Emadyl Industries CC t/a Raydon Industries v Formex Industries (Pty) Ltd t/a Formex Engineering (1699/09) [2011] ZAECPEHC 58; 2012 (4) SA 29 (ECP) (20 December 2011)

Emadyl Industries CC t/a Raydon Industries v Formex Industries (Pty) Ltd t/a Formex Engineering (1699/09) [2011] ZAECPEHC 58; 2012 (4) SA 29 (ECP) (20 December 2011)

The court found that the defendant's instruction to halt production on 3 July 2008 constituted an unlawful repudiation of the contract. The evidence established that a firm agreement was concluded on 13 June 2008, binding the defendant to accept delivery and pay for the components and raw materials specified in the final release. The defendant failed to prove that the alleged trade usage formed part of the contract, as the evidence showed only a flexible industry guideline rather than a universally accepted custom. The defence of impossibility of performance was rejected, as the defendant accepted the risk by confirming the final release and inviting the plaintiff to provide figures for...

Citation
[2011] ZAECPEHC 58
Parties
Plaintiff: Emadyl Industries CC t/a Raydon Industries; Defendant: Formex Industries (Pty) Ltd t/a Formex Engineering
Court
Eastern Cape High Court, Port Elizabeth
Jurisdiction
South Africa
Judgment Date
20 December 2011
Case Number
1699/09
Procedural Posture
Civil Trial / Final Judgment After Trial
Outcome
Judgment for the plaintiff. Defendant found liable for damages arising from breach of contract.
Judges
J W Eksteen
Legal Topics
Breach of Contract, Repudiation, Trade Usage, Quantification of Damages, Impossibility of Performance
Commercial and Corporate Civil Procedure Breach of Contract Repudiation Trade Usage Quantification of Damages Impossibility of Performance

Case Brief

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Parties

Emadyl Industries CC t/a Raydon Industries

Plaintiff

Formex Industries (Pty) Ltd t/a Formex Engineering

Defendant

Procedural Posture

Civil Trial / Final Judgment After Trial

Legal Issues

  1. 1 Whether the defendant unlawfully repudiated the contract by instructing the plaintiff to halt production on 3 July 2008.
  2. 2 Whether the terms contended for by the defendant, including trade usage, formed part of the contract.
  3. 3 Whether the defence of impossibility of performance relieves the defendant from liability.

Ratio Decidendi

The court found that the defendant's instruction to halt production on 3 July 2008 constituted an unlawful repudiation of the contract. The evidence established that a firm agreement was concluded on 13 June 2008, binding the defendant to accept delivery and pay for the components and raw materials specified in the final release. The defendant failed to prove that the alleged trade usage formed part of the contract, as the evidence showed only a flexible industry guideline rather than a universally accepted custom. The defence of impossibility of performance was rejected, as the defendant accepted the risk by confirming the final release and inviting the plaintiff to provide figures for...

Court Disposition

Judgment for the plaintiff. Defendant found liable for damages arising from breach of contract.

Orders

  • The defendant is ordered, against delivery of all completed components and raw material, to pay the plaintiff the amount of R110,769.60 as damages.
  • Defendant is ordered to pay interest on the amount of R110,769.60 at the legal rate from fourteen days after the date of judgment to the date of payment.