Possibility of performance (7)

Question 1

Define Impossibility of performance?

Answer 1

Where performance in a contract is not possible, the contract is void. This means that the contract is of no legal effect. A void contract is not legally valid or enforceable at any time

Question 2

Types of impossibilities?

Answer 2

• Subjective impossibility
• Objective impossibility
• Factual and practical impossibility
• Legal impossibility
• initial impossible,
• Supervising impossible

Question 3

Subjective/relative impossibility is where?

Answer 3

a party to the contract is unable to perform. An example of subjective impossibility, is where a party does not have the money to pay for goods, as per the contract.

Question 4

Explain Objective impossibility?

Answer 4

Performance will only be impossible if, at the time of concluding the contract, it is objectively impossible to render the performance.
In order to test for objective impossibility, there must be an absolute physical impossibility to perform, on the part of any person.

Question 5

Examples of objective impossibility include?

Answer 5

• Delivery of a non-existent thing
• ‘Rex extra commercium doctrine’ in Roman law, providing that certain things are insusceptible to being traded; for example, selling a natural person
• Mandate to sell shares on the stock exchange that are not at all listed

Question 6

Explaib Factual and practical impossibility?

Answer 6

To illustrate factual and practical impossibility, consider the example of a contract for the sale of merchandise that has, subsequently, been lost at sea. Factual impossibility means that the object of the contract may still exist, and it is therefore not factually impossible to render performance.

Question 7

Themba is a breeder of Brahman cattle, an expensive type of cow. He has a farm in the Midlands, spanning many hectares. The farm has been in his family for many years, and he is the fifth generation of cattle breeders. When he is in Gauteng, he tries to sell his cattle to interested buyers.
He manages to sell a few of his prize cows, and specifically one of his most expensive prize bulls. Regarding the prize bull, the parties sign the contract of sale for a ‘one-year-old bull’. However, Themba is unaware that his one-year-old prize bull was run over by a truck on the morning before the contract of sale was entered into.
Required:
Advise Themba on the legal status of his contract, with regard to possibility of performance?

Answer 7

Performance will only be impossible, if at the time of concluding the contract, it is objectively impossible to render the performance. In order to test for objective impossibility, there must be an absolute physical impossibility to perform. A performance that is rendered physically impossible, may be rendered objectively impossible, if insistence on its performance would be unreasonable in the circumstances.

Question 8

Sizwe lives a short distance from the centre of town. Across the road from his house, there are two hectares of vacant land. His friend, Jabu, is the owner of this land. Jabu intends to build a house, and only requires one hectare of the land to build. Sizwe hears about this, and decides to offer Jabu R 1 million for one hectare of the land. The land would therefore have to be subdivided. Jabu agrees to the amount, and the fact that the land would have to be subdivided. They enter into an agreement for the sale of the land. When the time arrives for Jabu to subdivide the land, he has to make an application to his local municipality for approval to subdivide. He receives a response from the municipality, to say that, in terms of the municipal by-law, the subdivision of this piece of land cannot be done.
Required:
Advise Jabu and Sizwe how this affects their contract, if at all?

Answer 8

In order for a contract to be valid, performance must be lawful. If performance is prohibited by law, the inability to perform may be treated as an instance of objective impossibility or illegality. Where a contract contravenes the law, then it is illegal and impossible.

Question 9

Give a scenario of Subjective/objective impossibility?

Answer 9

Faizel and Kara enter into a contract. Faizel agrees to sell Kara a hot pink scooter for R 20 000. He only has classic white scooters in stock

Question 10

Explain a scenario of Factual/practical impossibility

Answer 10

Jen imports gemstones from an overseas country. Her order is delivered by ship, as this is the most affordable means of transporting goods. She urgently awaits the delivery of rose quartz crystals. She does not receive the shipment of gemstones, and is informed that the shipment in fact fell off the ship. They have located the exact area where the shipment can be found at the bottom of the ocean.

Question 11

Explain Legal impossibility?

Answer 11

X and Y enter into a contract, whereby X will sell exotic lizards to Y. Y owns a pet shop and intends to sell these lizards to her clients, as she has a large clientele for exotic reptiles. On conclusion of the contract and upon further inspection of the lizards, Y realises that these are in fact dragon-like lizards, and are illegal to trade in South Africa.

Question 12

Explain Initial impossibility of performance?

Answer 12

Initial impossibility exists where performance of the contractual obligations are not possible, at the time of contract conclusion. The contract is therefore void, and no contractual obligations arise between the parties.

Question 13

Explain Supervening impossibility of performance?

Answer 13

In terms of supervening impossibility, performance is possible at the time of conclusion of the contract. Subsequently, however, performance becomes objectively impossible. It is this supervening impossibility of performance that may lead to the termination of a contract, provided that neither party is at fault. In this event, the contract will be considered void, and the reciprocal obligations of the parties to the contract are discharged.

Question 14

The requirements for supervening impossibility of performance: Objectively Impossible + Possibility unavoidable by a reasonable person =

Answer 14

Supervening impossibility of performance

Question 15

The cause of a supervening impossibility of performance may be due to the following?

Answer 15

• vis major; or
• casus fortuitus.

Question 16

Define Vis major, or superior force?

Answer 16

is some force, power or agency which cannot be resisted or controlled by the ordinary individual. The term is now used as including not only the acts of nature, vis divina, or ‘act of God’, but also the acts of man.

Question 17

Define Casus fortuitus?

Answer 17

Casus fortuitus, which is a species of vis maior, is a term well understood and needing no formal definition. It includes all direct acts of nature, the violence of which could not reasonably have been foreseen or guarded against.

Question 18

Larry and Jill enter into a contract to sell exotic animals in South Africa, but the sale of these exotic animals is
prohibited by law. What type of impossibility is this?

Answer 18

Legal impossibility

Question 19

Patricia agrees to deliver an original painting to Thando.
Unknown to the parties, the painting is destroyed in a
fire. What type of impossibility is this?

Answer 19

Objective impossibility

Question 20

Tina makes handbags. She agrees to deliver 500 handbags to Woolworths in return for the purchase price. When it is time for delivery, she realises that she is out of stock of the handbags that Woolworths has already paid for. What type of impossibility is this?

Answer 20

Subjective impossibility

Question 21

What are the requirements for supervening impossibility?

Answer 21

Objectively impossible and the impossibility is unavoidable by a reasonable person

Question 22

A plane carrying 400 pairs of shoes ordered by Mohammed
crashes into the side of Mount Everest. It is possible to
retrieve the shoes but it would require a costly team of
experienced climbers. What type of impossibility is this?

Answer 22

Practical impossibility

Question 23

Prevention of performance entails that?

Answer 23

Prevention of performance entails that a party to a contract has performed an act, or omitted to act, which results in the performance becoming impossible. The impossibility of performance arises due to the fault of one of the parties. Prevention of performance therefore results in a breach of contract.

Question 24

While supervening impossibility of performance terminates a contract, rendering performance impossible does not. The debtor?

Answer 24

remains bound, in terms of the contract, as their act or omission has led to a breach of the contract.

Question 25

Sbu owns a popular sports bar in Sandton. The bar has recently undergone extensive renovations, in order to accommodate more patrons. Sbu has had to purchase ten new pool tables and a new music system that can be heard throughout the bar area. He has also ordered five new TV sets from TV Bizzare. He has found that his customers enjoy watching the local sports every Saturday evening. The day before the sets are to be delivered, the premises of TV Bizzare are flooded, during a heavy downpour, and all the TV sets are damaged beyond repair.
Required:
Taking the circumstances into account, discuss the legal position of the contract concluded between Sbu and TV Bizarre, for the purchase of the five TV sets.

Answer 25


In terms of supervening impossibility, performance is possible, at the time of conclusion of the contract. Subsequently, however, performance becomes objectively impossible. It is this supervening impossibility of performance that may lead to the termination of a contract, provided that neither party is at fault. In this event, the contract will be considered void and the reciprocal obligations of the parties to the contract are discharged. This is an example of a vis major, namely, an act of God (floods).

Question 26

Shalene agrees to sell a second-hand motor vehicle to David, for R 25 000. Both parties agree that Shalene will put new tyres on the car, have the car valeted, and do certain other minor repairs. Payment of the purchase price will be made via EFT, when David calls to collect the vehicle, at the end of the week. Later that day, when Shalene takes the car across town to have the new tyres put on, she negligently collides with a bus, and the car is damaged beyond repair. Shalene argues that the contract they concluded is still in force, regardless of her negligent driving, and demands payment from David.
Required:
Discuss this scenario and identify the correct legal position.

Answer 26

Prevention of performance entails that a party to a contract has performed an act, or omitted to act, which results in the performance becoming impossible. The impossibility of performance arises due to the fault of one of the parties. Prevention of performance therefore results in a breach of contract. The debtor remains bound in terms of the contract, as their act or omission has led to a breach of the contract. In this event, specific performance cannot be claimed. However, a claim for damages and/or cancellation of the contract could be instituted against the defaulting party.

Question 27

Explain the court’s decision. (Sbu owns a popular sports bar in Sandton. The bar has recently undergone extensive renovations, in order to accommodate more patrons. Sbu has had to purchase ten new pool tables and a new music system that can be heard throughout the bar area. He has also ordered five new TV sets from TV Bizzare. He has found that his customers enjoy watching the local sports every Saturday evening. The day before the sets are to be delivered, the premises of TV Bizzare are flooded, during a heavy downpour, and all the TV sets are damaged beyond repair.)

Answer 27

• Whether or not vis major had taken place.
• Cigarettes held at a custom and excise warehouse were stolen during an armed robbery. Because of the armed robbery, a dispute was lodged with SARS, and because of this vis major event, a full rebate should be granted.
• It was held that a vis major had taken place.

Question 28

Ellen and Adam enter into a contract to buy and sell Adam’s house. Ellen pays him the purchase price. Later that day Adam sets fire to his house in order to claim the insurance money as well. He then claims that performance is impossible and he no longer has to perform in terms of the contract. What type of impossibility is this?

Answer 28

Rendering performance impossible

Question 29

What consequence arises when the content of a contract is vague or ambiguous?

Answer 29

No obligations arise for either party

Question 30

Ellen and Adam enter into a contract to buy and sell Adam’s house. Ellen pays him the purchase price. Later that day Adam sets fire to his house in order to claim the insurance money as well. He then claims that performance is impossible and he no longer has to perform in terms of the contract. What remedy is available to Ellen?

Answer 30

Damages and/or cancellation

Question 31

What is an alternative obligation?

Answer 31

Creditor may only claim the performance that was chosen by the entitled party

Question 32

In terms of a contract, the seller must deliver a cow called Annabel to the purchaser but she may also choose to deliver the cow Bluebell instead. The contract further states that the purchaser may only claim performance of the cow Annabel. What type of obligation is this?

Answer 32

Facultative obligation

Question 33

Explain Determined and determinable performance?

Answer 33

Where the content of a contractual obligation is ambiguous, or cannot be determined, no obligation will arise. Performance in terms of such a contract is, therefore, not determined, or ascertainable. Performance may be determined, for example, if the parties expressly mention the performance in their agreement.

Question 34

Define Facultative obligation?

Answer 34

With this type of obligation, the performance required of the debtor is specified, but the debtor is entitled to render a different specified performance, should they choose to do so.

Question 35

Define The alternative obligation (performance of choice)?

Answer 35

An alternative obligation is concluded where the parties to the contract agree that either may choose the performance, from two or more different alternatives.

Question 36

Define Generic obligation?

Answer 36

The generic obligation requires performance to be determined, by selecting a specified genus of commodity, in terms of number, mass or measure.
The parties to the contract should determine these specifications, failing which the debtor’s specifications shall apply.

Question 37

Building Enterprises is a large, popular building wholesaler. They are best known for affordable prices and excellent service. Mani, the owner of Building Enterprises, prides himself on the superior quality of his products. Mani recently enters into a contract with Gold Sand Enterprises, to purchase 2 000 20 kg bags of aggregate, to be used by his clients, who are contractors, to make cement.
Required:
Explain to Mani what type(s) of obligation has been created.

Answer 37

This is an example of a generic obligation. The generic obligation requires performance to be determined, by selecting a specified genus of commodity, in terms of number, mass or measure. The parties to the contract should determine these specifications, failing which the debtor’s specifications shall apply.

Question 38

Explain what is meant by ‘facultative obligation’ and ‘alternative obligation’, by referring to examples. Then, identify the differences between the two obligations.

Answer 38

With a ‘facultative obligation’, the performance required of the debtor is specified, but the debtor is entitled to render a different specified performance, should they choose to do so.

For example, an art gallery is hosting an exhibition, and they have sourced painters from all over South Africa. The art gallery requires Jerry to deliver his painting titled Walk Free, but Jerry may choose to deliver his painting titled Save the Earth, instead. Jerald delivers Save the Earth to the exhibition centre.

An ‘alternative obligation’, on the other hand, is concluded where the parties to the contract agree that either may choose the performance, from two or more different alternatives.

For example, Henry wants to buy one horse from Fairy Valley Horse Farm. He has seen horses that he is interested in – Blue Shadow and Midnight. He concludes the contract with Fairy Valley Horse Farm. In the contract, Fairy Valley Horse Farm has the right to decide which horse Henry may purchase. This gives the seller the right of selection. Thus, if the seller decides to deliver Blue Shadow to Henry, Henry only has a claim to demand the delivery of Blue Shadow, and not to demand the other horse, Midnight.

The difference between the two obligations: On the face of it, facultative and alternative obligations might seem similar, but the main difference arises in their enforceability. With a facultative obligation, the art gallery can only claim the first identified painting, namely, Walk Free. However, with an alternative obligation, Henry may claim performance of whichever horse Fairy Valley Horse Farm chooses.

Question 39

Contractual obligations three sub-divisions?

Answer 39

• Factual obligation
• Alternative obligation
• ## Generic obligation

Question 40

Do qustions in the self assessment: unite 7