A critical legal argument for contractual justice in the South African law of contract

Abstract

Apparently the existence of deepgoing antinomies in our system of contracts is an experience too painful to rise to the full level of our consciousnes. In the current transformative milieu, the South African law of contract continues its attempts to convey an image of contract as a coherent system of clear and neutral rules. These attempts stem from the belief that the rule-book, in and of itself, can offer us determinate answers in all contractual disputes. This study was borne out of a concern that in its commitments to sustain this image, the South African law of contract is not sufficiently concerned with transformation and the ideal of justice. In the seventies, Kennedy exposed the ambivalence of the contract system and argued that private law vividly reflected the fundamental contradiction; the irresolvable tension in and among us between acting purely out of self-interest or allowing our actions to be informed, influenced and curtailed by others. Kennedy asserted that the fundamental contradiction could be construed as a continuum with two opposing ‘ideal typical’ positions on both the level of form and substance. On the substance level he referred to this warring engagement as individualism and altruism. On the form level, the ideal typical commitments prefer law either in the form of rules or as open-ended standards. Kennedy’s most provocative claim was that individualism preferred law in the form of rules whereas altruism favoured the open-ended standard form. This claim reflected the understanding that form and substance are interdependent because it is impossible not to ask: ‘Form of what?’ Dalton later added more explicitly that form and substance would politically always generate a hierarchy within a legal system. Following Kennedy, this study engages with the South African law of contract in a similar way. It argues that the South African law of contract not only reflects the fundamental contradiction profoundly, but also privileges and works to sustain the individualism/rule position. This position is not sufficiently concerned with the ethical element of contract (good faith) and with the ideal of contractual justice. I consider whether and how the transition from a totalitarian state to a constitutional democracy affected this hierarchy. I arrive at disappointing but nevertheless hopeful conclusions in the sense that the bias inculcated in the law of contract cannot take anything away from the fact that it operates in the penumbra of a Constitution which is committed to openness, equality, dignity and freedom in all human relationships, including those of a contractual nature. In resisting the traditional representations of contract and in support of the above, I propose a re-emphasis on good faith as the ethical element of contract. Good faith cannot be contained in a neat and tidy legal definition. It realises that we are, in the community of contracting persons, each responsible for the other’s well-being and that we should ultimately remain concerned with the constitutive values of the supreme law under which the subordinated but indispensable law of contract must continue to operate. The difficulty and complexity of this exercise provides no alibi. Copyright 2005, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Barnard, AJ 2005, A critical legal argument for contractual justice in the South African law of contract, LLD thesis, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-06192006-083839/ >