performance; and (b) that Ms Botha was
not entitled to specific performance since she was in arrears.
[166] The court held in Ms Botha's favour on the availability of specific performance. 310 In relation to her exercise of that remedy, it held that
the statutory provision recognised the reciprocal obligations of the parties and that '(i)t follows inexorably that the provision does not allow the
purchaser to obtain rights in the property unless she first purges her arrears'. 311 How then to get past the fact that she was in arrears?
[167] The first step was to extend the common­law relaxation of the principle of reciprocity, based on good faith, to the situation where Ms
Botha had an accrued statutory right designed for her protection, which the trust's purported cancellation would have destroyed. 312
[168] So good faith allows the court to relax the reciprocity that the exceptio non adimpleti contractus usually demands (the exceptio permits
a party sued for non­performance of a contract to resist judgment by showing that the other party did not perform their side of the bargain).
[169] But how is this done fairly? It could not be done by a simple order compelling the trust to transfer the property to Ms Botha against
registration of a mortgage bond in its favour, because that would not remedy Ms Botha's immediate breach. 313 So this was the court's
equitable solution — an order, relying on both the constitutional competence to make just and equitable orders, 314 and the common­law
discretion to avoid undue hardship in making orders of specific performance: 315
'(T)o deprive Ms Botha of the opportunity to have the property transferred to her under s 27(1) and in the process cure her breach in

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regard of the arrears, would be a disproportionate sanction in relation to the considerable portion of the purchase price she has already paid, and would thus
be unfair. The other side of the coin is, however, that it would be equally disproportionate to allow registration of transfer, without making that registration
conditional upon payment of the arrears and the outstanding amounts levied in municipal rates, taxes and service fees. Accordingly, an appropriate order in this
regard will be made. The condition that Ms Botha must pay the arrears and all municipal balances, set out in our order, on top of the statutory requirement that a
bond be registered, constitutes an equitable exercise of the discretion a court has to avoid hardship to the trustees.' 316 [Emphasis added.]

[170] The further question, whether the cancellation clause in itself was unreasonable, unfair and unconstitutional and if it was, whether Ms
Botha was entitled to restitution of the instalments she had paid, 317 was also decided in her favour on similar grounds relating to reciprocity.
318

[171] More recently, in Dunlop, 319 this court has expressly tied good faith to the furtherance of equality. 320 Dunlop had fired striking
employees, represented by their union, on the basis that, although they had not themselves participated in the violence that had broken out
during a strike action, they had refused to disclose the identities of co­workers who had participated. This, the employees argued, was
unlawful. In argument before this court, Dunlop supported its actions by invoking the court's own decisions, in bilateral contract cases, that it
may import an implied duty of good faith into the parties' dealings in relation to the contract. This, Dunlop said, entailed a duty to disclose
relevant information about the unlawful conduct of their fellow workers. The court unanimously dismissed the appeal and in particular rejected
this argument. The basis was that duties of good faith are intended to infuse 'more equality into hierarchical relationships precisely where the
hierarchy leads to the exertion of unfair power over the subordinated party'. 321 Dunlop's argument was to exactly the opposite effect. In an
employment relationship, it is the employee who is subordinated to the power of the employer. 322 It is that power of the employer that duties
of good faith ought to restrain, to the benefit of the employee. Good faith accordingly affords no basis for strengthening the employer's position
by giving it a right to dismiss its employees for mere silence.

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[172] The court has also commented favourably on legislation that incorporated enforcement of statutory equitable provisions into contracts
dealing with employment, urban leasing and the petroleum industry. In Maphango, 323 the majority left open the question whether the landlord
terminated the lease under the common law, but nevertheless indicated that the statutory tribunal, to whom this task fell to be decided on
equitable principles, would have to consider the parties' respective interests. 324
[173] This was taken further in Business Zone. 325 Mhlantla J, writing for a unanimous court, held that s 12B of the Petroleum Products Act,
326
which introduced an equitable standard that overrides the terms of a petroleum contract, 'prevails in all petroleum contracts regardless of
whether they are subject to statutory arbitration or ordinary court litigation'. 327
[174] She also noted that —
'the establishment of separate adjudicative institutions under the LRA and RHA does not mean that the equitable standard under those Acts does not also apply
to contractual employment and residential lease disputes. It is difficult to imagine any employment dispute under the common law still being determined as if the
fairness standard developed under the LRA is irrelevant.
...
There is no reason why the specifics of the general standard of fairness and good faith in the common law of contract should not be given shape in the context
of petroleum contracts, as is done in the context of labour or rental housing contracts.' 328

[175] In summary: this court has authoritatively stated that the application of public policy in determining the unconscionableness of
contractual terms and their enforcement must, where constitutional values or rights are implicated, be done in accordance with fairness, justice
and equity, and reasonableness, which cannot be separated from public policy. 329 Public policy takes into consideration the necessity to do
simple justice between individuals and is informed by the concept of ubuntu. 330 What public policy is and whether a term in a contract is
contrary to public policy must now be determined by reference to these values. This approach leaves space for pacta sunt servanda t o
operate, but

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at the same time allows courts to decline to enforce contractual terms that are in conflict with constitutional values even where the parties
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consented to them.
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at the same time allows courts to decline to enforce contractual terms that are in conflict with constitutional values even where the parties
consented to them.
[176] Although declining to express a final view on whether good faith can operate as a self­standing rule, this court has accepted that the
common­law notion of good faith underlies our contract law and that it embodies concepts of justice, reasonableness and fairness. It has used
that notion of contractual good faith to further relax the common­law principle of reciprocity underlying the exceptio non adimpleti contractus.
It has done so in statutorily protected land rights and in infusing equality into the content of employment obligations. It has had little difficulty
in accepting the courts' role in enforcing open ended statutory equitable provisions overriding express contractual terms. And it has
acknowledged that the common law could in that process benefit from statutory development.
[177] These developments are in accord with the general decline and transformation of the rigid classical notion of freedom of contract into a
more socially situated or communally understood conception of personal autonomy. Freedom of contract is not the only principle of our law of
contract. Nor is good faith. They complement each other. This means that the individualism of our law of contract is one that takes account of
the reasonable expectation of the parties to the contract as well as that of the wider community.
[178] The real complaint against notions of reasonableness and fairness is that they do not on their face articulate objective standards against
which the conduct of contracting parties may readily be measured. That is a legitimate concern. To address it, this court must seek ways to
formulate cognisable standards rooted in reasonableness, fairness and good faith that may be applied in particular cases. The German courts
have succeeded in doing this. There is no reason why our courts cannot, too. It is in this quest that there may be room for a synthesis
between this court's approach and that espoused in the Supreme Court of Appeal.
A synthesis?
[179] A former member of this court, Edwin Cameron, has commented recently on this divergence of approach:
'What is needed is an integration of the two perspectives, to which the debate thus far has not been helpful. It has tended to proceed in unhelpful generalities.
"Commercial certainty or constitutionalism?" Good faith: Are you for or against? . . .
Some important voices have urged a more fine­grained approach. Gerhard Lubbe, writing shortly after Afrox in 2004, said South Africa could learn much from
the German approach, whose Fallgruppen methodology has served to translate the good faith clause into a set of perceptible legal rules. More careful work of
this nature is now beginning to be done by legal academics. It offers the possibility of a détente: a bold conception of good faith need not be the ''monster'' the
Supreme Court of Appeal once perceived, but it must be domesticated through processes more careful and lawyerly than those the

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Constitutional Court has applied. But that has not yet been realised in practice. In the Constitutional Court's approach, the Supreme Court of Appeal perceives
no legal rules or doctrines, only a loose discretion whose exercise threatens to be adventitious. The disconnect is neither doctrinally nor functionally satisfactory,
and academics have rightly expressed dissatisfaction with the polarisation, which has become more severe.' 331

[180] Privileging freedom of contract and certainty in an absolutist manner is no fit redress for the valid complaint that this court's approach
lacks discernible objective criteria to give content to good faith and its close relatives, fairness and reasonableness. Rigidity negates any
possibility for these notions to play a role in contract law, even indirectly. So the quest must be for reasonably practical, objective and clear
requirements informed by these concepts. That is not an impossible task.
[181] It may help to seek some assistance, not wholesale transplant, from other jurisdictions. This court has often looked at German law in this
regard and yet again it is a fruitful exercise in the present context. 332
[182] German law, like ours, makes a distinction between invalidation on public policy grounds and the general operation of good faith. The
former is governed by arts 134 and 138 of the German Civil Code (Bürgerliches Gesetzbuch or BGB), the latter primarily by art 242.
[183] Article 134 provides that a legal transaction that violates a statutory prohibition is void, unless the statute leads to a different
conclusion. Article 138(1) provides that a legal transaction that is contrary to public policy is void. Article 138(2) adds:
'In particular, a legal transaction is void by which a person, by exploiting the predicament, inexperience, lack of sound judgment or considerable weakness of
will of another, causes himself or a third party, in exchange for an act of performance, to be promised or granted pecuniary advantages which are clearly
disproportionate to the performance.'

[184] Article 134 needs no special discussion. Our law already recognises that in appropriate circumstances an agreement contrary to a statute
may be declared void. 333

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[185] Article 138(1) suffers from the same abstractness and lack of certainty that our law for declaring contracts contrary to public policy
appears to be suffering from. It is here, however, that the articulation of individual fundamental rights in the Constitution can be of great help.
The infringement of a fundamental individual right in the context of a contract may then be used as a concrete example of being in conflict with
public policy. This has already been recognised in Barkhuizen.
[186] It is where an infringement of a fundamental right does not appear clearly in the first stage of the Barkhuizen analysis, that some aspects
of art 138(2) of the BGB provide some further insight into how more objective, specific and ascertainable rules may be of assistance in the
second stage of determining the validity in the enforcement of a contractual clause. It is interesting to note the similarities between the article
and the reconsideration, advocated by Gordley, that some equivalence in the value of the respective performance by the parties in bilateral
contracts may still be the underlying purpose of most, if not all, contracts. 334
[187] Barkhuizen, I suggest, may be read as having already started the process of determining more objectively certain rules in the second
stage of its analysis, by requiring that parties who seek to avoid the consequences of their own breach of contract on the basis of public policy
need to adequately explain the reason for their non­compliance. This requirement may fit in with the first of the three requirements that underlie
art 138(2) of the BGB and the suggestion by Gordley, that more is required. What a party then needs to prove would be that: (a) the exchange
is clearly disproportionate (which would include providing a reason for non­compliance); (b) the disadvantaged party is badly prejudiced; and (c)
that the disadvantaged party is less able to protect itself than the other contracting party. The greater and more certain the harm and the less
the ability to protect against it, the more willing the court should then be to give a remedy.
[188] Proof of disproportionate exchange will only be possible where there is evidence available of what a proportionate or normal exchange will
be in commercial practice. That might be a difficult evidentiary burden but the lack of proof will then serve as the first filter for ensuring that
invalidation is done 'sparingly' and in only the 'clearest' of cases. 335 The next filter will be proof of the prejudice that the complaining party will
have to endure because of the disproportionality. This again goes to a cautionary approach to exclude undeserving cases. And lastly, that party
will have to show that it was less able to protect the contracting

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party than the other contracting party, which would incorporate current notions of inequality in bargaining power.
[189] What about good faith? In determining unreasonableness and fairness under the public policy test for invalidity there is, of course, an
overlap with good faith, which includes notions of reasonableness and unfairness. But as we have seen this court has not confined good faith to
public policy invalidation and has recognised its application in other fields as well.
[190] Earlier, I indicated that Botha may be an instance where good faith considerations justified the development of the common­law rule that
the rigorous application of reciprocity in bilateral contracts, in the form of the use of the exceptio non adimpleti contractus, may be relaxed
where fairness and justice dictates it. That rule was developed and applied by the Appellate Division in BK Tooling, 336 by allowing for a
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relaxation of the principle of reciprocity and the award of a reduced contract price in circumstances where equity demands it.
 overlap with good faith, which includes notions of reasonableness and unfairness. But as we have seen this court has not confined good faith to
public policy invalidation and has recognised its application in other fields as well.
[190] Earlier, I indicated that Botha may be an instance where good faith considerations justified the development of the common­law rule that
the rigorous application of reciprocity in bilateral contracts, in the form of the use of the exceptio non adimpleti contractus, may be relaxed
where fairness and justice dictates it. That rule was developed and applied by the Appellate Division in BK Tooling, 336 by allowing for a
relaxation of the principle of reciprocity and the award of a reduced contract price in circumstances where equity demands it.
[191] The difference in the application of good faith in the context of developing the common law, in contrast to public policy application, lies in
its purpose. Its purpose is that of development and modification of a legal rule, while public policy aims at something different, namely the
invalidation of a contractual term or its enforcement. The effect of the order in Botha was not to invalidate the cancellation clause in the
contract, but to postpone it in order for Ms Botha to have a further opportunity to cure her default and other arrears. 337
[192] That still leaves the problem of giving objectively ascertainable content in a particular case to the dictates of good faith. As explained by
Jacques du Plessis, when applying art 242 of the BGB —
'"good faith" does not simply mean fairness or reasonableness. It bears a more specific meaning, which sometimes is explained by a closer examination of the
German term, Treu und Glauben, of which "good faith" is a rather vague translation. The term essentially requires that a party takes into account the protectable
interests of another party (that is, display Treu) and the other party in turn must rely on this (that is, must display Glauben). The protection of this reliance lies at
the heart of the whole construct of good faith. When used in this sense, the concept is defined "objectively" as a standard of behaviour, as opposed to the
"subjective" sense of having the state of mind of being "in good faith", typically through not knowing something. German law then uses a different term, gutter
Glaube, to describe "subjective" good faith.' 338
[193] This is not too far off from the statement in the much­maligned Botha that:

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'Bilateral contracts are almost invariably cooperative ventures where two parties have reached a deal involving performances by each other to benefit both.
Honouring that contract cannot therefore be a matter of each side pursuing his or her own self­interest without regard to the other party's interests. Good faith is
the lens through which we come to understand contracts in that way.' 339

[194] Testing the respective trust and reliance of the parties, in and towards each other, is by disproportionality working both ways, as
illustrated by the quotation from Botha earlier. 340 Teasing out a 'substantive rule' from Botha that can be applied in future cases, might then
amount to either of the following. The narrower formulation would be that: (a) the facts of the matter must disclose a relationship of reciprocal
trust and reliance, inherent in the application of good faith, between the parties; in (b) a situation where the defence of the exceptio non
adimpleti contractus is raised in litigation; and (c) it is possible to provide relief in the form of a proportionate adjustment to the respective
exchanges agreed to by the parties in the contract. The wider formulation would extend the second requirement to the relaxation of the
strictness of the contractual principle of reciprocity in general, and not only to situations where the exceptio is raised as a defence.
[195] It will be seen from this that there may be an overlap between the application of the rules in the second stage of the analysis under
public policy unconscionableness, and those of good faith application in the operation of contracts. That overlap lies in the proportionality
requirement for both. But the purpose of the inquiry into proportionality is different. The purpose of good faith in the operation of contracts is to
ascertain whether a proportionate adjustment to the agreed exchanges is possible. If not, that particularised rule deriving from good faith will
not avail a claimant, because the aim of developing the common law to cater for some adjustment to the agreed reciprocal obligations cannot
be achieved. But the purpose of public policy invalidation is plainly invalidation, not adjustment of exchange. It is a more drastic remedy
because invalidating the enforcement of an obligation is permanent, and not a mere temporary adjustment to an obligation that can remain, or
be revived, for further enforcement. It is for this reason that, although disproportionality is a necessary requirement for public policy
invalidation, it is not sufficient. More is required, in the form of individual collateral prejudice and lastly, a less powerful ability to protect himself
than his adversary.
Application
[196] The first judgment disposes of the matter by endorsing the finding that the applicants did not explain why they did not comply with the

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notice clause. 341 I disagree. The applicants explained that they were unsophisticated and not versed in the niceties of the law. This
explanation was not contradicted by any direct evidence. Besides, there is enough circumstantial evidence to back up their contention.
[197] It is common cause that they were not businessmen in their own right: they are former Sale's Hire employees. They acquired their
businesses in terms of a black economic empowerment initiative that sought to facilitate 'business ventures pioneered and run by historically
disadvantaged persons'. 342 This was in the form of a franchise agreement for 10 years that was dependent on a renewal of the five­year
lease agreement. It is closing one's eyes to reality to deny the obviously unequal relationship between a franchisor and franchisees, and this
one was no different. Mr Sale had the power of life and death over their franchises.
[198] Their lack of sophistication is, ironically, illustrated by the content of the renewal notices. None were written by lawyers. The first was 'a
formal request to propose a renewal on our already existing lease agreement with the option to purchase', expressing the hope that the
proposal would receive favourable consideration and indicating that the franchisee should be contacted if further discussion was necessary. The
second was also for consideration of an offer to purchase and, in the interim, for 'the draft of the renewal of [the] premises lease'. The third
was from an accountant, in informal terms:
'My name is Gerald and I am Gavin's accountant the reason for emailing you is that we check thru the lease agreement and saw that the termination date is 31
July 2016.
How soon can you draw up a new lease agreement for Gavin and can you also send me a draft copy for discussion purposes.
Your assistance in this matter will be highly appreciated.'

[199] What followed was a reply, dated 15 March 2016, from an employee of the first respondent, indicating that Mr Sale was out of town and
that she would only be able to revert 'once your offer has been discussed with him'. This express acquiescence in the consideration of the offer
was then followed by four months of further acquiescence by silence, until the first and third applicants were told to vacate the premises by 31
July 2016 by an attorneys' letter. The second and fourth applicants were advised on 29 July 2016 that the first respondent was amenable to
concluding new agreements with them and was willing to let the premises to them on a monthly basis until new agreements could be concluded.
They were warned that if they did not respond by 31 July 2016, they would be required to vacate the premises on that day.

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[200] What probable inferences can be drawn from these undisputed facts? The answer seems clear to me. The applicants were novices in how
to play a hard business game. They sent notices of renewal and offers to purchase that clearly show their ignorance of the 'niceties of law';
they are lulled into a sense of security, first expressly and then by silence, that their offers and expectation of renewal of the leases will be
considered; and then, four months later, just as 31 July approaches, they are hit by attorney' letters that give effect to their franchisor's power
of death over the future of their franchises.
[201] This is not a Bredenkamp kind of case. The applicants approached the court on the basis that fundamental constitutional values of
dignity and equality are implicated in determining whether enforcement of the notice clause is against public policy. Barkhuizen requires that in a
case of that kind the application of public policy in determining the unconscionableness of contractual terms and their enforcement must be
done in accordance with notions of fairness, justice and equity, and reasonableness cannot be separated from public policy. Public policy takes
into consideration the necessity to do simple justice between individuals and is informed by the concept of ubuntu.
[202] On that approach, the applicants' assertion of relative lack of sophistication is clearly apparent when contrasted with the conduct of the
third respondent. Their explanation of why they did not comply with the strict notice requirement rings true. The disproportionate unfairness
between their conduct and that of the first respondent is equally clear. Their prejudice in losing their businesses is obvious against that of the
first respondent, who loses nothing. And the inequality in bargaining power between the applicants as franchisees and their franchisor is there
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for all to see.
 into consideration the necessity to do simple justice between individuals and is informed by the concept of ubuntu.
[202] On that approach, the applicants' assertion of relative lack of sophistication is clearly apparent when contrasted with the conduct of the
third respondent. Their explanation of why they did not comply with the strict notice requirement rings true. The disproportionate unfairness
between their conduct and that of the first respondent is equally clear. Their prejudice in losing their businesses is obvious against that of the
first respondent, who loses nothing. And the inequality in bargaining power between the applicants as franchisees and their franchisor is there
for all to see.
[203] For these reasons, I would uphold the appeal with costs, including the costs of two counsel, and reinstate the order of the High Court.
Judgment
Victor AJ:
[204] I have had the pleasure of reading the judgment of my sister, Theron J (first judgment). Her judgment finally brings harmony in the
contest between contractual autonomy and constitutional fairness in the law of contract. I have also had the privilege of considering the
dissent of my brother, Froneman J. I agree with the reasoning and conclusion in his dissent and, with some pause, set out additional reasons for
doing so.
[205] Moseneke DCJ in Everfresh, when infusing the law of contract with ubuntu refers to it as a constitutional value:
'Indeed, it is highly desirable and in fact necessary to infuse the law of contract with constitutional values, including values of ubuntu, which inspire much of our
constitutional compact. On a number of occasions

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in the past this court has had regard to the meaning and content of the concept of ubuntu.' 343

[206] In advancing the role of ubuntu in the law of contract, I do not deal with customary law contracts, but bring to the fore the
constitutional value of ubuntu as one of the values in determining commercial contracts. In my view, ubuntu is an important value that stands
alongside values such as good faith, fairness, justice, equity, and reasonableness. Whilst these latter constitutional values go a long way in
addressing fairness in the law of contract, the constitutional value of ubuntu adds a value of substance. Ubuntu together with the other values,
form a transformative basis in the adjudicative process when deciding whether to set aside an unfair contractual term or its unfair enforcement.
Characterising ubuntu as a substantive constitutional value in the law of contract leads to a more context­sensitive basis in its adjudication and
facilitates a constitutionally transformative result. 344
[207] As the analyses conclude in the first and second judgments, the law of contract has moved away from formalism towards substantive
fairness. 345 I emphasise the value of ubuntu in adjudicating contractual fairness as it has a greater and context­sensitive reach, especially
where there is inequality in the bargaining power between the parties. In my view, there is a danger in conflating or characterising fairness and
ubuntu as being a single concept. 346 The full scope and ambit of ubuntu is considerably wider than fairness. As stated in Everfresh —
'[ubuntu] emphasises the communal nature of society and "carries in it the ideas of humaneness, social justice and fairness" and envelopes "the key values of
group solidarity, compassion, respect, human dignity, conformity to basic norms and collective unity"'. 347
[208] In true fidelity to our transformative constitutional project, ubuntu is an appropriate adjudicative value in reaching substantive fairness

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between contracting parties. Ubuntu provides a particularistic context in the law of contract when, for example, addressing the economic
positions or bargaining powers of the contracting parties.
[209] Here, at the outset, the very purpose of the two contracting parties took place within the context of a black economic empowerment
initiative and thereby, the purpose was to redress economic disempowerment of historically disadvantaged persons. This context requires a
nuanced approach in balancing contractual autonomy and transformative constitutionalism. Mahomed DP in Du Plessis noted that —
'(t)he common law is not to be trapped within the limitations of the past . . . . It needs to be revisited and revitalised with the spirit of constitutional values . . .
and with full regard to the purport and objects of [the Bill of Rights].' 348

[210] In Makwanyane, 349 Madala J referred to ubuntu permeating the Constitution generally and more particularly the Bill of Rights, which
embodies the entrenched fundamental human rights. 350 He stated that the concept of ubuntu 'carries in it the ideas of humaneness, social
justice and fairness'. 351 Ubuntu is not a constitutional value that must hover on the marginal boundaries of our jurisprudence, with its place
debated. In my view, it is an important part of our constitutional jurisprudence which is already embedded as a substantive value in the core
values of our Constitution. Ubuntu together with the other underlying values such as fairness and justice, is one of the central values of our
jurisprudence generally when adjudicating fairness in contract.
[211] Western 'pace­setters' conceptualised and defined philosophy in the image of the dominant European and American thought systems
which they used as 'benchmarks for measuring the propriety of all philosophical thought'. 352 They, by and large, overlooked the very rich
African philosophy and jurisprudence, and its overarching feature — ubuntu. 353 As a result of this history, its operation under the
constitutional dispensation must be given prominence to be fully recognised and integrated. 354

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[212] The time has come to vindicate African jurisprudence. 355 Its central concept of ubuntu must be reconceived into the transformative
space which the Constitution provides. 356 It is appropriate that the important value of ubuntu be acknowledged on an equal footing for its
operation under the Constitution. 357
[213] Whilst ubuntu is difficult to define, it is a value that was clearly included even by implication in many of the rights in the Bill of Rights such
as the right to dignity and equality which go to the core of ubuntu. 358 When the final Constitution was adopted there was a recognition that
the principle of ubuntu was to be harmonised into all jurisprudential thought going forward and in constitutional reasoning. 359 The philosophical
foundations of ubuntu are not new but originate from time immemorial and should be acknowledged as forming a part of our entire jurisprudential
heritage including our commercial heritage. The recognition and infusion of ubuntu into the law of contract is long overdue.
[214] In expanding the underlying value of ubuntu, its characterisation in the analysis underpinning the debate on certainty, contractual
autonomy and constitutionalism is necessary. I agree with the second judgment that adjudicating fairness in contract cannot be done within a
set of neutral legal principles. 360 It will ultimately be based on an 'underlying moral or value choice'. 361 The second judgment pays attention
to the individuals who conclude the contract and the wider community. 362 It finds that contractual autonomy and constitutional fairness can
be done 'in a manner that ensures objective, reasonable practicality and certainty'. 363 A synthesis of these values has led to the crafting of
a unique system of the law of contract to suit the legal climate and transform the common law of contract. 364
[215] It is within this context that more needs to be said about the value of ubuntu and its recognition in this adjudicative process. Davis J, in
the

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High Court dealt with the importance of the value of ubuntu. 365 His judgment deals with the merits of weighing up the role of ubuntu against
certainty in contract.
[216] Whilst contractual autonomy and freedom of contract requires certainty, the concept of absolute certainty in contract is illusory and this
is evident from the historical overview of the undulating journey of fairness in our jurisprudence. The High Court refers to certainty not only in
contract but in law generally as being a shibboleth. 366 I would agree. Absolute preordained certainty in the outcome of legal disputes can
hardly be attained. The quest for certainty is nebulous and to paraphrase the High Court's shibboleth characterisation, it is really 'a catch all' or
'tagline'.
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transformative constitutionalism which includes the value of ubuntu, and the other values referred to in both judgments. The additional scrutiny
 certainty in contract.
[216] Whilst contractual autonomy and freedom of contract requires certainty, the concept of absolute certainty in contract is illusory and this
is evident from the historical overview of the undulating journey of fairness in our jurisprudence. The High Court refers to certainty not only in
contract but in law generally as being a shibboleth. 366 I would agree. Absolute preordained certainty in the outcome of legal disputes can
hardly be attained. The quest for certainty is nebulous and to paraphrase the High Court's shibboleth characterisation, it is really 'a catch all' or
'tagline'. 367 There is no reason for a commercial contract to become diverted from its intended goal when considered through the prism of
transformative constitutionalism which includes the value of ubuntu, and the other values referred to in both judgments. The additional scrutiny
through the prism of ubuntu, is but a more focused legal methodology to achieve justice as between two parties. It does not exclude or
undermine certainty in contract. It remains a central consideration in harmony with the other values.
[217] The first and second judgments provide a detailed historical overview and acknowledge that Roman, Roman­Dutch and other European
systems of law, all embrace some concept of fairness in contract. 368 Even after the exceptio doli generalis was relegated to 'RIP' 369 our
jurisprudence continued to ameliorate the harsh effects of contract. Of course, even more so when the benchmark was set by constitutional
values of 'good faith, reasonableness and fairness' which have come to the fore in the enforcement of contracts in South African law. Academic
writers caution against the 'disconnect between South Africa's modernistic Constitution and its vintage canons of legal analysis steeped in

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370
common law and Roman–Dutch tradition, adulterated by the decades of apartheid'.
[218] The emphasis in this dissent illustrates that when adjudicating the law of contract, the underlying values must be consonant with the
transformative constitutional values which include the value of ubuntu, whilst simultaneously attaining appropriate levels of certainty.
[219] In ameliorating harshness in contract, Parliament has gone even further on the issue of fairness in contracts. It has enacted various
statutes to achieve this goal. This has led to a remodelling of the law of contract to be more just and equitable. 371 It enacted the Consumer
Protection Act (CPA) 372 which provides for the non­enforcement of contracts that are unfair, unjust or unreasonable. There is also the
National Credit Act (NCA). 373 These statutory enactments belie the concept of absolute certainty in the law of contract as can be seen when
Parliament intervened to ensure equality in bargaining power. The CPA obliges a court to consider a number of factors such as the fair value of
the goods, the nature of the parties to the transaction, their relative capacity, education, and many other factors that lie at the heart of
unequal bargaining power. 374 Consequently, our jurisprudence recognises that certainty, in the law of contract, must be balanced against a
number of important factors. Even s 7 of the CPA provides that the Minister may determine the contents of provisions in franchise agreements.
375 Davis, in an extra­curial article, refers to the work of an academic who postulates that the 'law of contract cannot simply be viewed as an

arena of private autonomy which is devoid of profound public implications'. 376 There are also other areas where, notwithstanding that there
may be contracts in place, Parliament has legislated to protect vulnerable groups, such as workers, tenants, consumers and

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those evicted from urban dwellings, and people who live in rural areas, on farms and on undeveloped land. 377

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[220] It is the appropriate time in our evolving jurisprudence that, when adjudicating the law of contract, we not only recognise good faith,
reasonableness and fairness but also recognise that the constitutional value of ubuntu should stand alongside these values as one of the
integral considerations of public policy. 378 The recognition of ubuntu, in interpreting contracts will not undermine the traditionally highly prized
jurisprudential concept of certainty and contractual autonomy. 379 When adjudicating the law of contract, certainty and the principle of
pactam sunt servanda will continue to be consonant with what the second judgment refers to as a consideration in the 'underlying moral or
value choice'. Based on this tonal palette, the recognition of the value of ubuntu in the interpretive process will not detract from the principles
of certainty in contract, instead it will contribute to the achievement of the transformative goals required by the Constitution. Certainty is not
erased when adjudicating contracts 'in a manner that ensures objective, reasonable practicality and certainty'. This approach is objectively
verifiable and does not spiral into a subjective vortex of uncertainty where it collides with commercialism.
Ubuntu and the Broad Based Black Economic Empowerment Act
[221] The balancing of constitutionalism and contractual autonomy are best viewed through the prism of a transformative constitutional
framework. It informs the adjudication of this case which is essentially a dispute that originates from a franchise and lease agreement set within
a black economic empowerment context. The Broad Based Black Economic Empowerment Act (BBBEE Act) 380 is a statute which attempts to
level the playing fields skewed by the apartheid system. The value of ubuntu certainly resonates in interpreting the context of BBBEE.
[222] The second judgment refers to the work of Cameron who advances the idea that the two perspectives of commercial certainty and
constitutionalism can be synthesised and integrated to bring about some unity in the divergent debate. This raises very directly, an issue we
must face head on. In this case, should commercial certainty trump constitutionalism? Can the doctrine of pacta sunt servanda be 'synthesised'
with the normative framework of the Constitution without dissonance? The facts in this case support unity of purpose more so because the
facts are to be

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found squarely within the context of the BBBEE Act. The BBBEE Act seeks to address the legacy of apartheid and promote the economic
participation of previously disadvantaged people in the South African economy. The preamble to the BBBEE Act expressly recognises the right of
all South Africans to participate in the economy. 381
[223] The franchise and lease agreements were concluded within the context of the overarching principle of commercial empowerment of
previously disadvantaged persons. This BBBEE context and its principles are a stark reality in this matter. The franchise agreement depended on
the leased premises from which the applicants are sought to be evicted. The High Court referred to this contract as a —
'vitally important initiative designed to encourage ownership of business by historically disadvantaged people [which] will be dealt a fatal blow insofar as these
applicants are concerned. The sanction of eviction was described as being in the form of capital punishment: that is, they lose their businesses if their application
fails.' 382

[224] The second judgment refers to the values in art 138(1) of the German Civil Code which recognises and bluntly acknowledges the
predicament and inexperience of one of the contracting parties. 383 I find that the facts in this case are indicative of that inexperience on the
part of the applicants. The second judgment explains the import of art 138(2) of the German Civil Code and how specific ascertainable rules may
be of assistance in the second phase of implementing the contract. 384
[225] The contracting parties in this case are not equal in levels of experience. The post­constitutional era requires that all law, including
private law, be interrogated and scrutinised using transformative legal tools to ensure equality and human dignity. Mr Sales of Sale's Hire had
concluded a cooperation agreement with the National Empowerment Fund (NEF). This Fund provided loans to black­owned entities. This enabled
the applicants to borrow money so that they could own and operate Sale's Hire franchise businesses. In concluding this contract with the NEF,
Mr Sales as the sole member of Sales Hire CC, enjoyed a substantial financial benefit. In return Sale's Hire had an obligation to provide ongoing
training, business support and mentorship to the applicants. Sale's Hire's contractual obligations to the Fund in this

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regard, were clear. Mr Sales as the sole member, was the face of Sale's Hire and among his responsibilities, was the responsibility to negotiate
the best rental deal possible for the businesses. The renewal of the rental agreements would also fall within his obligations of ongoing training,
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business support and mentorship. He was also a trustee of the Oregon Trust, the landlord in this case.
 2020 (5) SA p323
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regard, were clear. Mr Sales as the sole member, was the face of Sale's Hire and among his responsibilities, was the responsibility to negotiate
the best rental deal possible for the businesses. The renewal of the rental agreements would also fall within his obligations of ongoing training,
business support and mentorship. He was also a trustee of the Oregon Trust, the landlord in this case.
[226] He took no steps to advise the applicants to renew the lease agreement timeously. Instead, in conflict with his obligations, he was
instrumental in launching the eviction of the applicants on behalf of the Oregon Trust. The facts in this case show that the applicants did not
have the kind of business experience in renewing contracts for leased premises. As part of Sales Hire's obligations, it was incumbent on Mr Sales
to attend to training, business support and mentorship and this would have included assisting the applicants in timeously renewing the leases. It
is not a situation where they were negligent or forgot to give notice to renew. They were not versed in the sphere of the law of contract. As
described in the first judgment 385 the applicants, including the fourth applicant's auditor, belatedly attended to the renewal without success.
These facts are relevant to the determination of this appeal. In light of Mr Sales' conflict of interest and his participation in evicting the
applicants, he cannot be said to have been acting in a bona fide manner towards the applicants. Whilst the agreement may be fair on its face,
it is the implementation phase of the two­phase approach as posited in Barkhuizen which would render the eviction of the applicants unfair and
contrary to the spirit of ubuntu and the other values referred to. 386 The eviction of the applicants in these circumstances would fail to take
into consideration the interests of both parties and the original purpose of the contract, being the empowerment of historically disadvantaged
persons in commerce.
[227] The applicants were contractually bound to rent the respondent's premises. It was a term in the agreement. The High Court judgment
explained the effect of implementing the eviction of the applicants from the premises. It held that —
'(i)t would be a devastating blow to these objectives if these businesses were to collapse and be taken away from the applicants when they had diligently paid
off their loans to the NEF and were finally in a position to enjoy the "full economic benefit of their businesses unencumbered by these loan obligations"'. 387

[228] The raison d'être (the core reason) for this franchise deal is context­driven. Its primary purpose is to ensure that persons who were
historically disadvantaged are empowered to participate in the economy at a meaningful and equal level. The facts in this case aptly
demonstrate that there is a strong jurisprudential foundation for the parties to enjoy

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contractual freedom, achieve certainty and at the same time achieve what is fair and just. The normative framework of the BBBEE Act and its
requirements must be interpreted to incline towards transformative constitutionalism. This will extend the legal­methodological approach in the
law of contract. A paradigm shift is needed to move the current legal culture to craft new precepts and decisional techniques consonant with
the Constitution. 388 The application of the principle of ubuntu in an appropriate contractual context leads to fair treatment and fair dealing for
all parties.
Conclusion
[229] This approach is important for the task of adjudicating our law of contract based on a framework of transformative constitutionalism, and,
as set out in the second judgment, the recognition of an 'underlying moral or value choice'. The traditional individualistic approach to the law of
contract is one that 'promotes self­interest and self­reliance'. This results in the iconic rules of certainty and contractual autonomy to the
exclusion of the underlying moral or value choice, which fails to address constitutional transformation. 389
[230] It is the second phase in Barkhuizen that needs to be critically analysed in this case. 390 The implementation of the eviction order for the
failure to notify the renewal of the lease agreement timeously must be weighed up against the context already described. Its implementation
must be weighed up against the principles of fairness and ubuntu which provides for a more expansive analysis which would include the
inequality in bargaining power. 391 The wording of the renewal clause, on the face of it, is fair, but the moment the enquiry continues into the
second phase, as to whether its implementation is fair, the application of the value of ubuntu will play a more significant role in that assessment.
An enforcement of the cancellation of the lease would not be in accordance with the transformative approach referred to in this judgment. It is
also not consonant with the underlying value of ubuntu.
[231] This approach leaves space for courts to scrutinise contractual autonomy whilst at the same time allowing courts to refuse enforcement
of contractual terms that conflict with constitutional values, even though the parties may have consented to them. Public policy must take all
these considerations into account and not implement contractual autonomy at the expense of transformative constitutionalism. The appropriate
balance can readily be achieved upon a recognition of an 'underlying moral

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or value choice' in which the constitutional values of ubuntu feature in this constitutionally transformative space.
[232] For these reasons I agree with the second judgment.
Applicants' Attorneys: ME Mohamed Attorneys.
First and Second Respondents' Attorneys: De Klerk & Van Gend Inc.
* By the majority; two dissenting judgments are at [105] et seq.
1 Hutchison 'From Bona Fides to Ubuntu: The Quest for Fairness in the South African Law of Contract' (2019) Acta Juridica 99 at 99 – 100. See also Beadica 231 CC
and Others v Trustees, Oregon Unit Trust and Others 2018 (1) SA 549 (WCC) (High Court judgment) para 1.
2 The Fund was established under the National Empowerment Fund Act 105 of 1998 for 'the promotion and facilitation of ownership of income generating assets by
historically disadvantaged persons'. One of the objects of the Fund, in terms of s 3(c) of the Act, is the facilitation of black economic participation by 'promoting and
supporting business ventures pioneered and run by historically disadvantaged persons'.
3 High Court judgment above n1 paras 42 – 45.
4 Botha and Another v Rich NO and Others 2014 (4) SA 124 (CC) (2014 (7) BCLR 741; [2014] ZACC 11).
5 High Court judgment above n1 paras 34 – 35.
6 Id para 35.
7 Id para 39.
8 Id para 42.
9 Trustees, Oregon Trust and Another v Beadica 231 CC and Others 2019 (4) SA 517 (SCA) ([2019] ZASCA 29) (Supreme Court of Appeal judgment) para 25.
10 Id para 34.
11 Id paras 37 – 38.
12 Id para 34.
13 Id para 38.
14 Id paras 46 – 47.
15 Section 9(2) of the Constitution provides:
'Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect
or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.'
16 Supreme Court of Appeal judgment above n9 para 34, endorsing AB and Another v Pridwin Preparatory School and Others 2019 (1) SA 327 (SCA) ([2018]
ZASCA 150) (Pridwin) para 27. See also Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) ([1988] ZASCA 94) (Sasfin) at 9A – C.
17 Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5).
18 Section 167(3)(b) of the Constitution provides that:
'The Constitutional Court—
...
(b) may decide —
(i) constitutional matters; and
(ii) any other matter, if the Constitutional Court grants leave to appeal on the grounds that the matter raises an arguable point of law of general public importance
which ought to be considered by that Court; . . . .'
19 See General Council of the Bar of South Africa and Another v Jiba and Another 2019 (8) BCLR 919 (CC) ([2019] ZACC 23; 2019 JDR 1194) para 35.
20 Barkhuizen above n17 para 28.
21 See a similar enquiry into the normative content and social impact behind the principles of vicarious liability in K v Minister of Safety and Security 2005 (6) SA
419 (CC) (2005 (9) BCLR 835; [2005] 8 BLLR 749; [2005] ZACC 8) para 22.
22 See, by way of a sample, Hutchison above n1; Du Plessis 'Human Dignity in the Common Law of Contract: Making Sense of the Barkhuizen, Bredenkamp and
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Botha and Company
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(2019) 9 Constitutional Downloaded
Court Review 409; Du Plessis 'Giving Practical Effect : Tue
to Good Faith Feb
in the 18of2025
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(2018) (South Law
3 Stellenbosch Africa Standard
Review 379;Time)
Price & Hutchison 'Judicial Review of Exercises of Contractual Power: South Africa's Divergence from the Common Law Tradition' (2015) 79 Rabels Zeitschrift 822;
Sharrock 'Unfair Enforcement of a Contract: A Step in the Right Direction?' (2015) 1 Mercantile Law Journal 174; Bhana & Meerkotter 'The Impact of the Constitution on
 which ought to be considered by that Court; . . . .'
19 See General Council of the Bar of South Africa and Another v Jiba and Another 2019 (8) BCLR 919 (CC) ([2019] ZACC 23; 2019 JDR 1194) para 35.
20 Barkhuizen above n17 para 28.
21 See a similar enquiry into the normative content and social impact behind the principles of vicarious liability in K v Minister of Safety and Security 2005 (6) SA
419 (CC) (2005 (9) BCLR 835; [2005] 8 BLLR 749; [2005] ZACC 8) para 22.
22 See, by way of a sample, Hutchison above n1; Du Plessis 'Human Dignity in the Common Law of Contract: Making Sense of the Barkhuizen, Bredenkamp and
Botha Trilogy' (2019) 9 Constitutional Court Review 409; Du Plessis 'Giving Practical Effect to Good Faith in the Law of Contract' (2018) 3 Stellenbosch Law Review 379;
Price & Hutchison 'Judicial Review of Exercises of Contractual Power: South Africa's Divergence from the Common Law Tradition' (2015) 79 Rabels Zeitschrift 822;
Sharrock 'Unfair Enforcement of a Contract: A Step in the Right Direction?' (2015) 1 Mercantile Law Journal 174; Bhana & Meerkotter 'The Impact of the Constitution on
the Common Law of Contract: Botha v Rich NO' (2015) 132 SALJ 494; and Cockrell 'Substance and Form in the South African Law of Contract' (1992) 109 SALJ 40.
23 See Wallis 'Commercial Certainty and Constitutionalism: Are They Compatible?' (2016) 133 SALJ 545; Brand 'The Role of Good Faith, Equity and Fairness in the
South African Law of Contract: A Further Instalment' (2016) 27 Stellenbosch Law Review 238; Lewis 'The Uneven Journey to Uncertainty in Contract' (2013) 76 THRHR
80; Davis 'Developing the Common Law of Contract in the Light of Poverty and Illiteracy: The Challenge of the Constitution' (2011) 22 Stellenbosch Law Review 845;
and Brand 'The Role of Good Faith, Equity and Fairness in the South African Law of Contract: The Influence of the Common Law and the Constitution' (2009) 126 SALJ
71.
24 Ubuntu is referred to in the postamble of the interim Constitution in the following terms:
'The adoption of this Constitution lays the secure foundation for the people of South Africa to transcend the divisions and strife of the past, which generated gross
violations of human rights, the transgression of humanitarian principles in violent conflicts and a legacy of hatred, fear, guilt and revenge.
These can now be addressed on the basis that there is a need for understanding but not for vengeance, a need for reparation but not for retaliation, a need for
ubuntu but not for victimisation.'
In Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) (2012 (3) BCLR 219; [2011] ZACC 30) (Everfresh) para 71 this court
explained the meaning of ubuntu. It said ubuntu 'emphasises the communal nature of society' and 'carries in it the ideas of humaneness, social justice and fairness' and
envelopes 'the key values of group solidarity, compassion, respect, human dignity, conformity to basic norms and collective unity'.
25 Concerns have been raised regarding this apparent divergence. See Hutchison above n1 at 101, where Hutchison suggests that the need for a clear and
definitive ruling on the matter by the Constitutional Court has now become urgent. See Wallis above n23 at 547 and 563, where it is suggested that the jurisprudence of
this court has introduced a 'level of uncertainty' into the law of contract. See also Atlantis Property Holdings CC v Atlantis Exel Service Station CC 2019 (5) SA 443 (GP)
([2019] 3 All SA 441) para 83.
26 When interpreting jurisprudence, our courts must make the best sense of judicial reasoning across a diverse set of cases. This requires engagement with
sustained lines of reasoning within a particular case and across cases, rather than the selective lifting of isolated judicial statements to support a predisposed
interpretation. There will always be outlier cases, but doctrinal analysis should offer an account that is coherent and best fits our jurisprudence as a whole. Coherence
speaks not only to the avoidance of contradiction, but to an inner unity or logic in which legal reasoning corresponds to its broader aims. See Dickson 'Interpretation
and Coherence in Legal Reasoning' in Zalter (ed) The Stanford Encyclopedia of Philosophy (Stanford University, Stanford 2016) at 3.1 – 3.4.
27 Bruce and Another v Fleecytex Johannesburg CC and Others 1998 (2) SA 1143 (CC) (1998 (4) BCLR 415; [1998] ZACC 3) paras 6 – 7; and S v Boesak 2001 (1)
SA 912 (CC) (2001 (1) SACR 1; 2001 (1) BCLR 36; [2000] ZACC 25) para 12.
28 See Zimmermann 'Good Faith and Equity' in Zimmermann & Visser (eds) Southern Cross: Civil Law and Common Law in South Africa (Juta & Co Ltd, Cape Town
1996) at 239 – 41.
29 See Hutchison above n1 at 100.
30 Zimmermann above n28 at 218.
31 Two species of the exceptio doli existed: first, the exceptio doli specialis, in terms of which a contract induced by fraud could be met with a claim for restitution.
And, second, the exceptio doli generalis, which provided an equitable remedy against the enforcement of an unfair contract and against the unfair enforcement of
contracts. The exceptio doli generalis afforded a much wider defence by which relief could be refused. See Zimmermann The Law of Obligations: Roman Foundations of
the Civilian Tradition (Juta & Co Ltd, Cape Town 1990) at 663 – 8.
32 Whittaker & Zimmermann 'Good faith in European Contract Law: Surveying the Legal Landscape' in Zimmermann & Whittaker (eds) Good Faith in European
Contract Law (Cambridge University Press, Cambridge 2000) 7 at 19.
33 Mills & Sons v The Trustees of Benjamin Bros (1876) 6 Buch 115 (Mills) at 121.
34 Burger v Central South African Railways 1903 TS 571 at 576.
35 Weinerlein v Goch Buildings Ltd 1925 AD 282 at 295.
36 Id Kotze JA added:
'Equitable principles are only of force insofar as they have become authoritatively incorporated and recognised as rules of positive law. . . . Where the law in a
particular instance is clear, it must be observed, although it may seem to be contrary to considerations of equity.'
37 Id at 292 – 293.
38 Zuurbekom Ltd v Union Corporation Ltd 1947 (1) SA 514 (A) (Zuurbekom) at 535.
39 Id at 537.
40 Paddock Motors (Pty) Ltd v Igesund 1976 (3) SA 16 (A) (Paddock Motors) at 28E – G.
41 Bank of Lisbon and South Africa Ltd v De Ornelas and Another 1988 (3) SA 580 (A) ([1988] ZASCA 35) (Bank of Lisbon).
42 Id at 605H – 607C.
43 Id at 607A – C.
44 Sasfin above n16 at 13F – 14A.
45 Id at 13F – I.
46 Id.
47 Id at 13I – 14A.
48 Id at 15E – F.
49 Id at 9E – F.
50 Id at 9G – H.
51 Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SA 874 (A) ([1984] ZASCA 116). Here, the Appellate Division held that a restraint of trade agreement
is valid and enforceable, as long as it is not contrary to public policy, and that a party who alleges that an agreement is contrary to public policy bears the burden of
proof. The Appellate Division recognised that, although public policy demands that agreements freely and voluntarily entered into should be honoured, it also precludes
the enforcement of a contract that imposes an unreasonable restriction on a person's freedom of trade.
52 Sasfin above n16 at 7H – I.
53 Id at 9B – C.
54 See, amongst others, Botha (now Griessel) and Another v Finanscredit (Pty) Ltd 1989 (3) SA 773 (A) ([1989] ZASCA 56) at 783A – B; and Eerste Nasionale Bank
v Saayman NO 1997(4) SA 302 (SCA) ([1997] 3 All SA 391; [1997] ZASCA 62) at 324B – G.
55 Brisley v Drotsky 2002 (4) SA 1 (SCA) (2002 (12) BCLR 1229; [2002] 3 All SA 363; [2002] ZASCA 35).
56 Id para 22.
57 Id.
58 Id para 22; quoting, with approval, Hutchison 'Non­Variation Clauses in Contract: Any Escape from the Shifren Straitjacket' (2001) 118 SALJ 720 at 744.
59 Brisley id paras 91 – 92.
60 In Brisley id para 93, Cameron JA aligned himself with the caveat expressed in the main judgment to the effect that:
'(N)either the Constitution nor the value system it embodies give the courts a general jurisdiction to invalidate contracts on the basis of judicially perceived notions of
unjustness or to determine their enforceability on the basis of imprecise notions of good faith.'
61 Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA) ([2002] 4 All SA 125; [2002] ZASCA 73) (Afrox Healthcare) para 32.
62 Id.
63 Id paras 22 – 23.
64 Id. The Supreme Court of Appeal, in this regard, affirmed the view expressed by Cameron JA in his concurring judgment in Brisley above n55 para 94.
65 South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) ([2004] 4 All SA 168; [2004] ZASCA 72) (York Timbers) para 29. The Supreme Court of
Appeal stated: 'To say that terms can be implied if dictated by fairness and good faith does not mean that these abstract values themselves will be imposed as terms of
the contract.'
66 Id para 27.
67 Barkhuizen above n17.
68 Id para 1.
69 Id para 3.
70 Id paras 5 and 8. At the hearing the applicant only relied on the argument that the clause violated s 34 of the Constitution. Section 34 of the Constitution
provides that:
'Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate,
another independent and impartial tribunal or forum.'
71 Id para 7.
72 Id paras 23 – 30.
73 Id para 28.
74 Id para 30.
75 Id paras 51 and 73.
76 Id para 57.
77 Id para 87.
78 Id para 57.
79 Id para 56.
80 Id paras 56 and 58.
81 Id para 69.
82 Id.
83 Id para 67.
84 Id paras 84 – 86.
85 Id.
86 Id para 84.
87 Id para 82.
88 Bredenkamp and Others v Standard Bank of SA Ltd 2010 (4) SA 468 (SCA) (2010 (9) BCLR 892; [2010] 4 All SA 113; [2010] ZASCA 75).
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90 Id para 26.
91 Id para 30.
 83 Id para 67.
84 Id paras 84 – 86.
85 Id.
86 Id para 84.
87 Id para 82.
88 Bredenkamp and Others v Standard Bank of SA Ltd 2010 (4) SA 468 (SCA) (2010 (9) BCLR 892; [2010] 4 All SA 113; [2010] ZASCA 75).
89 Id para 25.
90 Id para 26.
91 Id para 30.
92 Id.
93 Id paras 50 – 51.
94 Id para 50.
95 Id paras 44 and 46.
96 Id para 64.
97 See, for example, Roazar CC v The Falls Supermarket CC 2018 (3) SA 76 (SCA) ([2018] 1 All SA 438; [2017] ZASCA 166) para 19; and Mohamed's Leisure
Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty) Ltd 2018 (2) SA 314 (SCA) ([2017] ZASCA 176) (Mohamed's Leisure) para 30. In Potgieter and Another v
Potgieter NO and Others 2012 (1) SA 637 (SCA) ([2011] ZASCA 181) para 34, the Supreme Court of Appeal explained:
'(T)he reason why our law cannot endorse the notion that judges may decide cases on the basis of what they regard as reasonable and fair, is essentially that it will
give rise to intolerable legal uncertainty. . . . Reasonable people, including judges, may often differ on what is equitable and fair. The outcome in any particular case will
thus depend on the personal idiosyncrasies of the individual judge. Or . . . if judges are allowed to decide cases on the basis of what they regard as reasonable and fair,
the criterion will no longer be the law but the judge.'
98 See, for example, Mohammed's Leisure id para 24; and Pridwin above n16 para 27.
99 In Pridwin id, the Supreme Court of Appeal stated:
'A court will use the power to invalidate a contract or not to enforce it, sparingly, and only in the clearest of cases in which harm to the public is substantially
incontestable and does not depend on the idiosyncratic inferences of a few judicial minds.'
100 Everfresh above n24.
101 Id paras 63 – 64.
102 Id paras 65 – 67 and 74.
103 Id para 71.
104 Botha above n4.
105 68 of 1981.
106 Botha above n4 para 4(i).
107 Id para 5.
108 Id para 11. The trust was represented in all proceedings by its trustees in their capacities as trustees.
109 Id para 12.
110 Section 27(1) of the Act provides:
'Any purchaser who in terms of a deed of alienation has undertaken to pay the purchase price of land in specified instalments over a period in the future and who has
paid to the seller in such instalments not less than 50 percent of the purchase price, shall, if the land is registrable, be entitled to demand from the seller transfer of the
land on condition that simultaneously with the registration of the transfer there shall be registered in favour of the seller a first mortgage bond over the land to secure
the balance of the purchase price and interest in terms of the deed of alienation.'
111 Rich NO v Botha [2009] ZANCHC 79 para 23.
112 Id para 30 and para 2 of the order.
113 Clause 8.4 reads, in relevant part:
'Die kopers is ten alle tye geregtig . . . [o]m transport van die eiendom ingevolge artikel 27 van die Wet te eis wanneer hy ten minste een helfte van die koopprys
betaal het.'
('The purchasers are at all times entitled to claim transfer of the property in terms of section 27 of the Act when he has at least paid one half of the purchase price.')
(Own translation.)
114 Botha v Rich NO 2013 JDR 0586 (NCK) (Botha Full Court) para 4.
115 Id paras 7 – 8. The full court relied on Dongwe v Slater­Kinghorn 2009 JDR 1341 (KZP) para 34 as authority for this proposition.
116 Botha Full Court id paras 14 – 15.
117 Botha above n4 para 21.
118 Id.
119 Id para 24.
120 Id para 28.
121 Id para 34.
122 Id paras 35 and 39.
123 Id para 36.
124 Id paras 36 – 37.
125 Id para 39.
126 Id para 37.
127 Id para 40.
128 Id.
129 Id.
130 Id para 49.
131 Id para 51.
132 Id paras 49 and 53.
133 Id para 49.
134 Id para 51.
135 Id paras 45 – 46 and fn 64. See also Brand 'The Role of Good Faith, Equity and Fairness in the South African Law of Contract: A Further Instalment' above n23
at 247; and Du Plessis above n22 at 410.
136 Id paras 45 – 46.
137 See, for example, Hutchison above n1 at 117 – 20; Wallis above n23 at 554 – 7; and Sharrock above n22. However, as a counterpoint, see Brand 'The Role of
Good Faith, Equity and Fairness in the South African Law of Contract: A Further Instalment' above n23 at 247; and Boonzaier 'Rereading Botha v Rich' (2020) 137 SALJ
1.
138 Supreme Court of Appeal judgment above n9 paras 37 – 38.
139 The importance of the statutory scheme in Botha has been recognised by both academics and courts. Boonzaier, above n137 at 6, states that it was 'plainly the
statutory scheme that had triggered and shaped the dispute' which led the court to refuse to enforce the trust's right to cancel. In addition, Du Plessis, above n22 at fn
144, correctly states that Botha 'was decided in the context of a statutory regime aimed at protecting purchasers of land on instalments'. Similarly, in Atlantis above n25
para 30, the High Court recognised the importance of the statutory context in Botha. The High Court stated: '(t)he comments [in Botha] were made in the context of the
legislation under discussion and the application thereof to the particular facts.'
140 See Boonzaier id at 7.
141 Camps Bay Ratepayers and Residents Association and Another v Harrison and Another 2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC 19) para 28.
142 Id; and Turnbull­Jackson v Hibiscus Coast Municipality 2014 (6) SA 592 (CC) (2014 (11) BCLR 1310; [2014] ZACC 24) paras 54 – 55.
143 See para 25 of the Supreme Court of Appeal judgment above n9, which reads:
'In the High Court Davis J did not refer to Bredenkamp in his judgment, despite its binding force. (The statement of Kriegler J in Ex parte Minister of Safety and
Security: In re S v Walters [at] paras 60 to 61, that the decisions of this court bind the High Court, is still good law.)'
144 See France and Germany, for instance.
145 Hesselink 'The Concept of Good Faith' in Hartkamp et al Towards a European Civil Code 4 ed (Kluwer Law International BV, The Netherlands 2011) 619 at 619.
146 The most relevant articles are 157 and 242. Article 157 provides that contracts are to be 'interpreted as required by good faith'. According to Du Plessis above
n22 at 384, art 157 resembles the rule concerning contractual interpretation recognised in York Timbers, above n65 para 32, where the following was said:
'In the interpretation process, the notions of fairness and good faith that underlie the law of contract again have a role to play. While a court is not entitled to
superimpose on the clearly expressed intention of the parties its notion of fairness, the position is different when a contract is ambiguous. In such a case, the principle
that all contracts are governed by good faith is applied and the intention of the parties is determined on the basis that they negotiated with one another in good faith.'
147 Du Plessis id at 380.
148 Id at 383.
149 Whittaker & Zimmermann above n32 at 32 – 4.
150 Id at 34 – 7.
151 Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433 (Interfoto) at 439F­G. This statement of principle has been called into question,
most famously in Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111 (QB) para 124 per Leggatt J. However, Leggatt J conceded, in para 131,
that English law had not reached the stage 'where it is ready to recognise a requirement of good faith as a duty implied by law, even as a default rule, into all
commercial contracts'.
152 British Telecommunications Plc v Telefónica O2 UK Ltd [2014] UKSC 42 para 37; and Braganza v BP Shipping [2015] UKSC 17 para 30.
153 See, for example, Sheikh Tahnoon Bin Saeed Bin v Kent [2018] EWHC 333 (Comm) para 174, where it was held that 'the implication of a duty of good faith in
the contract is essential to give effect to the parties' reasonable expectations'.
154 An example of such an area is consumer protection. The Consumer Rights Act 2015, enacted to give effect to EU consumer protection laws, requires judges to
consider the fairness of contractual terms in the context of consumer contracts. Section 62(1) provides that '(a)n unfair term of a consumer contract is not binding on
the consumer'. Section 62(4) defines an unfair term as one which 'contrary to the requirement of good faith, causes a significant imbalance in the party's rights and
obligations under the contract to the detriment of the consumer'. These two sections reproduce art 6 and art 3(1), respectively, of the Council Directive 93/13/EEC of 5
April 1993 on unfair terms in consumer contracts.
155 Price & Hutchison above n22 at 824.
156 Aktieselskabet Dansk Skibsfinansiering v Brothers [2000] 3 HKCFAR.
157 Bhasin v Hrynew 2014 SCC 71.
158 Id para 33.
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160 Id.
161 Id para 42.
 obligations under the contract to the detriment of the consumer'. These two sections reproduce art 6 and art 3(1), respectively, of the Council Directive 93/13/EEC of 5
April 1993 on unfair terms in consumer contracts.
155 Price & Hutchison above n22 at 824.
156 Aktieselskabet Dansk Skibsfinansiering v Brothers [2000] 3 HKCFAR.
157 Bhasin v Hrynew 2014 SCC 71.
158 Id para 33.
159 Id para 73.
160 Id.
161 Id para 42.
162 Id para 64. The court stated: 'An organizing principle therefore is not a free­standing rule, but rather a standard that underpins and is manifested in more
specific legal doctrines.'
163 Id para 66.
164 Viven­Wilksch 'Good Faith in Contracts: Australia at a Crossroads' (2019) 1 Journal of Commonwealth Law 273 at 273 – 4.
165 Id.
166 The species of contract in which a duty of good faith has been found to exist include franchise agreements and subcontracting agreements. See Burger King
Corporation v Hungry Jack's Pty Ltd (2001) 69 NSWLR 558; and Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49.
167 Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 (Vodafone).
168 Id paras 125 and 189. However, in that case a duty to act in good faith had been excluded by the express terms of the contract.
169 Id paras 192 – 193.
170 Pharmaceutical Manufacturers Association of South Africa and Another: In re Ex parte President of the Republic of South Africa and Others 2000 (2) SA 674
(CC) (2000 (3) BCLR 241; [2000] ZACC 1) (Pharmaceutical Manufacturers) para 44. See also Carmichele v Minister of Safety and Security and Another (Centre for
Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2001 (10) BCLR 995; [2001] ZACC 22) para 33.
171 Barkhuizen above n17 para 28. See also Carmichele id para 54.
172 Barkhuizen id paras 23 – 30.
173 Napier v Barkhuizen 2006 (4) SA 1 (SCA) (2006 (9) BCLR 1011; [2006] 2 All SA 496; [2005] ZASCA 119) (Barkhuizen SCA).
174 Barkhuizen above n17 paras 70 – 71.
175 Barkhuizen SCA above n173 para 12, referring to Brisley above n55.
176 Barkhuizen above n17 para 51.
177 Id para 51; and Everfresh above n24 paras 71 – 72.
178 Brisley above n55 para 22.
179 For instance, the rules in our contract law concerning fraud, duress, misrepresentation, estoppel, implied terms and rectification are themselves the
embodiment of abstract values.
180 Carmichele above n170 para 33.
181 Moseneke 'The Fourth Bram Fisher Memorial Lecture: Transformative Adjudication' (2002) 18 SALJHR 309 at 316.
182 Carmichele above n170 para 54.
183 Everfresh above n24 para 71.
184 Courts must be mindful that, in terms of the doctrine of separation of powers, the major engine for law reform is the legislature and not the judiciary. See
Masiya v Director of Public Prosecutions, Pretoria (Centre for Applied Legal Studies and Another, Amici Curiae) 2007 (5) SA 30 (CC) (2007 (2) SACR 435; 2007 (8)
BCLR 827; [2007] ZACC 9) para 31; and Carmichele above n170 paras 36 and 55.
185 Tuckers Land and Development Corporation (Pty) Ltd v Hovis 1980 (1) SA 645 (A) (Tuckers Land) at 652D – F.
186 Id.
187 BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A) (BK Tooling) at 421A – B.
188 Id.
189 See [73] – [75].
190 Affordable Medicines Trust and Others v Minister of Health and Others 2006 (3) SA 247 (CC) (2005 (6) BCLR 529; [2005] ZACC 3) (Affordable Medicines) para
108.
191 Section 1(c) of the Constitution.
192 Pridwin above n16 para 27.
193 Id.
194 Id para 27(i).
195 Barkhuizen above n17 para 57.
196 Id.
197 Klass 'Three Pictures of Contract: Duty, Power, and Compound Rule' (2008) 83 New York University Law Review 1726 at 1766.
198 Wells v South African Alumenite Company 1927 AD 69.
199 Printing and Numerical Registering Co v Sampson (1875) LR 19 Eq 462 (CA) at 465.
200 This is not to say that a constitutional right must be implicated for a contractual term to be contrary to public policy.
201 Pridwin above n16 para 27(v). See also Mohamed's Leisure above n97 para 24; Afrox Healthcare above n61 paras 22 – 23; Brisley above n55 para 94; and
Sasfin above n16 at 9B – C.
202 Pridwin id para 27(v).
203 In Barkhuizen SCA above n173 para 13 the Supreme Court of Appeal put it thus:
'(I)ntruding on apparently voluntarily concluded arrangements is a step that Judges should countenance with care, particularly when it requires them to impose their
individual conceptions of fairness and justice on parties’ individual arrangements.'
This approach was affirmed by this court in Barkhuizen above n17 paras 70–71.
204 See second judgment [158].
205 Barkhuizen id paras 58 and 69.
206 Id para 85.
207 Id para 57.
208 In Raz 'Promises in Morality and Law' (1982) 95 Harvard Law Review 916 at 933, Raz argues that '(t)he purpose of contract law should be not to enforce
promises, but to protect both the practice of undertaking voluntary obligations and the individuals who rely on that practice'.
209 Barkhuizen above n17 paras 84 – 86.
210 Supreme Court of Appeal judgment above n9 para 39.
211 This would require an amendment, in writing and signed by the parties, to the definition of the approved location in clause 2.5 of the franchise agreements.
However, we make no finding in this regard.
212 See [9].
213 Minister of Finance and Another v Van Heerden 2004 (6) SA 121 (CC) (2004 (11) BCLR 1125; [2004] 12 BLLR 1181; [2004] ZACC 3) (Van Heerden) para 27.
214 Id para 31.
215 In Fraser v Children's Court, Pretoria North, and Others 1997 (2) SA 261 (CC) (1997 (2) BCLR 153; [1997] ZACC 1), this court stated, unequivocally, para 20:
'There can be no doubt that the guarantee of equality lies at the very heart of the Constitution. It permeates and defines the very ethos upon which the Constitution is
premised.'
216 Sections 1 and 7(1) of the Constitution.
217 Van Heerden above n213 para 87.
218 Sections 2 and 3 of the National Empowerment Fund Act above n2.
219 Barkhuizen above n17.
220 Brownsword Contract Law: Themes for the Twenty­First Century 2 ed (OUP, Oxford 2006) at 165.
221 Zimmermann & Visser above n28 at 15, explain the neglect of the third grace thus:
'The three Graces of the South African legal system are civil law, common law and customary law. The free spirit of the third Grace makes it difficult for her to join in
the circle. To enable her to do so may be one of the great challenges of the new South African legal order. Someone may then, perhaps, be able to tell the story of the
Africanisation of Roman­Dutch law in twenty­first century South Africa.'
[Emphasis added.]
222 Barkhuizen above n17 para 51 and Everfresh above n24 para 71.
223 Interfoto above n151 at 439.
224 See Rawls A Theory of Justice (Harvard University Press, Cambridge 2003) at 3. Perhaps the most famous use of the concept/conception distinction is that of
the political philosopher John Rawls. Rawls appeals to the distinction between the concept of justice and particular conceptions of justice. His theory, of justice as
fairness, is defended as the best conception of justice. See also, more generally, Dworkin Law's Empire (Harvard University Press, Cambridge 1988), where the author
generally argues for the formulation of guidelines for finding that elusive right answer that should try to incorporate the virtues of justice, morality, fairness and
integrity.
225 Gordley 'Equality in Exchange' (1981) 69 California Law Review 1587.
226 Id at 1588 and 1638; and fnn 205, 206 and 207.
227 Id at 1638.
228 Id.
229 Collins The Law of Contract 4 ed (LexisNexis, London 2003) at 4.
230 Id at 6.
231 Id at 6 – 7.
232 Atiyah The Rise and Fall of Freedom of Contract (OUP, Oxford 1979).
233 Id at 403.
234 Brownsword above n220 at 49. The current justification for freedom of contract is more instrumental than regarding freedom of contract as a value in itself. In
this economic efficiency form, freedom of contract is essential in order to ensure that transactions maximise wealth. See also Collins above n229 at 25 – 6.
235 Collins id at 23.
236 Id at 24.
237 Atiyah Essays on Contract (OUP, Oxford 1986) at 356, cited in Kimel 'Neutrality, Autonomy, and Freedom of Contract' (2001) 21 Oxford Journal of Legal Studies
473 at fn 2.
238 Atiyah id at 357.
239 Brownsword above n220 at 69. See also Atiyah above n237 at 148, where it was stated:
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240 Kimel above n237 at 486.
 235 Collins id at 23.
236 Id at 24.
237 Atiyah Essays on Contract (OUP, Oxford 1986) at 356, cited in Kimel 'Neutrality, Autonomy, and Freedom of Contract' (2001) 21 Oxford Journal of Legal Studies
473 at fn 2.
238 Atiyah id at 357.
239 Brownsword above n220 at 69. See also Atiyah above n237 at 148, where it was stated:
'[To argue that] to prevent a person, even in his own interests, from binding himself is to show disrespect for his moral autonomy, can ring very hollow when used to
defend a grossly unfair contract secured at the expense of a person of little understanding or bargaining skill.'
240 Kimel above n237 at 486.
241 Kennedy 'Distributive and Paternalistic Motives in Contract and Tort Law, with Special Reference to Compulsory Terms and Unequal Bargaining Power' (1982) 41
Maryland Law Review 563 at 582.
242 Brownsword above n220.
243 Id.
244 Id at 135.
245 Gordley above n225 at 1632.
246 Id at 1621 and 1627.
247 Id at 1592 – 3.
248 32 of 1952.
249 Tjollo Ateljees (Eins) Bpk v Small 1949 (1) SA 856 (A).
251 Bank of Lisbon above n41.
252 Jacques du Plessis above n22 at 397.
252 Paul du Plessis 'Good Faith and Equity in the Law of Contract in the Civilian Tradition' (2002) 65 THRHR 397 at 407.
253 Id at 406.
254 See generally Lubbe 'The Last Pandectist? — JC de Wet in Methodological Perspective' in Du Plessis & Lubbe (eds) A Man of Principle. The Life and Legacy of JC
de Wet (Juta & Co Ltd, Cape Town 2013).
255 Cockrell above n22 at 45 – 6.
256 Id. See also Zimmermann & Visser above n28 at 240 – 1 and Andrew Hutchison 'Good Faith in Contract: A Uniquely South African Perspective' (2019) 1 The
Journal of Commonwealth Law 1 at 2.
257 See generally Brownsword above n220 at 68, where he states — although not speaking on our law — that 'the maxim pacta sunt servanda (at any rate, if
applied in a literal and mechanical fashion), like the ideal of freedom of contract, is out of place where the parties' relationship is ongoing, evolving and dynamic'.
258 Cockrell above n22 at 48.
259 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) ([1974] 3 All SA 497) (McAlpine) at 532G – 533A, where Corbett JA
explained the distinction between implied terms and tacit terms:
'The implied term . . . is essentially a standardised one, amounting to a rule of law which the Court will apply unless validly excluded by the contract itself. While it
may have originated partly in the contractual intention, often other factors, such as legal policy, will have contributed to its creation. The tacit term, on the other hand,
is a provision which must be found, if it is to be found at all, in the unexpressed intention of the parties. Factors which might fail to exclude an implied term might
nevertheless negative the inference of a tacit term. . . . The Court does not readily import a tacit term. It cannot make contracts for people; nor can it supplement the
agreement of the parties merely because it might be reasonable to do so. Before it can imply a tacit term the Court must be satisfied, upon a consideration in a
reasonable and businesslike manner of the terms of the contract and the admissible evidence of surrounding circumstances that an implication necessarily arises that
the parties intended to contract on the basis of the suggested term.'
260 Cockrell above n22 at 53. See also the proffered distinction between tacit and implied terms in McAlpine id.
261 Id at 55. See also Dale Hutchison 'From Bona Fides to Ubuntu: The Quest for Fairness in the South African Law of Contract' above n1 at 108; and Andrew
Hutchison 'Good Faith in Contract: A Uniquely South African Perspective' above n256 at 6.
262 Cockrell id, citing Tuckers Land above n185 at 652.
263 Cockrell id, citing LTA Engineering Co Ltd v Seacat Investments (Pty) Ltd 1974 (1) SA 747 (A) at 770 771.
264 Cockrell id, citing Neugebauer & Co Ltd v Hermann 1923 AD 564 at 573 – 574.
265 Garlick Ltd v Phillips 1949 (1) SA 121 (A).
266 BK Tooling above n187 at 434 – 435.
267 Cockrell above n22 at 56.
268 Cockrell id states:
'It is an illegitimate bargaining tactic to induce a contract by making a false statement of fact (misrepresentation), or by coercing the promissor (duress), or by
abusing a position of trust (undue influence).'
269 Collins above n229 at 33.
270 Sasfin above n16.
271 Cockrell above n22 at 62.
272 Id.
273 15 of 1962.
274 Id s 3.
275 Collins above n229 at 12.
276 Barkhuizen above n17.
277 First judgment [79] – [80].
278 Id.
279 See the discussion at [159] – [161] below.
280 Barkhuizen above n17 para 27.
281 Id paras 28 – 30.
282 Id paras 51 – 52.
283 Id para 56.
284 Id para 67. The direct, unmediated application of notions of fairness, unreasonableness and simple justice between contracting parties is explicitly made
throughout the judgment. See also paras 69 – 73, where the so­called inflexibility argument raised in the High Court was dealt with.
285 Id para 84.
286 Id para 58.
287 Id para 85.
288 Id para 82.
289 Pridwin above n16 para 27.
290 Bredenkamp above n88.
291 See first judgment [42] and the cases cited in n98.
292 See Dale Hutchison above n1 at 115, where the author questions whether this court accepted or would accept this reading down of the majority judgment in
Barkhuizen, when discussing that this court refused to grant leave to appeal in Bredenkamp. See also Sharrock above n22 at 185, where the author shared the view
that —
'(i)t is a great pity that the Constitutional Court did not engage critically with the appeal court's view regarding unfair enforcement because the view appears to rest
upon weak foundations. The appeal court was evidently persuaded to adopt its inflexible stance by two considerations: concepts like reasonableness, fairness and good
faith are merely abstract values not independent substantive rules, and allowing judges to refuse to implement contractual provisions on the basis of unfairness will
give rise to intolerable legal and commercial uncertainty. Neither consideration is sustainable or convincing. Even if reasonableness and unfairness are merely abstract
values, it does not follow that they cannot be determinative of public policy on a particular issue. The approach followed by the appeal court in relation to substantive
unfairness of contractual terms demonstrates this very point.'
293 Bredenkamp above n88 para 53.
294 Pridwin above n16 para 27.
295 Id.
296 Supreme Court of Appeal judgment above n9 para 35.
297 Sasfin above n16.
298 See Magna Alloys above n51.
299 See Pridwin above n16 para 27.
300 Id.
301 Id.
302 Barkhuizen above n17 para 82.
303 Everfresh above n24.
304 Id para 71. In what seems to have become a new extra­curial tradition for serving Supreme Court of Appeal judges who are dissatisfied with this court's
judgments, Carole Lewis criticised this judgment in Lewis 'The Uneven Journey to Certainty in Contract' (2013) 76 THRHR 80. In turn her extra­curial criticism was used
as supporting authority in Roazar above n97 paras 20 – 21. If only for purposes of a balanced assessment, reference should be made to the contrary views expressed
on Everfresh above n24 by other commentators, see Price & Hutchison above n22. In the present case Lewis AJP cited an article by a colleague, Wallis above n23, to
justify ignoring this court's judgment in Botha above n4. See Supreme Court of Appeal judgment above n9 paras 20 – 24.
305 Botha id.
306 First judgment [48] – [58].
307 Botha above n4 paras 45 – 46.
308 68 of 1981.
309 Botha above n4 para 21 and again para 23, where the court stated the following:
'At the heart of the case is whether Mrs Botha was entitled to transfer of the property in terms of s 27(1). The determination of the issue depends on a proper
interpretation of the section. The issue at stake entails the constitutionality of the enforcement of a cancellation clause in a contract of sale of immovable property in
circumstances where more than half of the purchase price was paid, and demand for transfer of the property in terms of s 27(1) was refused by the seller.'.
310 Id para 41.
311 Id para 44.
312 Id paras 45 – 47.
313 Id paras 47 – 48.
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315 Id para 49 and fn 70.
316 Id para 49.
 interpretation of the section. The issue at stake entails the constitutionality of the enforcement of a cancellation clause in a contract of sale of immovable property in
circumstances where more than half of the purchase price was paid, and demand for transfer of the property in terms of s 27(1) was refused by the seller.'.
310 Id para 41.
311 Id para 44.
312 Id paras 45 – 47.
313 Id paras 47 – 48.
314 Id para 49 and fn 69.
315 Id para 49 and fn 70.
316 Id para 49.
317 Id para 21.
318 Id paras 50 – 51.
319 Numsa obo Nganezi v Dunlop Mixing and Technical Services (Pty) Ltd and Others 2019 (5) SA 354 (CC) (2019 (8) BCLR 966; [2019] ZACC 25) (Dunlop).
320 Id para 66.
321 Id.
322 Id.
323 Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd 2012 (3) SA 531 (CC) (2012 (5) BCLR 449; [2012] ZACC 2).
324 Id paras 52 – 53.
325 Business Zone 1010 CC t/a Emmerentia Convenience Centre v Engen Petroleum Ltd and Others 2017 (6) BCLR 773 (CC) ([2017] ZACC 2).
326 120 of 1977.
327 Business Zone above n325 para 52.
328 Id paras 54 – 55.
329 Barkhuizen above n17 paras 28 – 29.
330 Id para 51.
331 Cameron & Boonzaier 'Venturing beyond formalism: The Constitutional Court of South Africa's equality jurisprudence' (2020) 92 Rabel Journal of Comparative
and International Private Law [forthcoming].
332 See for example Du Plessis and Others v De Klerk and Another 1996 (3) SA 850 (CC) (1996 (5) BCLR 658; [1996] ZACC 10) para 104.
333 See Schierhout v Minister of Justice 1926 AD 99 at 109 – 110, where it was held:
'It is a fundamental principle of our law that a thing done contrary to the direct prohibition of the law is void and of no effect. . . . So that what is done contrary to the
prohibition of the law is not only of no effect, but must be regarded as never having been done—and that whether the lawgiver has expressly so decreed or not; the
mere prohibition operates to nullify the act. The maxim, "Quod contra legem fit pro infecto habetur", is also recognised in English law. And the disregard of peremptory
provisions of a statute is fatal to the validity of the proceeding affected.'
See also Cool Ideas 1186 CC v Hubbard and Another 2014 (4) SA 474 (CC) (2014 (8) BCLR 869; [2014] ZACC 16) (Cool Ideas) para 77.
334 Gordley above n225 at 1587.
335 See Pridwin above n16 para 27.
336 BK Tooling above n187.
337 Boonzaier above n137 at 6 – 7.
338 Jacques du Plessis above n22 at 381.
339 Botha above n4 para 46.
340 See [194].
341 See first judgment at [93] – [96].
342 Id [2]. See also s 3(c) of the National Empowerment Fund Act 105 of 1998.
343 Everfresh above n24 para 71.
344 The Constitution is a document committed to social transformation in both private and public spheres. O' Regan J stated in Mkontwana v Nelson Mandela
Metropolitan Municipality and Another; Bisset and Others v Buffalo City Municipality and Others; Transfer Rights Action Campaign and Others v MEC, Local Government
and Housing, Gauteng and Others (KwaZulu­Natal Law Society and Msunduzi Municipality as Amici Curiae) 2005 (1) SA 530 (CC) (2005 (2) BCLR 150; [2004] ZACC 9)
para 81 '(a)s this Court has emphasised on many occasions, our Constitution is a document committed to social transformation'.
345 First judgment at [75] – [77] and second judgment at [111] – [113].
346 Du Plessis The Harmonisation of Good Faith and Ubuntu in the South African Common Law of Contract (LLM thesis, University of South Africa 2017) at 377,
opined that 'the harmonisation of good faith and ubuntu in the common law of contract is essential not only to establish a plural legal culture but also to develop the
common law of contract in line with the Constitution'.
347 Everfresh above n24 para 71.
348 Du Plessis and Others v De Klerk and Another above n332 para 86. See also Davis & Klare 'Transformative Constitutionalism and the Common and Customary
Law' (2010) 26 South African Journal of Human Rights 403 at 412.
349 S v Makwanyane and Another 1995 (3) SA 391 (CC) (1995 (2) SACR 1; 1995 (6) BCLR 665; [1995] ZACC 3).
350 Id para 237.
351 Id.
352 Ndima 'Reconceiving African Jurisprudence in a Post­Imperial Society: The Role of Ubuntu in Constitutional Adjudication (2015) 48 The Comparative and
International Law Journal of Southern Africa at 359.
353 Id at 360 – 3.
354 Id at 367 and 373.
355 Id at 363.
356 Id at 373.
357 Id at 366.
358 Id at 373 – 4.
359 Id at 373 – 6.
360 Second judgment [106].
361 Id. [Emphasis added.]
362 Id [108].
363 Id. [Emphasis added.]
364 Hutchison 'Decolonizing South African Contract Law: An Argument for Synthesis' in Siliquini­Cinelli (ed) The Constitutional Dimension of Contract Law: A
Comparative Perspective (Springer International Publishing, 2017) 151 at 165.
365 High Court judgment above n1 paras 9 and 30 – 31.
366 Id para 44.
367 Davis J id states:
'Legal certainty is a shibboleth if it is meant to imply that inevitably there is one right answer that stares litigants in the face, so much so that there is never a risk that
an opposite conclusion may be reached by a court. I venture to suggest that in the vast majority of cases the approach adopted in this dispute on its specific facts will
not necessarily be followed, where the consequence of a breach is so reasonably foreseen and the remedy is appropriate.'
368 First judgment [20] – [69] and second judgment [111] – [143].
369 See Hutchison above n364 at 158, where he states that the exceptio doli generalis was a clause which could be relied on by a party to challenge bad faith
conduct by the other contracting party. This principle was considered unnecessary as all consensual contracts rested on good faith (thus being relegated to RIP status).
370 Davis & Klare above n348 at 406.
371 Hutchison 'Good Faith in Contract: A Uniquely South African Perspective' above n256 at 263 – 4. See also Makate v Vodacom Ltd 2016 (4) SA 121 (CC) (2016
(6) BCLR 709; [2016] ZACC 13); Mighty Solutions t/a Orlando Service Station and Another v Engen Petroleum Ltd and Another 2016 (1) SA 621 (CC) (2016 (1) BCLR
28; [2015] ZACC 34); Nkata v Firstrand Bank Ltd 2016 (4) SA 257 (CC) (2016 (6) BCLR 794; [2016] ZACC 12); Paulsen and Another v Slip Knot Investments 777 (Pty)
Ltd 2015 (3) SA 479 (CC) (2015 (5) BCLR 509; [2015] ZACC 5); Botha above n4; Cool Ideas above n333; Malan v City of Cape Town 2014 (6) SA 315 (CC) (2014 (11)
BCLR 1265; [2014] ZACC 25); Maphango above n323; Everfresh above n24; and Barkhuizen above n17.
372 68 of 2008.
373 34 of 2005.
374 Section 52(2) of the CPA.
375 Section 7 of the CPA.
376 Davis above n23 at 849 referring to the work of Robert Hale.
377 The preamble to the CPA provides:
'The people of South Africa recognise—
That apartheid and discriminatory laws of the past have burdened the nation with unacceptably high levels of poverty, illiteracy and other forms of social and
economic inequality;
That it is necessary to develop and employ innovative means to —
(a) fulfil the rights of historically disadvantaged persons and to promote their full participation as consumers;
(b) protect the interests of all consumers, ensure accessible, transparent and efficient redress or consumers who are subjected to abuse or exploitation in the
marketplace; and
(c) to give effect to internationally recognised customer rights; . . . .'
Section 3 stipulates the purposes of the NCA which are aimed at, inter alia, providing access to previously disadvantaged individuals in the following terms:
'The purposes of this Act are to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable,
responsible, efficient, effective and accessible credit market and industry, and to protect consumers, by—
(a) promoting the development of a credit market that is accessible to all South Africans, and in particular to those who have historically been unable to access
credit under sustainable market conditions; . . . .'
The preamble of the Extension of Security of Tenure Act 62 of 1997 provides:
'(I)t is desirable that the law should promote the achievement of long­term security of tenure for occupiers of land, where possible through the joint efforts of
occupiers, land owners, and government bodies; that the law should extend the rights of occupiers, while giving due recognition to the rights, duties and legitimate
interests of owners; that the law should regulate the eviction of vulnerable occupiers from land in a fair manner, while recognising the right of land owners to apply to
court for an eviction order in appropriate circumstances to ensure that occupiers are not further prejudiced; . . . .'
The preamble of the Prevention of Illegal Evictions from and Unlawful Occupation of Land Act 19 of 1998 provides:
'(N)o one may be evicted from their home, or have their home demolished without an order of court made after considering all the relevant circumstances; . . . .'
In addition, the Act recognises the rights of vulnerable groups of society by providing that:
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recognised that the needs of those groups should be considered; . . . .'
The preamble of the Rental Housing Act 50 of 1999 provides: '(T)here is a need to balance the rights of tenants and landlords and to create mechanisms to protect
 occupiers, land owners, and government bodies; that the law should extend the rights of occupiers, while giving due recognition to the rights, duties and legitimate
interests of owners; that the law should regulate the eviction of vulnerable occupiers from land in a fair manner, while recognising the right of land owners to apply to
court for an eviction order in appropriate circumstances to ensure that occupiers are not further prejudiced; . . . .'
The preamble of the Prevention of Illegal Evictions from and Unlawful Occupation of Land Act 19 of 1998 provides:
'(N)o one may be evicted from their home, or have their home demolished without an order of court made after considering all the relevant circumstances; . . . .'
In addition, the Act recognises the rights of vulnerable groups of society by providing that:
'(S)pecial consideration should be given to the rights of the elderly, children, disabled persons and particularly households headed by women, and that it should be
recognised that the needs of those groups should be considered; . . . .'
The preamble of the Rental Housing Act 50 of 1999 provides: '(T)here is a need to balance the rights of tenants and landlords and to create mechanisms to protect
both tenants and landlords against unfair practices and exploitation; . . . .'.
378 Hutchison & Siliquini­Cinelli 'Beyond Common Law: Contractual Privity in Australia and South Africa' (2017) 12 Journal of Comparative Law 49 at 75.
379 Davis & Klare above n348 at 412 note that it is not every common law problem which requires a solution deducible from the Constitution's animating values.
The transformative methodology is context oriented and this methodology is attentive to the values of stability and predictability and is always open to reconsideration
and contestation.
380 53 of 2003.
381 Section 9(2) of the Constitution states that equality includes the full and equal enjoyment of all rights and freedoms . The BBBEE Act and the amended Codes of
Good Practice seek to give effect to this right. The preamble of the BBBEE Act provides that —
'unless further steps are taken to increase the effective participation of the majority of South Africans in the economy, the stability and prosperity of the economy in
the future may be undermined to the detriment of all South Africans, irrespective of race; . . .'.
382 High Court judgment above n1 para 39.
383 Second judgment [182] – [184].
384 Id [186] – [188].
385 First judgment [198].
386 Barkhuizen above n17 paras 56 – 58.
387 High Court judgment above n1 para 29.
388 Davis & Klare above n348 at 415.
389 Davis above n23 at 848.
390 Barkhuizen above n17 para 58.
391 Id paras 64 – 65.

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