Government measures in key jurisdictions 3rd edition final - Flipbook - Page 112
SouthAfrica
•
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.
The offices of the Master of the High Court are also only operating in respect of certain
services.
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
112
•
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 (“
”) 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.
•
MAC clauses are contractual and are not regulated by the common law. The contract will
define the circumstances in which a material change will be deemed to occur and each
contract should be carefully considered with the relevant facts to determine if
circumstances exist to invoke a MAC. The burden of proof is similarly on the party alleging
the MAC.
Government measures in key jurisdictions