The case for economic hardship in South Africa: Lessons to be learnt from international practice and economic theory

Abstract

Although most leading legal systems provide for some form of legal relief in the case of economic hardship, South African law still does not address the issue of changed circumstances beyond that of objective impossibility or where the parties have provided for these instances contractually. Scholars have argued for an expansion of the doctrine of supervening impossibility in exceptional cases. However, the courts have to date not made any pronouncements in this regard. This article argues that a new default rule should be adopted that will reduce transaction costs and facilitate international trade. It is suggested that such a rule should build on the existing requirements set for the doctrine of supervening impossibility, but at the same time fuse international practice with the rules of economic theory.