Abstract

Parties generally enter into contractual relations with the sincere intention to fulfil all the obligations created in terms of their contract. However, for various reasons, parties sometimes do not comply with the terms of their contract. Where a party fails or refuses to perform their obligations as specified in their contract, that party commits breach of contract and the normal consequences for breach then ensue. One of these consequences is that the injured party may institute a claim for damages.

The nature of this remedy has been called into question. Is a claim for damages due to breach of contract derived from the contractual relationship between the parties, or is it no more than a delictual claim presented under the guise of contract? The fundamental values underlying the law of contract are consensus and reliance, as well as freedom of contract, sanctity of contract (pacta sunt servanda), good faith and privity of contract.

Freedom of contract and sanctity of contract demand that contracts that are freely entered into must be honoured and enforced. From this arises the principle that breach of contract occurs even if the failure or refusal to abide by the contract cannot be attributed to fault in the sense of a wilful disregard of the contract or a negligent failure to abide by the contract. This is in stark contrast with delict, where fault is generally required for liability. Furthermore, reliance and good faith also demand that the parties should honour their obligations in terms of the contract. This relationship based on reliance and good faith is broken when breach occurs, with the result that there is a need to provide redress to the injured party that can be derived from the contractual relationship. Lastly, privity of contract generally limits the effects of the contract, as well as the resultant rights and duties in terms of the contract, to the parties who contracted with each other. There is no such closed notion of privity in delict.

The article aims to explore the law of contract from a historical perspective and from a comparative analysis of various jurisdictions today to determine the nature of the claim for damages due to breach of contract. It concludes that there are fundamental differences between a claim for damages due to breach and a claim for damages due to the wrongful and culpable conduct of a third party. As a result, it is clear that the claim for damages due to breach of contract is a claim ex contractu that must be distinguished from delictual claims.