This column normally deals with some aspect of law but today will deal with all South African law. The Constitution makes it clear that the Constitution is the supreme law of the country and the Bill of Rights applies to all law. This is an injunction that needs to be taken seriously by everyone engaged in law or commerce whether you are drafting a contract, performing a contract or enforcing a contract (which is essentially what commerce is).
Judgment after judgment of the courts, led by the Constitutional Court and influencing the law at every level, reminds us that our commercial behaviour must show the “markings of good constitutional citizenship”. Long-standing concepts of commercial law have been infused with the spirit and purport of the Bill of Rights. Our constitutional value system, for instance, has been used to develop the common law relating to the amount of interest that can be recovered on a debt, squarely limiting it to double the amount of the capital. A recent judgment used these values in finding that a debt payable on demand that had not been demanded within three years had been extinguished by the law of prescription. There are remarks in recent judgments to the effect that the law of contract is based on the principle of good faith which includes concepts of justice, reasonableness and fairness. In the recent ‘Please call me’ case (which also dealt tolerantly with whether a debt had been extinguished by the passage of time), the court reminded us all of the behaviour expected of an ethical corporate entity and warned against allowing concepts from the apartheid era to stand in the way of good faith behaviour.
The Constitutional Court set aside a finding by the employment law arbitration commission (CCMA) that failed to order the dismissal of an employee guilty of gross racism. In doing so it condoned the late pursuit of the appeal because of the centrality of the fundamental values of non-racialism and human dignity. It found a lesser penalty for the employee than dismissal was constitutionally and rationally intolerable in the context.
At the level of enforcement the courts have refused to apply the plain wording of a contract when the consequences would be out of proportion to the breach. The courts refused to call up a mortgage bond and to allow the property to be sold because the remaining debt was small in proportion to what had been paid off the bond and the outcome would be the indignity of homelessness for the borrowers. The law of interpretation of contract itself has, in accordance with this new spirit, developed so that the court looks not just at what the parties wrote down, perhaps badly, but the intended outcome of the contract taking into account the spirit of the Bill of Rights if necessary.
The Bill of Rights gives us all the right to citizenship. We must bear in mind that that is a reciprocal obligation requiring us to be good constitutional citizens in whatever we do, not the least is when engaging in commerce.
This article first appeared in Business Day Law and Tax Review