TYPES OF BREACH OF CONTRACT

Study Notes

Breach of contract occurs when one party fails to fulfill their obligations, resulting in a desired outcome not being achieved.
Five forms of breach of contract:
- Mora debitoris (debtor's failure to perform on time)
- Mora creditoris (creditor's failure to accept proper performance)
- Repudiation (debtor's notice of non-compliance)
- Rendering performance impossible (one party makes performance impossible)
- Positive mal-performance (debtor's defective or incomplete performance)

Performance (natural termination by fulfillment)
Prescription (extinction of debt after a prescribed period)
- 30 years - mortgage bond debts
- 15 years - debts due to the State
- 6 years - notarial contracts
- 3 years - any debt not included above
Set-off (weighing up debts against each other)
Merger (convergence of debtor and creditor capacities)
Agreement (mutual termination by parties)
Insolvency (not necessarily termination of contract, trustee must administer insolvent estate)
Supervening impossibility of performance (objective impossibility due to vis major or casus fortuitus)
Death (does not normally terminate a contract, rights and duties pass to the deceased estate)

In community of property (joint ownership of assets, divided equally in divorce)
Out of community of property (separate ownership of assets, no sharing in divorce)
Out of community of property with the accrual system (each party's estate growth is calculated, and the party with more growth must pay half the difference to the other party)

Calculations for divorce settlement:
- In community of property: R2,400,000 / 2 = R1,200,000 each
- Out of community of property: Mr. Smith - R2,000,000, Mrs. Smith - R400,000
- Out of community of property with the accrual system: Mr. Smith's growth - R1,700,000, Mrs. Smith's growth - R300,000, difference - R1,400,000, Mr. Smith must pay R700,000 to Mrs. Smith (R1,400,000 / 2)