LECTURE 9 MODERN AD HOC EXTENSION CONTRACT OF WORK- (LOCATIO CONDUCTIO OPERIS) AND CONTRACT OF SERVICES (LOCATIO CONDUCTIO OPERARUM)

Transcription

1 1 LECTURE 9 MODERN AD HOC EXTENSION CONTRACT OF WORK- (LOCATIO CONDUCTIO OPERIS) AND CONTRACT OF SERVICES (LOCATIO CONDUCTIO OPERARUM) STUDY (FOR CASES OF LOCATIO CONDUCTIO OPERIS): Lotz/Brand LAWSA Enrichment : pars & (former revised issue par 101 (p 66)) BK Tooling (edms) Bpk v Scope Prescision Engineering (Edms) Bpk SA 391(A) [discussed Casebook: Enrichment(3): 325; De Vos 1987: ] OR Daniel Visser Enrichment : De Vos 1987 :

2 2 Joubert DJ Afstanddoening van verryking 1989 (22) De Jure OPSIONAL READING (ON OPERIS CASES): Casebook: Enrichment(3): Hauman v Nortje 1914 AD 293 [discussed Casebook: Enrichment(3): 317] STUDY (FOR LOCATIO CONDUCTIO OPERARUM CASES): Lotz/Brand Enrichment : par 244 & (former revised issue pars (p 66)) Spencer v Gostelow 1920 AD 617, , [discussed Casebook: Enrichment(3): ] OPTIONAL READING Casebook: Enrichment(3): De Vos 1987: REMARK: In this particular learning unit two types of contracts will be dealt with, namely the contract of work (the so-called locatio conductio operis cases [also known as piece-job or mandate, where the locator operis solicids the production of the specified result of the labour of the conductor operis ]) and contract of service (the so-called locatio conductio operarum cases

3 3 [where the employee renders his personal services at the behest of the employer]). First of all it is important to determine how these contracts differ. Casebook: Enrichment(3) (pp ) treats the distinction satisfactorily by way of the locus classicus, Smit v Workmen s Compensation Commissioner SA 51(A). One of the most important indicia of these types of contracts is the presence of a right of control and supervision (the so-called control test). The organisation test is also applied, and more recently, the dominant impression test to assist with the distinction. Secondly, it is of the utmost importance to determine when the modern ad hoc extension of the traditional casuistic enrichment actions will be applied. Unjustified enrichment will only find application when either the conductor operis or the employee performed so materially defective or incomplete that the locator operis and employer refuses to accept the performance and cancels the agreement (whilst it is impossible to restore the defective or incomplete performance to the conductor operis or employee). Under these circumstances the resiliance from the contract ab initio extinguishes primarily all obligations in terms of the contract, leaving the guilty party in breach (the conductor operis) witha claim to compensation extending to the innocent party s enrichment at the time of the commencement of the action (not his damages in terms of the contract and consequently the contract price). Even though the innocent party still has contractual remedies, the guilty party in breach of contract suffered detriment sine causa excluding the contractual basis of liability of the locator operis and the employer. Take note, when the contract is not cancelled, either because the performance was not substantially defective or incomplete; the innocent partye chooses to do so (even though he could cancel the agreement), or prefers specific performance in terms of the contract, then enrichment does

4 4 not come into play, but rather the normal contractual remedies. In this case, the guilty party in breach has to rely on the contractual remedy (based on fairness) being created in the case of BK Tooling. In these cases the innocent party s reliance on the exceptio non adimpleti contractus (peculiar to reciprocal obligations) will be frustrated by the reduction in contract price remedying the defective performance. In these circumstances the onus is on the conductor operis (contractor) to prove: 1 the locator operis (commissioning party) accepted the defective performance and is using it; 2 circumstances existing which make it reasonable and fair for the court to exercise its discretion in his favour and allow for a reduced contract price; and 3 the cost of remedying the defective performance, that is the contract price less a deduction for the proper completion of the contract. The bona fides of the contractor is not a precondition to succeed with the fair contractual claim against the commissioning party. It is unclear whether the mental attitude of the contractor/employee would be a precondition whenever an enrichment claim ensues in cases of an unacceptable defective performance. It is submitted that it should not be a determinant, but rather whether the commissioning party/employer is enriched in circumstances which make it reasonable to expect of him to compensate the impoverished contractor/employee. ACTIVITIES 1 Distinguish the contracts for work and services in view of Smit v Workmen s Compensation Commissioner SA 51 (A) [For a solution, see Casebook Enrichment(3): ]

5 5 2 What is understood by the concept quantum meruit? Give two meanings of the concept and indicate whether it was correctly applied in the cases of Hauman v Nortje 1914 AD 293 and BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk SA 391(A). [2] [For a solution, see Casebook Enrichment(3): ] 3 A concluded a contract with B in terms of which B had to manufacture a fence round A s swimming-pool. B used his own materials to do the job. After the job had been completed A wasn t satisfied at all. The piece- job was certainly not done up to par. The material breach of the contract affected the contract to such an extent that A terminated the contract. B is of the opinion that he ought to be compensated for his material and labour expended. What advice would you offer B if A were 3.1 to cancel the contract, claim restitution and damages?[4] 3.2 to waive/reject enrichment? [1] 4 X concluded a contract with A in terms of which X s children could improve their learning skills. This course was supposed to be presented over a 12 week period. A trained the children for 4 weeks only and failed to continue due to his financial position. X cancelled the agreement and resiled from the contract. A contemplates suing X for a third of the contract price. Advise A and X. 5 A concluded a contract with B in terms of which B had to clean all the carpets in A s appartment. After the job had been completed A wasn t

6 6 satisfied at all. Even after B had done it all over again A complained bitterly. The piece-job was certainly not done up to par. The material breach of the contract affected the contract to such an extent that A couldn t be required to carry on with it What would you advise A to do? [2] 5.2 What advice would you offer B if A were to hold B to his contract, claim specific performance and/or claim damages for the breach? [3] to cancel the contract, claim restitution and damages? [4] to waive/reject enrichment? [1]