Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 84
South Africa
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As such:
– any business rescue applications filed with the CIPC in the prescribed manner and
form during the dies non period would be processed to reflect the dates on which
it was filed,
– the appointment of business rescue practitioners filed in the prescribed manner
and form during the dies non period would be endorsed by the CIPC to reflect the
dates on which it was filed, and
– entities commencing business rescue proceedings (filed in the prescribed manner
and form) will automatically receive a five day extension to appoint a business
rescue practitioner.
he offices of the Master of the High Court are also only operating in respect of
T
certain services.
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84
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
•
The RSA legal system recognises the principles of sanctity of contract and relaxation
in the face of an unforeseen event which justifiably renders the performance of
a contractual obligation impossible. There are a number of principles which are
available either in common law or commonly in agreements which may offer some
options or relief to contracting parties (described briefly below).
•
Although businesses have generally been encouraged to, where possible, not invoke
force majeure provisions in order to preserve existing contractual arrangements and
business, this decision is ultimately dependent on the particular contracting party,
industry and surrounding facts and circumstances. Practically, there have been some
contracting parties who have sought to invoke these provisions, while others have
been willing to hold back on doing so and/or negotiate and agree amendments to
contracting arrangements.
•
Under the common law, force majeure events include acts of God, war, riots, natural
disasters, energy blackouts, lockouts and labour unrest. Material Adverse Change
(“MAC”) clauses, like force majeure clauses, are used in contracts to allocate the risk
of events that are unforeseen at the time of contracting.
•
These provisions usually provide that a party will be able to suspend the performance
of their obligations for so long as the force majeure event continues or for a set period
of time, whichever is the shorter. Since this is a contractual provision, the extent to
which a party will be able to rely upon the clause will depend on the specific wording
of each clause. The onus of proving the force majeure will be on the party alleging it
and typically that party will have to show that the event was not within its reasonable
control, could not have reasonably been avoided and was not a result of an act or
omission on their part. While this may seem likely to encompass Covid-19, it is the
impact of Covid-19 on the party’s ability to perform that is essential. Force majeure
clauses are also likely to include an obligation on the parties to first discuss the effect
and potential mitigation of the force majeure, as well as a general obligation on the
claiming party to mitigate the impact of the force majeure.
•
It is common to see a force majeure clause that will lead to a termination of the
contract if the force majeure is not resolved after a certain number of days.
Government measures in key jurisdictions
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