Contractual exemption clauses under the South African Constitution : an examination of the potential impact of public policy and Ubuntu on such provisions.

Abstract

This dissertation will examine the current state of our common law in relation to its treatment of exemption clauses in contracts, and will focus on recent developments which may augur greater scope and a new approach to be taken in future for South African courts to ensure fairness and the promotion of substantive justice for contracting parties faced with such provisions. Whilst it is acknowledged that exemption clauses are considered to be an integral part of most contracts and are used to facilitate the efficient running of businesses, their continued use in standard form contracts have been viewed with judicial suspicion and scrutiny as the inherent nature of these clauses have the potential to operate unfairly against a contracting party by excluding their rights of recourse which they would have otherwise had at common law. Public policy has always been a benchmark against which potentially unfair contracts terms have been measured however, the advent of the Constitution has brought about a new meaning to be prescribed to public policy as the Constitutional Court has declared that it is now deeply rooted and informed by constitutional values of dignity, equality, freedom and more recently ubuntu which is to infuse the common law principles of contract. Despite these developments, the new meaning of public policy and the apparent elevation of the spirit of ubuntu as an overarching and founding constitutional value has not been fully utilised by courts in a manner which can effectively address these potentially unfair, one-sided and abusive exemption clauses by declaring them to be contrary to public policy. Notwithstanding legislative acknowledgement and the subsequent enactment of the Consumer Protection Act 2008 which has brought about greater regulation of unfair and unconscionable contract terms, it is argued that the testing of potentially unfair and abusive exemption clauses against the dictates of public policy and ubuntu in a constitutional context may provide the South African courts with a new approach to pursue greater substantive justice in respect of these notoriously problematic clauses.