The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract)
| dc.contributor.author | Naude, Tjakie | |
| dc.date.accessioned | 2017-09-06T07:09:10Z | |
| dc.date.available | 2017-11-01 | |
| dc.date.available | 2017-09-06T07:09:10Z | |
| dc.date.issued | 2016-11-01 | |
| dc.description.abstract | This article considers the exceptio non adimpleti contractus (defence of the unfulfilled contract / right to withhold performance of a reciprocal obligation if the other party did not make or tender proper performance). It first focuses on the role of this defence in lease contracts. The weight of South African authority is in favour of only recognising proportional reduction in rent as a remedy for a lessee who received partial use and enjoyment of the leased object, so that a right to withhold the full rent with reference to the exceptio is not available as a further defence. Nevertheless, the case of Ntshiqa v Andreas Supermarket, which applied the exceptio and the rules on the relaxation thereof in the leading case on the exceptio of BK Tooling v Scope Precision Engineering in this context, has not been specifically overruled, and has often been cited with approval by academic writers. This creates uncertainty about the lessee's exact obligations and remedies. If it is accepted that proportional reduction in rent is the appropriate remedy, rather than the exceptio, it may give the impression that the law of lease is not consistent with the general principles of contract law on remedies for breach, which recognise that the exceptio applies to all reciprocal contracts. However, there may be good policy reasons why different types of specific contracts should have their own deviating rules. This contribution shows that in this instance the rules on lease could be reconciled with the general principles. It argues for some modification of the currently accepted principles on the exceptio as well as recognition of proportionate reduction in price as a generalised remedy for breach. There is already implicit support for this modification in the cost orders made by courts who relaxed the exceptio. When rent is payable in advance, the right to suspend performance in the face of an anticipatory breach becomes relevant, and proposals are also made in this regard. The rules argued for in this contribution are consistent with a more general principle that the exceptio as well as the remedy of suspension may only be raised to the extent consistent with good faith or reasonableness. The article also comprises comparative research into Austrian and German law as well as the Principles of European Contract Law: Lease and the European Draft Common Frame of Reference. | en_ZA |
| dc.identifier.apacitation | Naude, T. (2016). The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract). <i>Stellenbosch Law Review</i>, http://hdl.handle.net/11427/25073 | en_ZA |
| dc.identifier.chicagocitation | Naude, Tjakie "The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract)." <i>Stellenbosch Law Review</i> (2016) http://hdl.handle.net/11427/25073 | en_ZA |
| dc.identifier.citation | Naudé, T. (2016). The principle of reciprocity in continuous contracts like Lease: what is and should be the role of the exceptio non adimpleti contractus (Defence of the Unfulfilled Contract)?. Stellenbosch Law Review, 27(2), 323-353. | en_ZA |
| dc.identifier.issn | 1016-4359 | en_ZA |
| dc.identifier.ris | TY - Journal Article AU - Naude, Tjakie AB - This article considers the exceptio non adimpleti contractus (defence of the unfulfilled contract / right to withhold performance of a reciprocal obligation if the other party did not make or tender proper performance). It first focuses on the role of this defence in lease contracts. The weight of South African authority is in favour of only recognising proportional reduction in rent as a remedy for a lessee who received partial use and enjoyment of the leased object, so that a right to withhold the full rent with reference to the exceptio is not available as a further defence. Nevertheless, the case of Ntshiqa v Andreas Supermarket, which applied the exceptio and the rules on the relaxation thereof in the leading case on the exceptio of BK Tooling v Scope Precision Engineering in this context, has not been specifically overruled, and has often been cited with approval by academic writers. This creates uncertainty about the lessee's exact obligations and remedies. If it is accepted that proportional reduction in rent is the appropriate remedy, rather than the exceptio, it may give the impression that the law of lease is not consistent with the general principles of contract law on remedies for breach, which recognise that the exceptio applies to all reciprocal contracts. However, there may be good policy reasons why different types of specific contracts should have their own deviating rules. This contribution shows that in this instance the rules on lease could be reconciled with the general principles. It argues for some modification of the currently accepted principles on the exceptio as well as recognition of proportionate reduction in price as a generalised remedy for breach. There is already implicit support for this modification in the cost orders made by courts who relaxed the exceptio. When rent is payable in advance, the right to suspend performance in the face of an anticipatory breach becomes relevant, and proposals are also made in this regard. The rules argued for in this contribution are consistent with a more general principle that the exceptio as well as the remedy of suspension may only be raised to the extent consistent with good faith or reasonableness. The article also comprises comparative research into Austrian and German law as well as the Principles of European Contract Law: Lease and the European Draft Common Frame of Reference. DA - 2016-11-01 DB - OpenUCT DP - University of Cape Town J1 - Stellenbosch Law Review LK - https://open.uct.ac.za PB - University of Cape Town PY - 2016 SM - 1016-4359 T1 - The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract) TI - The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract) UR - http://hdl.handle.net/11427/25073 ER - | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11427/25073 | |
| dc.identifier.vancouvercitation | Naude T. The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract). Stellenbosch Law Review. 2016; http://hdl.handle.net/11427/25073. | en_ZA |
| dc.language | eng | en_ZA |
| dc.publisher | Juta | en_ZA |
| dc.publisher.department | Department of Private Law | en_ZA |
| dc.publisher.faculty | Faculty of Law | en_ZA |
| dc.publisher.institution | University of Cape Town | |
| dc.source | Stellenbosch Law Review | |
| dc.source.uri | https://juta.co.za/products/3603-stellenbosch-law-review/ | |
| dc.title | The principle of reciprocity in continuous contracts like lease: what is and should be the role of the exceptio non adimpleti contractus (defence of the unfulfilled contract) | en_ZA |
| dc.type | Journal Article | en_ZA |
| uct.subject.keywords | exceptio non adimpleti contractus | en_ZA |
| uct.subject.keywords | withhold performance | en_ZA |
| uct.subject.keywords | reduction in rent | en_ZA |
| uct.subject.keywords | lease agreements | en_ZA |
| uct.subject.keywords | Ntshiqa v Andreas Supermarket | en_ZA |
| uct.type.filetype | Text | |
| uct.type.filetype | Image | |
| uct.type.publication | Research | en_ZA |
| uct.type.resource | Article | en_ZA |