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Jacob Mutevedzi and Natasha Ncube 

Often times in our day to day dealings, whenever an exchange of value occurs between two persons, a contract is spawned. So embedded is this mercantile agreement in our daily affairs that, frequently, people conclude contracts without even realising it. From purchasing zumbani at your local supermarket to buying airtime on your mobile banking application, you are concluding contracts.

Whether verbal or written, if the essential elements of a valid contract are present these contracts are enforceable and give rise to valid contractual relationships, although the verbal contract is often more difficult to prove.

To establish the validity of a contract a number of elements must be present. There must be an offer made by one party which is, in turn, accepted by another party, and then, in most cases goods and/or services must be exchanged between the two.

Further, the business of the contract should be lawful and it must have been concluded by individuals with the capacity to enter into a contract.

There are two more elements, which focus on the state of mind of the parties, namely, that there must be a clear and unequivocal intention to enter into the contract and create a binding legal relationship (this is known as animus contrahendi) and this intention must reflect through a meeting of the minds (known as consensus ad idem). Lastly, the contractual obligations must be possible of performance.

This last element is the focus of this article.

The Covid-19 pandemic was confirmed to have arrived on our shores in or around March 2020. The impact of this highly contagious virus has forced people to adapt to a new normal.

It has also affected existing contractual agreements with many a party claiming that performance is no longer possible.

Measures taken by authorities to combat this virus such as national lockdowns, social distancing and the curtailment of working hours, have greatly constrained and, in some cases, restricted performance of contractual obligations.

Therefore, it is important, more than ever, to understand one’s rights under contract law when such circumstances arise.

The common law doctrine of “supervening impossibility” provides that if a situation arises without any act or fault of either of the parties to the agreement which renders the performance of a contractual obligation by one of the parties impossible, that party is excused from their non-performance. In modern times, rather than rely on the common law concept of supervening impossibility, parties specifically regulate the consequences of force majeure by including specific force majeure provisions in their contracts.

If there is no force majeure clause in a contract, the common law doctrine of “supervening impossibility” applies by default.

Force majeure is a French term, which refers to circumstances beyond the control of parties to a contract that make performance of contractual obligations impossible. It has been variously referred to as “vis major” or “casus fortuitous.”

A force majeure provision will usually contain a non-exhaustive list of events that the parties agree to treat as force majeure.

For example, war, pandemics, lockdowns, unforeseen acts of God such as hurricanes and acts of governments and other regulatory authorities. Covid 19 is arguably one such event of force majeure.

Normally, a force majeure clause allows a party to suspend the performance of their obligations for as long as the force majeure persists or for a set period of time – whichever is shorter.

By including properly constructed force majeure clauses in their contracts, parties manage their risk when the other party cannot perform and limit their own liability for failure to perform.

Ordinarily, when one fails to perform their contractual obligations, they are considered to be in breach of contract and the other party has a raft of remedies available to them.

The offended party may sue for specific performance; a remedy which forces the defaulting party to perform. Alternatively, the injured party may treat the contract as cancelled and claim damages.

The primary purpose of both a force majeure clause and the doctrine of supervening impossibility is to excuse the failure of a party to perform its obligations as a result of an event of force majeure. This insulates the defaulting party from the usual consequences of breach of contract.

In Firstel Cellular (Pvt) Ltd v NetOne Cellular (Pvt) Ltd (2015) ZWSC 1 the Supreme Court emphasised that the suspension of a contractual obligation on the basis of force majeure can only be allowed in very compelling circumstances. The courts will consider the nature of the contract, the relationship between the parties,

the circumstances of the case and the nature of the alleged impossibility.

The party alleging such an event must prove that it occurred and show that performance has become objectively impossible.

It will not be enough for someone to just claim that they were unable to perform because of the existence of Covid-19; rather, it would be necessary to show how the existence of Covid-19 rendered performance impossible.

For example, a manufacturer who had contracted to deliver bags of zumbani tea on a particular date may argue that the date of delivery fell within the lockdown period and therefore they could not possibly fulfil their obligation without violating the lockdown order.

In Chinyakata v Crystal Cabs & Another [2015] ZWHHC 660 the court held that the rule will not avail the defendant if the impossibility is self created or attributable to the defendant’s conduct.

As has already been emphasised in preceding paragraphs, in the absence of a force majeure clause in the contract, parties can rely on the common law principle of ‘supervening impossibility’.

In the case of Field No & Anor v Compuserve (Pvt) Ltd 1990 (2) ZLR 253 the court emphasised that in order to rely on this doctrine, a party must show that the supervening event rendered performance completely impossible. That means the impossibility must be absolute or objective as opposed to relative or subjective.

Further, a party must demonstrate that there was no reasonable foresight of the event causing impossibility at the time the contract was concluded.

Lastly, the event must be a legal or physical restraint and not merely an economic one, meaning that the mere fact that it has now become too expensive to perform will not cut it.

Covid-19 has resulted in business disruptions which, in the majority of cases, have prevented the performance of legal obligations either entirely or in part.

Fortunately for defaulters, there just might be a way to avoid liability for failure to perform. This will be assessed firstly by looking at the underlying contract, in the event that it contains a force majeure clause.

The next step will be to interpret the clause against the relevant set of facts to see if they fall within the purview of the clause.

Parties can then be guided by the wording of the contract. Where no such clause exists or the contract was a verbal one, the common law doctrine of supervening impossibility can be invoked.

In both instances the foreseeability of the Covid 19 pandemic and the ensuing disruptions on a party’s ability to perform will be central to the determination of the matter.

About the Authors: Jacob Mutevedzi and Natasha Ncube are commercial lawyers. They can be contacted @ [email protected] and [email protected] respectively. ebusinessweekly.co.zw