When disputes arise, individuals and businesses often turn to the courts to assert, defend, or
enforce their rights. But where do these rights come from?
Rights generally stem from three main sources: (1) rights granted by the State (such as the
bill of rights in the Constitution or specific legislation); (2) rights developed through common
law (principles developed over time and shaped by past judgements); and (3) rights granted
by contract (agreements between parties).
If you’re party to a contract, your rights under that agreement can typically be enforced
through contract law. However, there are situations where a breach of contract can give rise
to two types of claims:
a contractual claim for damages arising from the breach; and
a delictual claim (under common law) for compensation based on harm caused by wrongful conduct.
This raises a critical question: Can you pursue both claims simultaneously? Or are you
limited to one? Unfortunately, South African courts have not provided a definitive answer.
However, some cases offer useful guidance.
In the case of Trio Engineered Products Inc v Pilot Crushtec International (Pty) Ltd the court
said that there is no one-size-fits-all formula for determining when contractual and delictual
claims can coexist:
"… the law in this area has sought to demarcate a middle ground between two
unappealing positions. The first position is that every breach of contract is an
actionable delict. This is unsustainable since it would collapse any distinction
between duties in contract and delict, which duties have distinct foundations and
justifications. The second is that the breach of contract excludes an actionable delict.
Such a position would unwarrantably leave uncompensated all persons who may
have been harmed by a breach of contract but are not in privity of contract with the
party in breach. Inevitably, then, our law seeks to navigate the territory between
these two positions to determine which breaches of contract may also give rise to an
actionable delict.” (Unterhalter J)
Unterhalter J sought to provide clarity and context in this “middle ground” of coexisting
contractual and delictual claims, by synthesising principles extracted from two judgments -
Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd and Country Cloud
Trading CC v MEC, Department of Infrastructure Development, Gauteng. From Lillicrap, he
used the principle that for a contractual breach and delictual breach to co-exist, it must be
proven that the delictual claim would still stand, even if the contractual breach had not been
committed (i.e. the delictual claim must exist independently of the breach of contract). From
Country Cloud, he used the principle that courts should be cautious of extending the law of
delict where the parties have chosen to regulate their relationship by way of contract.
In fusing the principles arising from these judgments Unterhalter J summarised the position
as follows:
A breach of contract is not automatically a delict.
Where parties choose to regulate their relationship through contract, this will not ordinarily grant a right in delict.
Independent or complementary delictual duties may exist, but must be carefully assessed.
Courts must be cautious when allowing third parties to claim damages based on a breach of contract.
This approach was affirmed in reported cases such as Simply Africa Trading v Securitas
Technology (Pty) Ltd and Devland Cash and Carry (Pty) Ltd v G4S Cash Solutions SA (Pty)
Ltd, wherein the courts held that once parties have chosen to regulate their relationship
through contract, they will ordinarily exclude additional liability in delict.
If you are negotiating an agreement, you should consider the merits and demerits of
allowing/disallowing delictual remedies and ask your legal counsel whether your contract
should specifically disallow or allow for delictual claims to flow from the contract.
If you are considering legal action, it’s important to bear in mind the following:
courts prefer that disputes governed by a contract are resolved under contract law.
a delictual claim may only be considered if it exists independently of the contract; even then, courts may reject delictual claims if the contractual framework adequately addresses the parties’ rights and obligations.
In summary, while it is theoretically possible to bring both contractual and delictual claims,
South African courts lean towards limiting claims to the contractual sphere when a contract
governs the relationship.
