During the international pandemic called Covid-19 the risk of being unable to pay your rental could be apparent. When this occurs it is helpful to know your legal rights in this regard.
W E Cooper Landlord and Tenant 2 ed (1994) at 201 defines vis major as: “a superior power or force which cannot be resisted or controlled”. A vis major is, therefore, an unforeseen happening or circumstances out of the control of the party to the contract which renders the performance of his/her obligations objectively impossible.
In South African law two separate doctrines exist:
1) Force Majeure; or
2) Supervening impossibility.
Force Majeure comes into operation in terms of the contractual law. Most lease agreements contain a clause of Force Majeure that regulates the manner on which instances of a vis major should be dealt with. The most common rule applicable is that the impossibility of performance (caused by vis major) must be objectively impossible and not merely an inconvenience which will be caused should performance take place.
The parties are obliged to rely on the provisions of the specific lease agreement dealing with Force Majeure in the applicable lease agreement.
In the absence of such a Force Majeure clause one will have to rely on the common law doctrine of Supervening Impossibility. The general rule is that if a situation arises, which is out of the control of the parties and without any fault on either side, which renders performance impossible, such party is excused from his/her failure to perform.
Performance in terms of the agreement must be objectively impossible, however, factual impossibility is not a requirement. All though performance might still be factually possible, it will be regarded as being objectively impossible should it be illegal or so burdensome that it cannot reasonably be expected from the party to perform.
The Supreme Court of Appeal in Transnet Ltd t/a National Ports Authority v Owner of MV Snow Crystal held that “in order to determine whether the doctrine applies, it is necessary to look at factors such as the nature of the contract, the relationship of the parties, the circumstances of the case and the nature of the impossibility”. Accordingly, in establishing whether a party would be able to rely on the defence of supervening impossibility in an instance where such party is unable to perform as a result of the COVID-19 virus outbreak, one must take into account all surrounding circumstances of
that particular matter.
In conclusion, should a contracting party fail to perform in terms of the contract it would be advisable to contact a legal practitioner for assistance in determining whether one can rely on Force Majeure or the doctrine of Supervening impossibility in the absence of a Force Majeure clause in the applicable agreement.
Contact us today for assistance on (012) 993 5907, Chantel@cvhattorneys.co.za
Jaques van den Ende