The legal nature of preference contracts
| dc.contributor.advisor | Lubbe, G. F. | en_ZA |
| dc.contributor.author | Naude, Tjakie | en_ZA |
| dc.contributor.other | Stellenbosch University. Faculty of Law. Department of Private Law. | en_ZA |
| dc.date.accessioned | 2012-08-27T11:35:34Z | |
| dc.date.available | 2012-08-27T11:35:34Z | |
| dc.date.issued | 2003-04 | en_ZA |
| dc.description | Thesis (LLD)--Stellenbosch University, 2003. | en_ZA |
| dc.description.abstract | ENGLISH ABSTRACT: The various constructions of rights of pre-emption encountered in South African case law all have some merit. This is confirmed by the multiplicity of types of preference contracts encountered in German law especially. The tendency of South African courts and writers to portray one approach as the only correct one to the exclusion of all other views, results in tension and confusion, all the more because of the failure to investigate the relevant policy considerations comprehensively. The confusion is compounded by what amounts to a breakdown of the system of precedents with judgments being based on incorrect interpretations of previous decisions and with scant regard for contrary decisions. No certainty exists regarding the construction of the contractual right of pre-emption in Roman and Roman-Dutch law, nor is it clear what figure or figures were received into South African law. The Germanic concept of tiered ownership that forms the historical basis for the Oryx remedy, does not form part of our law. This accounts for the difficulty that courts and writers have in explaining this remedy in terms of Romanist terminology, and the resort to the language of fiction. German law and English law, relied upon in South African case law, do not support a uniform construction of all rights of pre-emption as creating an enforceable duty to make an offer upon manifestation of a desire to sell. The almost unanimous support of US courts for a remedy by which the holder can ultimately obtain performance of the main contract upon conclusion of a contract with a third party, challenges the hypothesis suggested by German law that the default construction of preference contracts should be the bare preference contract which only creates a negative obligation. The very cryptic way in which rights of pre-emption are normally drafted, makes it difficult to even identify the main purpose of the parties. It is therefore not easy to classify preference contracts into the different types identified in this study as notional possibilities. A default regime is therefore highly desirable in the interest of legal certainty. The choice of a default regime should be made on the basis of recognised policy considerations, particularly on the basis of an equitable balancing of typical parties' interests and in view of communal interests balanced against the demand for legal certainty. The choice of default regime cannot be based merely on historical authority or precedent (which is in any event unclear in the present context) or unsubstantiated claims that one model is more logical or commercially useful than another. When rules are chosen as the default regime, these rules must, as far as possible, be reconciled with the existing conceptual structure of our law to prevent contradictions and inconsistencies. A policy analysis reveals that three default types of preference contract should be recognised, each with a clearly delineated field of application. Firstly, where the agreement allows the grantor to contract with a third party, the holder has the right to contract with the grantor at the terms agreed with the third party. Such a preference contract can therefore be regarded as an option conditional upon conclusion of a contract with a third party. Such contracts are rare in South Africa. In other cases, the default rule should be that the grantor must first give the holder an opportunity to contract before he contracts with a third party. The default construction of this latter type of preference contracts depends on whether the preference contract itself predetermines the main contract price. If so, the holder has a right or option to contract at that price upon any manifestation of a desire to conclude the relevant type of contract. However, where the preference contract does not predetermine the price, or refers to a price that the grantor would accept from third parties, any manifestation of a desire to sell should not be sufficient to trigger the holder's right. The grantor and society have an interest in having her freedom to negotiate with third parties to obtain the best possible price curtailed as little as possible. In such cases, the default rule should be that the holder is only entitled to conclusion of the main contract upon breach in the form of a contract with or offer to a third party. The default rule should also be that such preference contracts - which will be treated as ordinary preference contracts - only terminate upon the grantor actually contracting with and performing to a third party within a reasonable time after the holder declined the opportunity to match those terms, and provided the identity of the third party was disclosed to the holder on request. The holder therefore cannot lose his preferential right by a rejection of an outrageously high offer by the grantor. Options and preference contracts are closely related and overlapping concepts. The type of preference contract that grants a conditional right to contract can often be understood as a conditional option (or at least as a conditional option subject to a resolutive condition that the grantor does not want to contract anymore). The traditional distinction between options and rights of first refusal can only be maintained in respect of some types of preference contracts. These are negative or bare preference contracts which only give rise to remedies aimed at restoring the status quo ante the breach, as well as those preference contracts creating conditional rights to contract which courts refuse to treat as conditional options because their wording implies a duty to make or accept an offer, or because the requirement of certainty precludes them from being options. | en_ZA |
| dc.description.abstract | AFRIKAANSE OPSOMMING: Die verskillende konstruksies van voorkoopsregte aanvaar III Suid-Afrikaanse beslissings het almal meriete. Dit word bevestig deur die verskillende tipes voorkoopskontrakte wat veral in die Duitse reg erken word. Die neiging van Suid- Afrikaanse howe en skrywers om een benadering as die enigste korrekte een te tipeer veroorsaak spanning en onsekerheid, des te meer weens die versuim om die relevante beleidsoorwegings deeglik te ondersoek. Boonop is die presedentestelsel telkens verontagsaam deur verkeerde interpretasies van vorige uitsprake en deurdat teenstrydige uitsprake bloot geïgnoreer is. Geen sekerheid bestaan oor die konstruksie van die kontraktuele voorkoopsreg in die Romeinse of Romeins-Hollandse Reg nie. Dit is ook nie duidelik watter figuur of figure in die Suid-Afrikaanse reg geresipieer is nie. Die Germaanse konsep van gesplitste eiendomsreg wat die historiese basis van die Oryx-meganisme daarstel, vorm nie deel van ons reg nie. Dit verduidelik hoekom howe en skrywers sukkel om dié remedie te verduidelik aan die hand van Romanistiese verbintenisreg-terminologie, en die gevolglike gebruikmaking van fiksie-taal. Die Duitse en Engelse reg waarop gesteun is in Suid-Afrikaanse regspraak, steun nie 'n uniforme konstruksie van alle voorkoopsregte as behelsende 'n afdwingbare plig om 'n aanbod te maak by enige manifestasie van 'n begeerte om te verkoop nie. Die byna eenparige steun van Noord-Amerikaanse howe vir 'n remedie waarmee die voorkoopsreghouer uiteindelik prestasie van die substantiewe kontrak kan kry by sluiting van 'n kontrak met 'n derde, is 'n teenvoeter vir die hipotese gesuggereer deur die Duitse reg dat die verstekkonstruksie van voorkeurkontrakte behoort te wees dat slegs 'n negatiewe verpligting geskep word. Die kriptiese wyse waarop voorkeurkontrakte normaalweg opgestel word, maak dit moeilik om selfs die hoofdoelstelling van die partye te identifiseer. Dit is daarom nie maklik om voorkeurkontrakte te klassifisieer in die verskillende tipes wat in hierdie studie geïdentifiseer is nie. 'n Verstekregime is daarom wenslik in die belang van regsekerheid. Die keuse van verstekregime behoort gemaak te word op die basis van erkende beleidsoorwegings, spesifiek op die basis van 'n billike balansering van tipiese partybelange en in die lig van gemeenskapsbelange gebalanseer teen die vereiste van regsekerheid. Die keuse van verstekregime kan nie gebaseer word bloot op historiese gesag en vorige beslissings nie (wat in elk geval in die huidige konteks onduidelik is). Dit kan ook nie gebaseer word op ongemotiveerde aansprake dat een model meer logies of kommersieël bruikbaar as 'n ander is nie. Wanneer verstekreëls gekies word moet dit, sover moontlik, versoen word met die bestaande begrippe-struktuur van ons reg om teenstrydighede in die sisteem te vermy. 'n Beleidsanalise laat blyk dat drie verstektipes voorkeurkontrakte erken behoort te word, elk met 'n duidelik afgebakende toepassingsveld. Eerstens, waar die ooreenkoms toelaat dat die voorkeurreggewer eers met 'n derde party kontrakteer, het die voorkeurreghouer 'n opsie om te kontrakteer op die terme ooreengekom met die derde. Die voorkeurkontrak kan daarom beskou word as 'n opsie onderhewig aan die voorwaarde van sluiting van 'n kontrak met 'n derde. Sulke kontrakte is raar in Suid- Afrika. In ander gevalle behoort die verstekreël te wees dat die voorkeurreggewer eers die houer 'n geleentheid moet gee om te kontrakteer voordat sy met 'n derde 'n kontrak aangaan. Die verstekkonstruksie van hierdie laasgenoemde tipe voorkeurkontrak hang daarvan af of die voorkeurkontrak self die substantiewe kontraksprys vasstel. Indien wel het die houer die reg of opsie om te kontrakteer teen daardie prys by enige manifestasie van 'n begeerte om die spesifieke soort kontrak te sluit. Maar waar die voorkeurkontrak nie die prys vasstel nie, of verwys na 'n prys wat die gewer sou aanvaar van 'n derde, behoort enige manifestasie van 'n begeerte om te kontrakteer nie genoeg te wees om die houer se reg afdwingbaar te maak nie. Die voorkeurreggewer en die gemeenskap het 'n belang daarby dat die gewer se vryheid om met derdes te onderhandel so min as moontlik beperk word sodat sy die beste moontlike prys kan kry. In sulke gevalle behoort die verstekreël te wees dat die houer slegs geregtig is op die voordeel van die substantiewe kontrak by kontrakbreuk in die vorm van 'n kontrak met of aanbod aan 'n derde. Die verstekreël behoort ook te wees dat sulke voorkeurkontrakte in beginsel slegs beëindig word wanneer die voorkeurreggewer inderdaad kontrakteer met en presteer aan 'n derde binne 'n redelike tyd nadat die voorkeurreghouer die geleentheid gegee is om daardie terme te ewenaar. Dit behoort ook vereis te word dat die identiteit van die derde aan die houer geopenbaar word op sy versoek. Die houer kan dus nie sy voorkeurreg verloor deur nie-aanvaarding van 'n belaglik hoë aanbod deur die voorkeurreggewer nie. Opsies en voorkeurkontrakte is oorvleulende konsepte. Die tipe voorkeurkontrak wat 'n voorwaardelike reg om te kontrakteer verleen kan dikwels verstaan word as 'n voorwaardelike opsie (of minstens as 'n voorwaardelike opsie onderhewig aan 'n ontbindende voorwaarde dat die gewer glad nie meer wil kontrakteer nie). Die tradisionele onderskeid tussen opsies en voorkeurregte kan slegs behou word tov sommige voorkeurkontrakte. Hulle is die "negatiewe" voorkeurkontrakte, wat slegs aanleiding gee tot remedies gemik op herstel van die status quo ante kontrakbreuk sowel as daarde voorkeurkontrakte wat voorwaardelike regte om te kontrakteer skep wat howe weier om as voorwaardelike opsies te behandelomdat hulle bewoording wys op 'n plig om 'n aanbod te maak of te aanvaar, of omdat die vereiste van sekerheid hulle verhoed om opsies te wees. | af_ZA |
| dc.format.extent | xv, 428 pages | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/10019.1/53655 | |
| dc.language.iso | en_ZA | en_ZA |
| dc.publisher | Stellenbosch : Stellenbosch University | en_ZA |
| dc.rights.holder | Stellenbosch University | en_ZA |
| dc.subject | Contracts -- Germany | en_ZA |
| dc.subject | Contracts -- South Africa | en_ZA |
| dc.subject | Remedies (Law) -- Germany | en_ZA |
| dc.subject | Remedies (Law) -- South Africa | en_ZA |
| dc.subject | Pre-emption | en_ZA |
| dc.subject | Comparative law | en_ZA |
| dc.subject | Preference contracts | en_ZA |
| dc.title | The legal nature of preference contracts | en_ZA |
| dc.type | Thesis | en_ZA |
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