The following few rules may assist you to test whether a claim arising from a contract is ripe for litigation.
Specific performance
Where the contract expressly or tacitly stipulates a date for performance, obviously, that date must have arrived before legal proceedings may be instituted for performance, for example, payment of the purchase price or delivery of the goods sold.
Where the contract is silent on the date of performance, it is an implied term of the contract that performance has to be made forthwith, subject to the qualification that performance cannot be demanded unreasonably so as to defeat the objects of the contract or allow insufficient time for compliance (Exdev (Pty) Ltd v Yeoman Properties 1007 (Pty) Ltd [2008] 2 All SA 223 (SCA) [6]; Nel v Cloete 1972 (2) SA 150 (A) 159E).
In the case of a contract in terms of which no time for performance has been fixed the creditor may sue for payment of the contract price tendering to perform the reciprocal obligations in terms of the contract without prior demand to the purchaser to pay within a reasonable time. Prior demand is not part of the cause of action of the creditor suing for payment of the contract price. The onus is on the debtor to allege and establish that no reasonable time has elapsed since the conclusion of the contract (Theron v Theron 1973 (3) SA 667 (C) 671H-674C).
However concepts such as “performance cannot be demanded unreasonably” or “has a reasonable time lapsed since conclusion of the contract” are inherently uncertain. Accordingly it is a reasonable precaution by the creditor to give prior demand to the debtor to pay the contract price, tendering counter performance, before rushing to Court, for in the absence of the proposed demand the creditor may be deprived of the costs of the summons (Credit Corporation of SA Ltd v Roy 1966 (1) SA 12 (D) 16 in fin- 17B).
Damages
Contractual damages for late performance cannot be claimed unless the debtor has been in mora (Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1977 (4) SA 310 (T) 345A-346C).
If the time for performance is expressly, by implication or tacitly stipulated, the debtor is in mora if the debtor fails to perform on the agreed time for performance (Laws v Rutherfurd 1924 AD 261 at 262).
If the time for performance has not been agreed in terms of the contract, the debtor must be put in mora by a demand to perform within a reasonable time, upon failure of which damages for late performance may be claimed from the expiry of the reasonable time allowed in the demand (Breytenbach v Van Wijk 1923 AD 541 at 549; MacKay v Naylor 1917 TPD 533 at 537-538).
Cancellation
In the context of the cancellation of contracts they may be classified in the following classes:
First class: where time is of the essence either on account of the surrounding circumstances effecting the business of the parties or the nature of the merx, or by an express term making time of the essence.
Second class: where time is not of the essence, which may be divided into two subclasses:
first subclass: where the time for performance is expressly, by implication, or tacitly, stipulated;
second subclass: where the time for performance is not stipulated.
(Kangisser and Another v Rieton (Pty) Ltd 1952 (4) SA 424 (T) 428A-G)
In the case of the first class of contracts the right to cancel arises on the failure to perform on time (Louw v Trust-Administrateurs Bpk 1971 (1) SA 896 (W) 903B-H).
In the case of contracts of the second class (first and second subclasses) the right to cancel the contract is restricted to those failures to perform going to the root of the contract; that is where the failure to perform is such as amounting to a repudiation of the contract (Datacolour International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA)). Otherwise the creditor must demand performance by the debtor within a reasonable time on pain of cancellation upon failure to so perform, and cancel the contract in the event of such failure (Nel v Cloete 1972 (2) SA 150 (A)).