The role of implicit contract terms as a determinant of contractual consequences

Bailly, Chantal (2005-12)

Thesis (LLM)--University of Stellenbosch, 2005.

Thesis

ENGLISH ABSTRACT: It is clear that the classical concept of contract suffers from weaknesses because it takes too little account of social and economic changes that have occurred in our highly competitive global climate. More particularly, it fails to acknowledge implicit dimensions of contract. The classical contract theory was designed for transactions rather than to regulate relations. In view of the relational contract theory, contracts are agreements, often developed gradually, over a period of time and last over a period of time, perhaps indefinitely. As illustrated, with a discussion of the various theories attempting to qualify the classical law, the development of the relational contract theory and the need for implicit dimensions is in line with changes in business, market transactions and the economic and social environment of today. The relational contract is gradual and emphasises the relationship between the parties. Focus is placed on their understandings, party practices, customs and expectations as opposed to formal doctrines and principles. Characteristically, relational contracts are often incomplete in their specifications, thus leaving room for the creation of expectations and understandings inter partes. These expectations and understandings along with co-operation, rationality and trust are the implicit dimensions, which reflect the shared interest the parties have in their transaction. The ways in which these implicit dimensions can be recognised, developed and applied to contracts, particularly in the South African context is considered in light of our law's treatment of the implication of terms into contracts. It was found that considerations of reasonable expectations and policy do playa role in our law, albeit not to such an extent as to meet the demands of the relational contract theory and the recognition of implicit dimensions. Existing contract principles are also evaluated in the light of the relational contract and implicit dimensions. It is not suggested that classical contract law doctrines are to be dispensed with but that a shift of focus should occur, from the traditional focus on the ''paper'' deal to focusing on the ''real'' deal, between the parties. It is concluded that a principle of good faith would be a suitable starting point to give cognisance to implicit dimensions and to regulate relational contracts. In recognising a principle of good faith, the courts will be able to better respond to the expectations of the parties. A principle of good faith is recommended as being advantageous towards developing a pre-contractual duty of disclosure and encouraging more co-operative thinking and dealing in both legal doctrine and contracting practice.

AFRIKAANSE OPSOMMING: Dit is vandag duidelik dat die klassieke kontraksmodel aan swakhede ly omrede dié model nie genoegsaam rekening hou met sosiale en ekonomiese veranderinge mons hoogskompeterende wêreldklimaat nie. Meer bepaald, neem die model nie die implisiete aspekte van kontrakte in ag nie. Die klassieke teorie is meer gepas vir eenmalige transakies tussen kontraktante en nie soseer gebruik vir die regulering van deurlopende kontraksverhoudinge nie. In terme van die verhoudingskontrakteorie ("relational contract theory") word kontrakte beskou as ooreenkomstes wat geleidelik, oor 'n lang tydperk kan duur, miskien selfs vir 'n onbepaalde tydperk. Soos gei1lustreer, is daar verskeie teoriëe wat poog om die bestaande klassieke benadering aan te pas. Die ontwikkeling van die verhoudingskontrakteorie en die implisiete aspekte van kontrakte korreleer met veranderinge in internasionale handel en die ekonomiese en sosiale omgewing van vandag. Die verhoudingskontrakteorie beklemtoon die verhouding tussen die partye, hul praktyke en gewoontes en verwagtinge en is nie net slegs op formele beginsels gebaseer nie. 'n Eienskap van hierdie kontraktstipe is dat hulle dikwels nie poog om die verhouding van die partye volledig te reguleer nie. Sodoende word ruimte gelaat vir die ontwikkeling van verwagtinge en implisiete verwagtinge tussen die partye. Hierdie verwagtinge en verstandhoudings te same met die beginsels van samewerking, redelikheid en onderlinge vertroue, is die implisiete aspekte wat die gemeenskaplike belang wat partye in hul verhouding het, weerspieël. Maniere om hierdie implisiete aspekte te herken, te ontwikkel en toe te pas, veral in die Suid- Afrikaanse konteks, is oorweeg in die lig van ons reg se benadering tot die inlees van onuitgesproke bedinge in kontrakte. Alhoewel daar bevind is dat redelike verwagtinge en beleid wel 'n rol speel, is dit onvoldoende in die lig van die eise van die verhoudingskontrakteorie en die behoefte aan implisiete aspekte. Bestaande kontraksbeginsels is ook geëvalueer in die lig van die verhoudingsgebaseerde kontrak en implisiete aspekte. Daar word nie gesuggereer dat klassieke beginsels van die hand gewys moet word nie. Eerder dan die tradisionele fokus op die "paper deal" moet die fokus op die"real deal" wees. Ten slotte word die behoefte aan die erkenning van 'n beginsel van goeie trou uitgelig. Breedweg sal howe beter kan reaggeer op partye se verwagtinge en verstandhoudinge en dié beginsel word ook aanbeveel met die oog op die behoefte aan samwerking tussen partye en die ontwikkeling van 'n voor-openbaarmakingsplig.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/50520
This item appears in the following collections: