Lease Agreement Between Landlord and Tenant

A lease agreement was entered into between the landlord HE Street and the tenant PA Wander. The lease contract was for the tenant to lease the complete house and out buildings situated at 7 Matlabas close in Morningside. The lease shall commence on the 7 July 200 and terminate on the 30 June 2009. The lease agreement stipulates that the tenant and only the tenant had the option to renew the lease for a further period of 12 months at the same terms and conditions of the original lease except in respect of the rent payment which shall increase by 10%. The tenant exercised her right to renew the lease agreement for a further 12 months.

There are 5 types of breach of contract in general being, default of the debtor, default of the creditor, Positive mal-performance, Repudiation, and Prevention of performance. A breach of contract occurred when the tenant with 7 months into the new contract vacated the property, stating that the landlord was in breach for failing to make repairs to the house that the tenant claimed to be necessary. This type of breach is called Repudiation because the debtor or in this case the tenant failed to perform her contractual obligations until the specified date and therefore is in default and a breach of contract has occurred. The tenant also failed to pay for the lights and water consumed by her electing only to pay a nominal sum per month, irrespective of the actual amounts used. The landlord will now look at possible remedies for breach of contract. There are 3 main types of remedies namely execution of the contract, cancellation of the contract and a claim for damages. The landlord being the innocent party will claim damages from the tenant breaking the lease contract and moving out and giving no notice and not paying the rent due for the balance of the lease. Alternatively damages could be claimed for the time it takes to get a new tenant and the commission costs for getting a new tenant to cover the period. An execution of the contract in terms of an order for specific performance where the tenant, being the default party will be required to deliver the performance she agreed to in terms of the contract she signed.

‘There are 6 factors that will limit or terminate a natural person’s capacity to act’:

Age

A person’s age has the potential to limit one’s ability to act if they under the age of 18 years which is the minority. A minor is a natural person who has not yet reached the majority where one will have full legal capacity to act according to The Age of Children’s Act 38 of 2005. With regards to minors who are under the age of 7 years, he/she has no capacity to act and may not enter into a contract due to the inability to make sensible judgments about contractual agreements.

A minor over the age of 7 years has limited capacity to act. This is due to the fact that minors may only perform a juristic act with the assistance and approval of their legal guardian. A juristic act is an act that has a legal effect and is legally binding

Marriage

There are two types of marital property regimes in South Africa. They are marriage in community of property and marriage out of community of property.

Marriage in community of property is where the assets of both parties are communal and each party is co-owner of all the assets in the marriage including the estate. All assets are shared and everything is in one pool. This can limit a person capacity to act as any rights and duties from contracts will be creating a legal obligation to do something and therefore binding the joint estate of the parties and creating common rights and duties of both parties.

Parties can get married out of community of property which can only be done if they arrange an antenuptial contract. This is a contract which signed before the marriage.

Marriage out of community of property means that each party keeps their own estate and no assets are shared. Each party may act with full capacity with regards to their own separate assets. If either party dies the accumulated wealth during the marriage is shared with the remaining party.

Mental capacity

If a person enters into a contract when he/she is mentally ill the contract will be void and therefore all rights and duties within the contract will not be created. This is because a mentally deficient person is incapable of acting legally. If a person does not understand what they were doing when they entered the contract and did not realise the consequences of the contract, he/she can be classified as mentally ill and therefore cannot conclude a contract. The problem is determining if the person was mentally ill when entering into a contract with the other party.

Influence of Alcohol and Drugs

If an individual is intoxicated due to drugs and/or alcohol and cannot understand the consequences of his actions and therefore he/she is incapable of performing acts relating to legal rights and obligations. However If someone enters into a contract while under the influence of alcohol but can still understand and appreciate the legal implications of the contract, the contract will be valid as the individual has shown the appropriate capacity to contract. If the person is intoxicated and cannot form his/her will then the contract is void and has no legal binding.

Prodigality

When a person spends his money negligently and is generally incapable of managing their own affairs a family member or friend my apply to the High court to have that individual certified as a prodigal This is a consequence of an individuals’ defective and irresponsible conduct and behaviour. With sufficient evidence the high court may proclaim him/her a prodigal which means that a curator will be appointed to manage their affairs. It is very hard to have a person certified as incapable of managing their own affairs as it conflicts the fundamental human rights every South African has protected under the Constitution and the Bill of Rights. The High Court therefore will require a in-depth analysis and proof that the individual is incapable of managing their own affairs, The prodigal has very limited capacity to act as there are a number of checks and balances that are designed to protect the interest of the prodigal.

Insolvency

When a person goes bankrupt that need to follow the insolvency Act 24 of 1936 which will influence their capacity to act after the legal confiscation of their estate. This is due to funds not being paid. The insolvent property will be assigned to the trustee whose position is to liquidate the estate so that creditors can be paid the debt owed. After sequestration of the estate the insolvent will lose his/her ability to dispose of any assets and conclude contracts relating to the estate without the consent of the trustee.