South African Contract Law Glossary

A genuine meeting of minds between contracting parties — the foundation of every valid contract. Both parties must intend to be legally bound and must agree on the same terms. Consensus is absent where there is mistake, misrepresentation, duress, or undue influence.

Formal default. A debtor is in mora when they have failed to perform on time and the creditor has placed them on notice (demand). Mora is required before interest can run on certain claims and before the creditor can cancel for late performance.

A cancellation clause in a contract that entitles one party to cancel the contract if the other party breaches a specified obligation. Also called a forfeiture clause. Must be expressly included in the contract — it is not implied by law.

A clause requiring that any amendment to the contract must be in writing and signed by both parties. Prevents informal oral or WhatsApp variations from overriding the written contract. Also called a Shifren clause after the leading case.

A clause stating that the written contract constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, and understandings. Prevents a party from relying on pre-contractual statements that are not in the written contract.

An irresistible force or unavoidable event beyond a party's control that makes performance impossible. At common law, vis major extinguishes the obligation to perform. Contractual force majeure clauses typically define which events qualify and what the consequences are.

The expiry of a legal claim after a specified period of inaction. Most contractual claims in South Africa prescribe after three years under the Prescription Act 68 of 1969. Once a claim has prescribed, the debtor can raise prescription as a complete defence.

A contract in which a surety (guarantor) undertakes to be liable for the debt or obligation of a principal debtor if the principal debtor fails to perform. Must be in writing and signed by the surety to be valid under the General Law Amendment Act 50 of 1956.

A contractual clause restricting a party (typically a former employee or seller of a business) from competing with the other party after the contract ends. Enforceable in South Africa if it protects a legitimate interest and is not broader than necessary — assessed using the Basson v Chilwan test.

A contractual obligation by one party to compensate the other for specified losses or liabilities. An indemnity clause typically shifts the risk of a particular type of loss from one party to the other, regardless of fault.

A contractual promise or guarantee about a fact, state of affairs, or future performance. Breach of a warranty entitles the innocent party to claim damages. Distinguished from a condition, which goes to the root of the contract and entitles the innocent party to cancel.

Latin for 'as is'. A clause in a sale agreement (typically property) that excludes the seller's liability for patent and latent defects. Under the Consumer Protection Act, voetstoots clauses are void in consumer transactions — sellers cannot contract out of the implied warranty against defects.

The legal standing or right to bring a claim before a court or tribunal. A party must have locus standi — a direct and substantial interest in the matter — to be heard. Also called standing.

A court order prohibiting a party from doing something (prohibitory interdict) or compelling them to do something (mandatory interdict). An urgent interdict can be obtained on short notice where there is an immediate threat of irreparable harm.

A court order compelling a party to perform their contractual obligations. The primary remedy in South African law for breach of contract — unlike English law, which treats damages as the primary remedy. Not available for personal service contracts.

Good morals or the legal convictions of the community. A contract that is contrary to boni mores is void for unlawfulness. Courts assess boni mores by reference to the values of the Constitution and the reasonable person standard.

Latin for 'hear the other side'. A fundamental principle of natural justice requiring that a party be given a fair opportunity to be heard before a decision is made against them. Applies in disciplinary proceedings, CCMA hearings, and administrative action.

The address nominated in a contract at which legal notices and court process may be served. Service at the domicilium is valid even if the party no longer resides or operates there. Every commercial contract should include a domicilium clause.