The Constitution and Contract Law – Business must embrace inconsistency and uncertainty
Trustees for the Time Being of the Oregon Trust v BEADICA 231 CC and Others
On 28 March 2019, the Supreme Court of Appeal of South Africa (“SCA”) handed down a seminal decision in Trustees for the Time Being of the Oregon Trust v BEADICA 231 CC and Others (“Oregon Trust Decision”) relating to the impact of The Constitution of the Republic of South Africa (“Constitution”) on the law of contract.
Why is this decision important?
In 2016, Judge Malcolm Wallis (currently a Judge of the Supreme Court of Appeal of South Africa) said, in a private speech, “There is a view abroad, among both academics and legal practitioners, that certain decisions by the Constitutional Court of South Africa impacting commercial life of the country have introduced uncertainty in our commercial law.” He sounded a warning that the effect of such uncertainty will be to drive commercial litigation away from the Courts into arbitral forums that are seen as more predictable in their outcomes and therefore deprive the country the much-needed constitutional-contractual law jurisprudence.
Since then, academics, sitting and retired Judges have written extensively on the impact of the Constitution on the law of contract. Whilst the SCA have been trenchantly criticised for its conservatism and reticence to infuse contract law with the principles in the Constitution, The Constitutional Court of South Africa (“Constitutional Court“) have been criticised for introducing uncertainty in the law of contract.