Authored By: Tsholofelo Makgale
I. Introduction
South African contract law has traditionally sought to uphold contractual certainty by enforcing agreements freely and voluntarily concluded between contracting parties. The constitutional era has, however, transformed the normative framework within which contractual disputes are resolved by requiring the common law to develop consistently with constitutional values.1
The constitutionalisation of contract law has elevated public policy as the principal mechanism through which courts test contractual terms against constitutional norms, since public policy is itself rooted in the Constitution.2 This has reignited debate over whether good faith should remain an underlying value informing public policy, or should become an independent ground for refusing contractual enforcement.
This article argues that good faith should not become an independent ground for refusing contractual enforcement. The constitutionally informed doctrine of public policy already provides the appropriate mechanism for giving effect to constitutional values in contractual disputes. Recognising good faith as a separate ground would introduce open-ended judicial discretion without any corresponding constitutional benefit. The discussion outlines the legal framework, examines the leading case law, and then critically evaluates whether the current approach reconciles fairness with certainty.
II. Legal Framework
The point of departure remains pacta sunt servanda, the principle that freely and voluntarily concluded contracts ought to be honoured.3 However, contractual enforcement is no longer assessed exclusively through common-law principles. A court may nonetheless refuse enforcement where a term, or its enforcement, is contrary to public policy.4
Section 39(2) requires courts, when developing the common law, to promote the spirit, purport and objects of the Bill of Rights,5 and this duty is the primary constitutional mechanism through which equality, dignity and freedom shape the public policy enquiry.6 Within this framework, good faith, together with fairness and reasonableness, continues to operate as an abstract value that ‘underlies and informs’ contract law rather than an independent rule.7 This formulation, however, admits of more than one interpretation, and the scope left for good faith after Beadica remains contested.8
III. Judicial Development of Good Faith and Public Policy
The restrictive position in Beadica traces to Brisley, where the Supreme Court of Appeal described good faith as ‘a foundational principle which generally underlies contract law,’ not a rule courts may invoke directly.9 Afrox Healthcare confirmed this approach, holding that good faith could not found an independent basis for resisting enforcement and channelling the enquiry instead through public policy.10
Barkhuizen confirmed public policy, tested against constitutional values, as the proper approach to constitutional challenges directed at contractual terms.11 Ngcobo J nonetheless left good faith open as a distinct concept, acknowledging a ‘compelling argument’ for its direct application without deciding the point,12 which Louw reads as a deliberate reservation for future development.13 The Court in Barkhuizen tied the enforcement of contracts to the constitutional values of freedom and dignity, holding that regulating one’s own affairs, even to one’s detriment, lies at the core of both.14
Louw categorises Brisley, Afrox Healthcare and Barkhuizen together as the line of judgments that set the tone for two decades of judicial conservatism on good faith.15 This conservatism was underpinned by a genuine concern that concepts such as fairness and equity depend too heavily on the individual judge’s own view of what is right, and are accordingly ill-suited to serve as independent legal standards.16 Louw further questions whether the underlying fear of judicial subjectivity has been overstated.17
Everfresh came closer to a direct role for good faith, with the Court observing that it was ‘hardly imaginable’ that constitutional values would not require negotiation in good faith.18 Botha subsequently offered the clearest description of good faith’s substantive content, as ‘the lens through which we come to understand contracts,’ since bilateral contracts are cooperative ventures rather than vehicles for advancing one party’s interests alone.19
The majority in Beadica reaffirmed Barkhuizen, holding that abstract values ‘have not been accorded autonomous, self-standing status as contractual requirements’ and operate only through rules such as public policy.20 Froneman J dissented, proposing a distinct role for good faith based on equality in exchange, requiring proof of a clearly disproportionate exchange and serious prejudice.21 The majority nonetheless did not overrule Botha, citing it with approval despite its generally cautious approach.22
IV. Critical Analysis
Beadica supports two competing interpretations of the role of good faith in South African contract law. On the broad reading, good faith is confined permanently to a ‘backstage’ function,23 whereas on the narrower reading, it may still operate ‘frontline’ if tied to clear, limited principles.24 The narrower reading is preferable, in that an absolute refusal to engage with abstract values sits uneasily with section 39(2) of the Constitution, since the Bill of Rights built on such values cannot be given effect through anything but value-based judicial reasoning.25 South African law already applies good faith directly in settled contexts, including implication, interpretation, and the duties owed within employment, agency and partnership contracts.26 Consequently, Beadica’s silence on these categories, and on the Court’s own recent employment-context ruling, is better explained by the narrow question before it than by any intention to displace them.27 These categories operate through confined rules rather than as a freestanding cause of action, and are consistent with the thesis advanced here.
Froneman J’s equality-in-exchange model is nonetheless the wrong vehicle for expanding good faith, since requiring proof of a ‘clearly disproportionate’ exchange reintroduces the evaluative judgment the model was meant to avoid, and conflicts with the Constitutional Court’s own view that regulating one’s affairs, even to one’s own detriment, is central to dignity.28 A better foundation lies in the version of good faith concerned with equality between persons rather than performances, requiring only appropriate regard for the other party’s interests, not fiduciary self-sacrifice.29 Equality between persons is the more defensible standard because it does not require a court to weigh the value of each party’s performance against some external benchmark.30 Instead, it treats the parties’ own purposes as the relevant measure, leaving what a performance is worth to the parties rather than the court.31 This approach therefore reinforces rather than competes with pacta sunt servanda.32
Louw’s complaint that courts have too readily treated certainty and good faith as adversaries is compelling, and his proposed objective standard of fair dealing deserves consideration.33 Yet converting good faith into a broad ethical standard invocable whenever conduct seems unfair risks recreating the uncertainty Brisley and Afrox Healthcare guarded against, and a parallel basis for refusing enforcement alongside public policy would introduce exactly the unpredictability Sasfin (Pty) Ltd v Beukes sought to avoid.34 The more defensible course is continued development of good faith’s existing footholds around fidelity to the bargain, keeping it anchored to what the parties actually agreed on.35
V. Conclusion
Read together, Brisley, Afrox Healthcare, Barkhuizen, Everfresh, Botha and Beadica reflect a judiciary that has consistently declined to elevate good faith into an independent, freestanding basis for refusing enforcement. The main concern has been preserving contractual certainty and limiting open-ended or unconstrained judicial discretion. This caution is, on balance, justified. The constitutionally informed public policy rule already gives courts a coherent mechanism for enforcing good faith and other constitutional values without exposing parties to open-ended discretion.
This is not a rejection of good faith’s relevance. Good faith should continue to be developed within its established categories, namely implication, interpretation and control of discretion, rather than as a separate ground alongside public policy.36 Louw is right that courts have sometimes let the fear of uncertainty outweigh its cost, but the answer lies in disciplined development within the existing framework, not a new independent doctrine. Going forward, courts should continue to give good faith concrete content through these established categories, guided by fidelity to the bargain, rather than entertain arguments for a freestanding good faith cause of action. Properly confined, good faith remains one of the instruments through which public policy, and the Constitution behind it, shapes South African contract law.
Footnote(S):
1 The Constitution of the Republic of South Africa, 1996, s 39(2).
2 Yeukai Mupangavanhu, ‘The Constitutionalisation of Contract Law in Light of the Public and Private Dichotomy in South Africa: An analysis of selected cases’ (2023) 37(1) Spec Juris 22, 24-25.
3 Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others [2020] ZACC 13 para 83.
4 Ibid para 80.
5 SA Constitution (n 1).
6 Mupangavanhu (n 2) 25.
7 Beadica (n 3) para 73.
8 Francois du Bois, ‘Developing Good Faith: Equality, Autonomy and Fidelity to the Bargain’ (2022) 12 Constitutional Court Review 223, 227
9 Brisley v Drotsky 2002 (4) SA 1 (SCA) para 22.
10 Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA) paras 31-32.
11 Barkhuizen v Napier 2007 (5) SA 323 (CC) para 30.
12 Ibid para 82.
13 Andre M Louw, ‘Yet Another Call for a Greater Role for Good Faith in the South African Contract of Law: Can We Banish the Law of the Jungle, While Avoiding the Elephant in the Room?’ (2013) 16(5) PER / PELJ 43, 62-63.
14 Barkhuizen (n 11) para 57.
15 Louw (n 13) 46.
16 Du Bois (n 8) 228-229.
17 Louw (n 13) 50-51.
18 Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) paras 16, 72.
19 Botha and Another v Rich NO and Others 2014 (4) SA 124 (CC) para 46.
20 Beadica (n 3) para 80.
21 Ibid paras 187-188.
22 Du Bois (n 8) 237.
23 Ibid 227.
24 Ibid.
25 Ibid 231.
26 Ibid 231-232.
27 Ibid 232-233.
28 Barkhuizen (n 11) para 57.
29 Du Bois (n 8) 236-237, 258.
30 Ibid 240.
31 Ibid.
32 Ibid 240-241, 259.
33 Louw (n 13) 69.
34 Jacques du Plessis, ‘Fairness in the Law of Contract: Reflections on Beadica’ (2022) 12 Constitutional Court Review 197, 203-204.
35 Du Bois (n 8) 253, 256, 258.
36 Ibid 258-259.
Bibliography
Table of Cases
Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA)
Barkhuizen v Napier 2007 (5) SA 323 (CC)
Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others [2020] ZACC 13
Botha and Another v Rich NO and Others 2014 (4) SA 124 (CC)
Brisley v Drotsky 2002 (4) SA 1 (SCA)
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC)
Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A)
Table of Legislation
The Constitution of the Republic of South Africa, 1996
Secondary Sources
Du Bois Francois, ‘Developing Good Faith: Equality, Autonomy and Fidelity to the Bargain’ (2022) 12 Constitutional Court Review 223
Du Plessis Jacques, ‘Fairness in the Law of Contract: Reflections on Beadica’ (2022) 12 Constitutional Court Review 197
Louw M Andre, ‘Yet Another Call for a Greater Role for Good Faith in the South African Contract of Law: Can We Banish the Law of the Jungle, While Avoiding the Elephant in the Room?’ (2013) 16(5) PER / PELJ 43
Mupangavanhu Yeukai, ‘The Constitutionalisation of Contract Law in Light of the Public and Private Dichotomy in South Africa: An analysis of selected cases’ (2023) 37(1) Spec Juris 22
