The fair price rule and the South African law of contract: A historical and comparative analysis

[摘要] ENGLISH ABSTRACT: This thesis focuses on legal rules that allow a court to set aside or modify acontract on the basis of a large discrepancy in the value of the respectiveperformances. These 'fair price or 'just price rules have been the object of debateand disagreement among jurists for centuries.Although one such a rule previously formed part of the South African common lawof contract, the prevailing view is that the price does not have to be fair or reasonablefor a contract to be valid.However, due to changing attitudes to price control both locally and internationally,this view might require reconsideration. To this end, the study traces the treatment offair price rules historically and comparatively, and thereafter evaluates the applicationof these rules in the South African context by taking account of certain underlyingvalues and principles of the law of contract.The historical overview studies the development of the fair price rule from itsorigins in late classical Roman law to its reception and subsequent abolition inmodern law. The overview shows that jurists during the Middle Ages had a wellthought-out understanding of the fair price rule as a doctrine aimed at enforcing amarket-oriented just price in order to avoid the exploitation of weakness, pricediscrimination, fraud, and exceptionally harsh bargains.The comparative overview in turn shows that while a variety of differentapproaches to dealing with substantively unfair prices exist, there are signs of anincreased willingness to engage in price control. It is also evident that more modernfair price rules follow a flexible approach to the determination of whether the price isfair. This approach does not only take account of the objective disparity in the valueof the respective contractual performances, but also of the procedural fairness of theconclusion of the contract. These modern fair price rules follow a similarly flexibleapproach to restitution, by investing the court with the discretion to adapt the contractprice, or to avoid the contract and award damages to the disadvantaged party.Building on the comparative and historical analysis, the thesis concludes that it would be both desirable and suitable that a modern fair price rule, which follows a flexible approach to the determination of fairness, should be introduced into SouthAfrican common law of contract. This can be achieved through the development ofthe common-law rule that contracts may not be contrary to public policy. It is arguedthat this will lead to a law of contract that is better equipped to provide relief toprejudiced contracting parties, and that gives greater effect to a number offundamental values of our law of contract, such as dignity, party autonomy, goodfaith, and Ubuntu.

[发布机构] Stellenbosch University