Making Sense of Barkhuizen 2 : An Investigation into the Public Policy Defence of ‘Unfair Enforcement’ in South African Law, with Reference to the Law on Covenants in Restraint of Trade
- Authors: Moroeng, Tsukudu Kenyatta
- Date: 2021-04
- Subjects: Restraint of trade -- South Africa , Public policy (Law) -- South Africa , Contracts (Roman-Dutch law) , Customary law -- South Africa , Barkhuizen v Napier
- Language: English
- Type: thesis , text , Masters , LLM
- Identifier: http://hdl.handle.net/10962/177147 , vital:42794
- Description: This thesis investigates the application of the public policy test for determining the enforceability of a valid contractual clause established in Barkhuizen v Napier. After analysing the historical development of the application of the doctrine of public policy, the study examines the conceptualisation and application of the public policy test in the leading cases in South Africa. The study then provides an analysis of the recent judgment of Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others, which outlined the current legal position on the proper constitutional approach to the judicial enforcement of valid contractual clauses. The study argues that, although the Constitutional Court in Beadica provided some clarity on what public policy is in modern South African law, it did not, from a practical point of view, set out the method that should be used to adjudicate such cases. The study thereafter suggests that, to address this issue, our courts should consider developing a methodological approach to measuring public policy in unfair enforcement cases. To support this proposition, the study examines the law on determining the enforcement of restraint of trade agreements. It is argued that, within that context, the courts have formulated a methodological approach in the form of a list of standard questions that a judge should ask when determining the enforceability of a restraint clause. The thesis then closes with a case study, using guidelines established from the approach in restraint cases, to illustrate how the proposed guideline may be formulated, and how it could be applied in general unfair enforcement cases. The thesis argues that a practical guide of this nature would serve as a useful tool for judges to use when faced with a claim relating to the unfair enforcement of a valid clause other than a restraint clause, and would thus ensure consistency in contractual enforcement analysis in South Africa. , Thesis (LLM) -- Faculty of Law, Law, 2021
- Full Text:
- Date Issued: 2021-04
- Authors: Moroeng, Tsukudu Kenyatta
- Date: 2021-04
- Subjects: Restraint of trade -- South Africa , Public policy (Law) -- South Africa , Contracts (Roman-Dutch law) , Customary law -- South Africa , Barkhuizen v Napier
- Language: English
- Type: thesis , text , Masters , LLM
- Identifier: http://hdl.handle.net/10962/177147 , vital:42794
- Description: This thesis investigates the application of the public policy test for determining the enforceability of a valid contractual clause established in Barkhuizen v Napier. After analysing the historical development of the application of the doctrine of public policy, the study examines the conceptualisation and application of the public policy test in the leading cases in South Africa. The study then provides an analysis of the recent judgment of Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others, which outlined the current legal position on the proper constitutional approach to the judicial enforcement of valid contractual clauses. The study argues that, although the Constitutional Court in Beadica provided some clarity on what public policy is in modern South African law, it did not, from a practical point of view, set out the method that should be used to adjudicate such cases. The study thereafter suggests that, to address this issue, our courts should consider developing a methodological approach to measuring public policy in unfair enforcement cases. To support this proposition, the study examines the law on determining the enforcement of restraint of trade agreements. It is argued that, within that context, the courts have formulated a methodological approach in the form of a list of standard questions that a judge should ask when determining the enforceability of a restraint clause. The thesis then closes with a case study, using guidelines established from the approach in restraint cases, to illustrate how the proposed guideline may be formulated, and how it could be applied in general unfair enforcement cases. The thesis argues that a practical guide of this nature would serve as a useful tool for judges to use when faced with a claim relating to the unfair enforcement of a valid clause other than a restraint clause, and would thus ensure consistency in contractual enforcement analysis in South Africa. , Thesis (LLM) -- Faculty of Law, Law, 2021
- Full Text:
- Date Issued: 2021-04
Restraint of trade in the employment context
- Authors: Luckman, Peter Craig
- Date: 2007
- Subjects: Restraint of trade -- South Africa , Labor contract -- South Africa
- Language: English
- Type: Thesis , Masters , LLM
- Identifier: vital:10203 , http://hdl.handle.net/10948/842 , Restraint of trade -- South Africa , Labor contract -- South Africa
- Description: Clauses in restraint of trade agreements concluded between an employer and an employee often present difficult legal issues to deal with. This complexity is due to the fact that a court, in deciding whether to enforce a restraint provision, has to strike a balance between two equal but competing policy considerations, namely, the sanctity of the contract and the freedom of movement of people in a market economy. In striving to balance the sanctity of contract with the right of freedom to trade, it is necessary to decide which of these two policy considerations should take precedence by having regard to the public interest served by them in the particular circumstances. In the watershed case of Magna Alloys and Research(SA)(Pty) Ltd v Ellis, the Appellate Division decided the sanctity of contract had greater precedent in South African law and that undertakings in restraint of trade were prima facie valid and enforceable, unless the party seeking to avoid its obligations could show that the restraint of trade was contrary to public interest. The second consideration, namely that a person should be free to engage in useful economic activity and to contribute to the welfare of society, tempers the sanctity of contract considerations. Accordingly, the courts have struck down any unreasonable restriction on the freedom to trade where it was regarded as contrary to public interest. In considering the reasonableness and therefore the acceptability of restraint of trade provisions from a public policy perspective, the following five questions need consideration: Is there a legitimate interest of the employer that deserves protection at the termination of the employment agreement? If so, is that legitimate interest being prejudiced by the employee? If the legitimate interest is being prejudiced, does the interest of the employer weigh up, both qualitatively and quantitatively against the interest of the employee not to be economically inactive and unproductive? Is there another facet of public policy having nothing to do with the relationship between the parties but requires that the restraint should either be enforced or rejected? Is the ambit of the restraint of trade in respect of nature, area and duration justifiably necessary to protect the interests of the employer? In enforcing a restraint, the court will consider all the facts of the matter as at the time that the party is seeking to enforce the restraint. If a court finds that the right of the party to be economically active and productive surpasses the interest of the party attempting to enforce the restraint, the court will hold that such restraint is unreasonable and unenforceable. Consideration of the enforceability of restraints is often found to be challenging in view of the answers to the above stated five questions often remaining of a factual nature and subjective, i.e. the view and perceptions of the presiding officer play an important role. A further complexity is the limited early effect which the Constitution of the Republic of South Africa had on dispute resolution pertaining to restraints of trade in the employment context and the prospects of imminent changes to the pre-Constitutional era locus classicus of Magna Alloys and Research (SA)(Pty) Ltd v Ellis.
- Full Text:
- Date Issued: 2007
- Authors: Luckman, Peter Craig
- Date: 2007
- Subjects: Restraint of trade -- South Africa , Labor contract -- South Africa
- Language: English
- Type: Thesis , Masters , LLM
- Identifier: vital:10203 , http://hdl.handle.net/10948/842 , Restraint of trade -- South Africa , Labor contract -- South Africa
- Description: Clauses in restraint of trade agreements concluded between an employer and an employee often present difficult legal issues to deal with. This complexity is due to the fact that a court, in deciding whether to enforce a restraint provision, has to strike a balance between two equal but competing policy considerations, namely, the sanctity of the contract and the freedom of movement of people in a market economy. In striving to balance the sanctity of contract with the right of freedom to trade, it is necessary to decide which of these two policy considerations should take precedence by having regard to the public interest served by them in the particular circumstances. In the watershed case of Magna Alloys and Research(SA)(Pty) Ltd v Ellis, the Appellate Division decided the sanctity of contract had greater precedent in South African law and that undertakings in restraint of trade were prima facie valid and enforceable, unless the party seeking to avoid its obligations could show that the restraint of trade was contrary to public interest. The second consideration, namely that a person should be free to engage in useful economic activity and to contribute to the welfare of society, tempers the sanctity of contract considerations. Accordingly, the courts have struck down any unreasonable restriction on the freedom to trade where it was regarded as contrary to public interest. In considering the reasonableness and therefore the acceptability of restraint of trade provisions from a public policy perspective, the following five questions need consideration: Is there a legitimate interest of the employer that deserves protection at the termination of the employment agreement? If so, is that legitimate interest being prejudiced by the employee? If the legitimate interest is being prejudiced, does the interest of the employer weigh up, both qualitatively and quantitatively against the interest of the employee not to be economically inactive and unproductive? Is there another facet of public policy having nothing to do with the relationship between the parties but requires that the restraint should either be enforced or rejected? Is the ambit of the restraint of trade in respect of nature, area and duration justifiably necessary to protect the interests of the employer? In enforcing a restraint, the court will consider all the facts of the matter as at the time that the party is seeking to enforce the restraint. If a court finds that the right of the party to be economically active and productive surpasses the interest of the party attempting to enforce the restraint, the court will hold that such restraint is unreasonable and unenforceable. Consideration of the enforceability of restraints is often found to be challenging in view of the answers to the above stated five questions often remaining of a factual nature and subjective, i.e. the view and perceptions of the presiding officer play an important role. A further complexity is the limited early effect which the Constitution of the Republic of South Africa had on dispute resolution pertaining to restraints of trade in the employment context and the prospects of imminent changes to the pre-Constitutional era locus classicus of Magna Alloys and Research (SA)(Pty) Ltd v Ellis.
- Full Text:
- Date Issued: 2007
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