Battle of Forms

Instead of drafting contracts of sale specific to each transaction, parties to commercial transactions generally rely on their own standard terms and conditions, creating a situation of competing terms and conditions. The question is – which terms and conditions apply?

Justice Lord Denning MR, in Butler Machine Tool Co v Ex-Cell-O Corporation (England) Ltd, referred to this as the “Battle of Forms”. But who wins the “battle”?

Under common law, the law of contract is based on the basic principles of offer and acceptance also known as “The Mirror Image Rule”. According to this rule, acceptance of the offer has to match the offer in every detail. In the event that the acceptance of the offer is purported to be governed by the acceptor’s terms and conditions instead, it is not acceptance at all but rather a counter-offer rejecting the initial offer. The other party can then decide to accept or reject the counter-offer; an absence of the refusal thereof is implied acceptance.

In most cases however, this “battle” is won by the party who “fires the last shot”, termed as the “Last Shot Rule”. In this instance, the last party to put forward their terms and conditions before performance of the purported contract would govern the contract. Again, the lack of any objection thereto would be implied acceptance thereof.

In the Butler Machine Tool Co case, Justice Lord Denning asserted that a contract will exist “as soon as the last of the forms is sent and received without objection”.

In South African case law, Guncrete (Pty) Ltd v Scharrighuisen Construction (Pty) Ltd 1996 2 SA 628 (N), it is illustrated that South Africa follows a similar approach to that of the Last Shot Rule. In this case, the court held that the contractor’s acceptance of the sub-contractor’s tender, which acceptance included a clause that the contract would be subject to the contractor’s terms and conditions, amounted to a counter-offer which was “impliedly” accepted by the sub-contractor.

It must be noted that different legal systems favour different approaches to resolve the “battle of forms” as the abovementioned methods are not practiced everywhere, and while the aforesaid approaches aid the resolution of the “battle of forms”, parties to a purported commercial contract should aim to resolve the “battle” before performance by either party.

Bearing this in mind, parties to international commercial transactions should ensure that their standard terms and conditions are properly drafted for the purpose of avoiding any uncertainty by either party.

Holly Hughes

Can an Employee be dismissed on suspicion of misconduct?

There is always contention as to whether or not an Employer has followed the correct procedure and whether or not there was a fair reason for dismissing an Employee. In general there are the two fundamental legs to a dismissal dispute – procedure and substance. In Labour court and CCMA matters the onus is always on the Employer to prove the fairness of a dismissal. This is determined on a balance of probabilities which is based on the circumstances of the matter.

Section 188 of The Labour Relations Act deals with dismissals and permits an Employer to dismiss an employee for misconduct. What is unclear though is “what constitutes misconduct in the clearest sense” and “what offences may constitute misconduct”. The question then arises whether or not an Employer can dismiss and Employee because he or she suspects the employee have committed misconduct. The leading case of Algorax (Pty) Ltd v Chemical Industrial Workers Union and Another {1995} 10 BLLR 1 (LAC) says yes, provided that the suspicion is bona fide and reasonable. The more recent case of Senzeni Mbanjwa v Shoprite Checkers (Pty) Ltd and Others (DA 4/11) {2013} ZALAC says no, stating that “suspicion, however strong or reasonable as it may appear to be, remains a suspicion and does not constitute misconduct”.

The facts of the case:

The Employee was employed by Shoprite Checkers as a cashier. One day the Employee rang up certain items for a customer who was a car guard outside the shop. The customer was short on money and returned 10 minutes later to pay the difference. The items were rung up at the kiosk as opposed to the proper till as required. The assistant manager of the store watched the Employee ring the items up and overheard the Employee and customer talking during this process. For a number of reasons including this occasion, the Employee was suspicious of the Employees conduct.

The Employee was called to a disciplinary enquiry and charged with gross misconduct in that she had attempted to under ring certain items while attending to her duties as cashier. The Employee was found guilty by the chairperson and summarily dismissed. The Employee referred the matter to the CCMA and when the matter was Arbitrated, the Employee claimed that the alleged misconduct was based only on the Employers suspicion and was not bona fide or reasonable. The CCMA found in favour of the Employee and concluded that the dismissal was therefore substantively unfair. The Employer applied for the decision to be reviewed and was successful on the basis that a full and proper disciplinary hearing was done by the Employer, and the Labour court sent the dispute back to the CCMA for Arbitration once again.

Before the matter was Arbitrated once again the Employee appealed the Labour court’s decision claiming that the Labour court had dealt with the procedural issues of the dispute as opposed to the substantive issues and had therefore misdirected itself and erred. On appeal the Employee claimed that the only issue to be determined was whether or not there was misconduct and whether or not this could be proved. The Labour Appeal court found that the Employer had only a suspicion that the Employee had committed misconduct and the allegations of misconduct had not been proved by the Employer on a balance of probabilities. The appeal was therefore upheld and the Employee’s dismissal was once again found to be substantively unfair.


Employers and chairpersons must be careful when dismissing an Employee and must ensure that they have sufficient proof and evidence to substantiate misconduct before making a decision to discipline or dismiss an employee. An Employer must therefore have a bona fide and reasonable suspicion that an Employee has committed an act of misconduct, and that suspicion must be backed up with solid evidence.

Warren Sundstrom

Portugal’s Golden Visa Program

The Portuguese Golden visa program is an investor residency program allowing foreigners to obtain a fully valid residency permit in Portugal. This permit not only allows investors to enter and/or live in Portugal but allows free travel within the 26 member countries incorporated in the Schengen agreement.

The program launched by the Portuguese authorities in 2012 is flexible with basic legal requirements and is fast becoming the European migration plan of choice. According to the latest Portuguese immigration statistics, at the end of January 2015, it had already attracted in excess of 1,25 billion Euros in foreign investment.

The draw for investors is a fast track entry to Schengen Europe, whilst for the Portuguese it’s attracting foreign investment helping to boost an economy still recovering from the recession.

Portugal is a southern European country on the Iberian Peninsula, bordering Spain and the Atlantic Ocean. It is an attractive small country with a temperate climate, 850kms of splendid beaches and 3000 hours of sunshine per year.

Portugal has a unique cultural heritage with a balanced blend of tradition and modernity, and where the people are very hospitable.

There are 3 options for investors namely job creation, property or capital investments. The property option is the most attractive with a minimum investment purchase price of 500,000 Euro for a property either for occupation or for rental income.

Portugal has an established rental market. The investment needs to be maintained for a 5 year period and the funds need to come from abroad.

Residency applications are approved after the investment. The visa granting process is sensible with a 7 day annual stay, and the requirement of a no prior criminal record. The golden visa is valid for 1 year and renewed for subsequent periods of 2 years, and also accommodates immediate family members.

The residency permit will entitle the investor to work and enjoy the same social benefits as the local citizens. Permanent residency can be granted after 5 years on application and citizenship after 6 years.

Sonia Rudman

PS : McLarens Attorneys is able to assist with Golden Visa application’s via its Portuguese Legal firm Associate Program.


Adultery – Can an aggrieved spouse claim damages?

The decision in Vivian v Kilian 1927 AD 449 resulted in South African courts recognising that a person has a claim for damages against a third party who had engaged in adulterous behavior with that person’s spouse.

The grounds upon which a person could rely on to pursue such a claim were:

  • Adultery: Defined as the act of having sexual intercourse with a married person; and
  • Enticement or Alienation of Affection: Defined as giving attention to a married person with a view and intention to make that person abandon or stray from their marriage.

The claim created by the decision in Vivian v Kilian existed in South African law and was developed over time from 1927 until 2014, notwithstanding that the grounds of divorce changed to a no fault based system with the promulgation of the Divorce Act in 1979.

On 25 September 2014, in the decision of RH v DE [2014] ZASCA 133, the Supreme Court of Appeal of South Africa abolished the existence of the claim by inter alia stating that “in light of the changing mores of our society, the delictual action based on adultery of the innocent spouse has become outdated and can no longer be sustained; that the time for its abolition has come.”

In reaching its decision the Supreme Court of Appeal considered various factors, including but not limited to:

  • The origin of the claim in English Law;
  • That the action is outdated, archaic and that it has lost its place in the context of a modern society;
  • That 100 years ago, South African courts recognized that adultery was no longer a criminal offence in the decision of Green v Fitzgerald 1914 AD 88;
  • That adultery was abolished as a ground of divorce by the Divorce Act of 1979;
  • The consideration that other civil law countries such as France, the Netherlands, Germany and Austria did not recognize a claim based on adultery;
  • That other countries that inherited the action from English had since abolished the action because it no longer conformed with considerations of morality;
  • That the action was available against a third party only and not against the adulterous spouse

As a result of the court’s findings on 25 September 2014, the act of adultery was found to no longer be wrongful in the sense that it attracts legal liability and thus no longer available as part of our law. It must be noted that while a claim on the abovementioned grounds no longer exists in our law, the existence of other claims connected to the institution of marriage in our law, such as an action for patrimonial harm suffered by a person through the loss of consortium of an adulterous spouse and actions for abduction, has yet to be decided upon by the courts.

Nuno Palmeira