Good Faith in the South African Law of Contract

Abstract 

Good faith holds a lasting but debated role in South African contract law. Although it is deeply  rooted in Roman and Roman-Dutch law and influenced by the post-1996 constitutional  framework, it has not become an independent doctrine that can override the pacta sunt  servanda principle. Courts tend to see good faith as a fundamental value that influences  interpretation, performance, and public policy rather than as a standalone legal obligation. This  article examines the historical growth, judicial approach, and constitutional aspects of good  faith in South African contract law. It argues that, while good faith should not serve as an  unlimited defense that endangers commercial certainty, it must still guide judicial reasoning  when fairness, equality, and constitutional principles call for tempering strict contractual rules.  The paper ends by suggesting a framework for a principled, gradual development of good faith  that balances legal predictability with justice and ubuntu. 

1 Introduction 

Contractual relationships depend not only on legal enforceability but also on ethical conduct  between parties. The expectation that agreements will be carried out honestly and fairly  supports the entire law of obligations. However, while this expectation is widely recognised,  the legal importance given to good faith varies across different jurisdictions. South African law,  shaped by both civil and common law traditions, demonstrates an ongoing tension between  fairness and certainty. 

The moral aspect of good faith cannot be overlooked in a society built on constitutional values  of dignity, equality, and freedom. However, courts have traditionally been hesitant to turn this  moral expectation into a directly enforceable legal principle. The doctrine of pacta sunt  servanda, that agreements made freely must be honoured, remains fundamental to contract law.  The challenge for South African jurisprudence is to find ways to give meaningful effect to good  faith without undermining the stability and predictability essential for commercial activity. 

This article examines that challenge in depth. It traces the evolution of good faith from its  Roman origins to its modern constitutional context, surveys the leading authorities, and  evaluates the role of ubuntu and public policy in reshaping contractual fairness. The goal is to  identify a principled equilibrium: one where good faith operates as a constitutional value and  interpretive tool, rather than a vague moral licence for judicial intervention. 

2 Historical Roots and Conceptual Foundations 

The origins of good faith lie in Roman law, where bona fides represented more than honesty it  signified fairness, loyalty, and equitable dealing. Certain bona fide iudicia contracts such as  sale, lease, partnership, and mandate required the judge to evaluate performance according to  the standard of good faith, allowing equitable relief where literal adherence to formal rules  would produce injustice. This flexible approach ensured that contract law reflected not only  strict legalism but also the moral expectations of commerce and community. 

In Roman-Dutch law, jurists such as Hugo Grotius and Johannes Voet preserved this principle  as a guiding moral force. They viewed good faith as integral to contract formation and  performance, operating as a standard of fairness and a tool for interpreting the parties’  intentions. Grotius, in particular, recognised that bona fides required each party to act in a  manner consistent with the confidence placed in them by the other.2 The principle thus served  to humanise contractual relations while maintaining respect for private autonomy. 

When these ideas were received into South African law through the Dutch colonial heritage,  bona fides continued to influence judicial reasoning. Early decisions treated good faith as an  equitable underpinning to contract law, assisting in interpretation and gap-filling rather than  serving as an independent source of rights.3 Over time, however, a more formalist approach  emerged. As industrialisation and commerce expanded in the twentieth century, the courts  placed growing emphasis on certainty and predictability, gradually confining good faith to a  rhetorical or background role. 

The debate over its scope thus reflects broader philosophical currents in private law: whether  law should enforce moral fairness, or whether fairness must yield to certainty.4 South African  courts, especially under apartheid-era positivism, tended toward the latter. Yet, even in this Modern case law reveals an evolving and sometimes uneasy relationship between good faith  and contractual enforcement. The courts have neither abandoned the concept nor elevated it to  an autonomous doctrine. Instead, they have sought to balance its moral weight against the need  for legal stability.5 

3 Judicial Treatment of Good Faith in Modern Jurisprudence 

Judicial reasoning in the late twentieth and early twenty-first centuries demonstrates this  delicate equilibrium. In Brisley v Drotsky,6the Supreme Court of Appeal (SCA) underscored  that good faith, though foundational, does not constitute an independent ground for invalidating  contracts. The court observed that while bona fides informs the law’s normative structure, it  cannot itself be the source of legal obligations. Instead, its influence must flow through  established doctrines such as estoppel, duress, or public policy. The SCA’s reasoning reflected  a deliberate restraint acknowledging good faith as a moral constant but denying it direct  enforceability. 

A similar approach was evident in Afrox Healthcare Bpk v Strydom,7 which concerned an  exemption clause in a hospital admission contract. The plaintiff sought to avoid the clause  based on fairness and inequality of bargaining power. The SCA reaffirmed that fairness alone  does not suffice to invalidate a contract freely concluded. Yet, the court conceded that public  policy now informed by constitutional values could in exceptional cases render certain clauses  unenforceable. The case thus confirmed that while good faith cannot independently invalidate  a term, it influences the determination of public policy, especially where bargaining disparity  or fundamental rights are implicated. 

Earlier precedent in Bank of Lisbon and South Africa Ltd v De Ornelas reflected similar  tensions.8 The Appellate Division recognised the equitable heritage of good faith but declined  to apply it as a general corrective principle. The court held that while judges may temper strictness in appropriate cases, they must avoid substituting personal conceptions of fairness  for legal rules. 

By contrast, subsequent decisions have shown a cautious openness to good-faith reasoning in  specific contexts. In South African Forestry Co. Ltd v York Timbers Ltd,9the SCA  acknowledged that good faith may inform interpretation and performance, particularly in long term commercial relationships requiring cooperation. Similarly, in Silent Pond Investments CC  v Woolworths (Pty) Ltd, the High Court enforced an express contractual duty of integrity,  illustrating that parties may voluntarily incorporate good faith as a binding obligation.10 These  cases suggest that where the contract itself contemplates cooperation or trust, courts are willing  to give effect to that expectation. 

The Constitutional Court has also contributed to this dialogue. In Barkhuizen v Napier, a case  involving a time-limitation clause in an insurance contract, the Court held that public policy  must be evaluated in light of constitutional values such as fairness, equality, and access to  courts.11 While declining to create a general good-faith defence, the Court established that  unfair contractual terms may be invalidated where they conflict with constitutional rights.  Importantly, the Court distinguished between subjective fairness and objective constitutional  consistency, signalling that moral disapproval alone is insufficient; the impugned term must  offend constitutional principle. 

In Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd, the Constitutional Court  went further by considering a renewal clause requiring negotiation in good faith.12 Although  the Court ultimately declined to impose such a duty in the absence of express wording, it  recognised that constitutional values, including ubuntu, could inform future development of  contract law. The judgment implicitly invited further argument on how ubuntu as a principle of  relational justice might reinforce good faith in contractual dealings. 

Taken together, these authorities confirm that South African law regards good faith as a value  permeating all contractual doctrines, not as an independent cause of action. The courts’  reluctance to elevate it reflects a principled concern for predictability, but their willingness to  invoke it as an interpretive and constitutional tool reveals its enduring normative power. 

4 Constitutional Values and the Reimagining of Contractual Fairness

The enactment of the 1996 Constitution transformed every branch of private law. Section 39(2)  requires that the common law be developed “to promote the spirit, purport and objects of the  Bill of Rights.”13 This provision compels courts to interpret contractual principles in harmony  with the Constitution’s values of dignity, equality, and freedom. 

In this constitutional framework, public policy no longer derives solely from conventional  morality or market efficiency. It must instead be infused with constitutional values. The  Constitutional Court in Barkhuizen articulated this explicitly, stating that public policy “is now  deeply rooted in the Constitution and the values it enshrines.”14 Good faith, understood as  honesty and fairness in contractual relations, thus finds constitutional reinforcement through  these values. 

The concept of ubuntu has further enriched the discourse. Ubuntu embodies compassion,  humaneness, and community solidarity values resonant with good faith. By integrating ubuntu into contract law, courts acknowledge that contractual relations occur within a social matrix  rather than a moral vacuum. As Justice Yacoob observed, the Constitution envisions a society  based on mutual respect and shared humanity, and contract law must reflect that ethos. 

Nevertheless, courts have resisted conflating constitutional fairness with open-ended  discretion. The Constitutional Court in Everfresh emphasised that while ubuntu and good faith  may influence interpretation, they cannot override the parties’ explicit terms without a sound  doctrinal basis.15 The constitutionalisation of contract law, therefore, entails a recalibration, not  a revolution. It requires judges to interpret and apply existing doctrines such as public policy,  undue influence, or unconscionability in a manner consistent with constitutional values, while  avoiding arbitrary interference with contractual autonomy.16 

5 The Functional Role of Good Faith 

The practical operation of good faith can be identified across several domains of contract law.  Each reveals how the principle exerts normative influence without displacing doctrinal  stability. 

Interpretation and construction. 

Courts often rely on good faith to interpret ambiguous clauses in a way that promotes coherence  and fairness. Where contractual terms admit more than one plausible meaning, an interpretation  favouring reasonable commercial conduct is preferred. This approach ensures that good faith  indirectly shapes the substance of obligations by guiding interpretation in accordance with  shared ethical standards.17 

Exemption and limitation clauses. 

The scrutiny of exclusionary clauses demonstrates another vital role of good faith. In Afrox  Healthcare, the SCA acknowledged that while freedom of contract allows such clauses, their  enforcement must not contravene public policy or constitutional fairness.18 Good faith thus  influences the court’s determination of whether enforcing an exclusion clause would produce  unjust results incompatible with human dignity or equality. 

Performance and cooperation. 

Long-term and relational contracts such as joint ventures, distribution agreements, and leases often require ongoing collaboration. Here, good faith manifests as a duty to cooperate and  refrain from conduct that frustrates the contract’s purpose. Although South African law does  not yet impose a general duty of good faith performance, courts increasingly recognise implied  obligations of reasonableness and cooperation consistent with constitutional values.19 

Comparative context. 

International developments illustrate the plausibility of this approach. German law codifies  good faith (Treu und Glauben) as a general clause in s 242 of the Bürgerliches Gesetzbuch,  obliging parties to act in accordance with fairness and loyalty. Australian and Canadian courts  have, in recent decades, developed duties of good faith and honest performance.20 South  African law, situated between civil and common law systems, naturally gravitates toward a  middle path acknowledging good faith as a guiding value while restraining its reach through  constitutional and doctrinal limits. 

6 Challenges and Risks of Over-Expanding Good Faith 

While good faith promotes fairness, its overextension risks undermining the predictability  essential for commerce. If every dispute invites judicial reconsideration of contractual fairness,  parties lose the security that enables economic planning and investment. Legal certainty is not  an abstract value; it underpins market confidence and transactional stability. 

Critics of expansive good faith warn that granting judges broad discretion to invalidate terms  based on subjective fairness could erode the rule of law. Courts must apply objective standards,  not personal morality. Excessive judicial activism could blur the line between interpretation  and legislation, threatening the separation of powers.21 South African courts have thus  prudently resisted a generalised good-faith doctrine, preferring to channel fairness through  established categories such as duress, misrepresentation, and public policy. 

Economic arguments reinforce this caution. Overreliance on good faith could increase  litigation and contracting costs, as parties might invoke fairness opportunistically to evade  obligations. Predictability encourages voluntary compliance; uncertainty breeds disputes. The  key lies in disciplined application employing good faith as a lens through which to view  reasonableness and constitutional consistency, not as an autonomous veto over private choice.22 

7 Towards a Coherent and Contextual Doctrine of Good Faith

A principled approach to good faith requires balance and clarity. Rather than elevating the  concept into an all-purpose remedy, courts should continue to integrate it through specific,  context-sensitive doctrines. 

First, contextual application should guide judicial reasoning. In contracts involving stark  inequality or adhesion, good faith should inform public-policy review and interpretation. When  standard-form agreements impose harsh conditions or deprive access to courts,  constitutionalised public policy shaped by good faith can justifiably limit enforcement.23 

Second, legislative development may complement judicial refinement. Consumer protection  legislation already codifies elements of good faith by prohibiting unfair or unreasonable terms.  Further legislative attention to small-business contracts, employment arrangements, and electronic transactions could codify duties of disclosure and honesty, enhancing certainty while  embedding fairness.24 

Third, judicial education and transparency are essential. Decisions invoking good faith must  articulate clearly how constitutional values interact with contractual autonomy. Detailed  reasoning promotes consistency and guides future courts and practitioners.25 

Fourth, comparative insight can enrich doctrine without importing foreign rules wholesale.  Civil-law models demonstrate that codified good faith can coexist with predictability, provided  its application is structured. South Africa’s mixed legal heritage positions it uniquely to craft a  hybrid model that reflects both Roman-Dutch morality and common-law discipline.26 

Finally, incrementalism should remain the guiding principle. Courts ought to develop good  faith gradually, case by case, ensuring that each doctrinal advance is grounded in clear  reasoning and constitutional legitimacy. The Constitutional Court’s cautious approach in  Barkhuizen and Everfresh exemplifies this methodology: measured, principled, and faithful to  both fairness and certainty.27 

8 Conclusion 

Good faith endures as one of contract law’s most significant and debated principles. It embodies  the moral expectations of honesty and fairness that sustain commerce and social trust. In South  African law, the principle’s vitality has been tested by the competing demands of certainty and  justice. Courts have resisted converting good faith into a free-standing remedy, yet they  consistently recognise its role as an animating value. 

The constitutional era has deepened this understanding. Through section 39(2) and the infusion  of ubuntu, good faith now resonates as both a legal and moral imperative. Its future lies not in  revolutionary transformation but in disciplined, incremental development ensuring that  contract law remains both predictable and humane. 

Ultimately, the true strength of South African contract law lies in its ability to balance freedom  with fairness. Good faith, properly understood, is not a threat to autonomy but its ethical  counterpart. It anchors the law in constitutional values while preserving the reliability upon which commerce depends. In this balance between justice and certainty, morality and legality rests the enduring promise of good faith in the South African law of contract. 

References/ Bibliography 

Journals. 

• Dube Felix, The ethos of tolerance of diversity in post-apartheid jurisprudence, Volume  43, 23-35 (2022). 
• François du Bois, Introduction: History, System and Sources, Volume 2, 1-53 (2004).
• Mark Heywood, Economic Policy and the Socio-Economic Rights in the South African  Constitution, 1996–2021: Why Don’t They Talk to Each Other?, Volume 11, 341-377  (2021). 
• Robert Sharrock, The general principles of the law of contract, Volume 1, 15-25 (2011).
• Mupangavanhu Yeukai, The Constitutionalisation of Contract Law in Light of the  Public and Private Dichotomy in South Africa: An Analysis of Selected Cases, Vol 37  No 1, 23-35 (2023). 
• Mogale Malapane, The role of the courts in the public policy domain in South Africa,  Volume 43, 713-728 (2022).  
• Anthony D. Gray, Relational contract theory, the relevance of actual performance in  contractual interpretation and its application to employment contracts in the United  Kingdom and Australia, Volume 52, 62-100 (2023). 

Case Laws. 

• Brisley v Drotsky, (2002) ZAENGTR 3, (SA). 
• Afrox Healthcare Ltd v Strydom, (2002) ZASCA 73, (SA). 
• Bank of Lisbon & South Africa v Ornelas and Another, (1988), (53/85) ZASCA 35,  (SA).
• South African Forestry Company Ltd v York Timbers Ltd, (2004), 4 All SA 168, (SA).
• Silent Pond Investments CC v Woolworths (Pty) Ltd, (2007), ZAKZHC 7, (SA).
• Barkhuizen v Napier, (2007), BCLR 691, (SA). 
• Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd, (2010), ZAKZPHC  34, (SA).

1 LLB, Department of Mercantile Law, University of Fort Hare.

2 Dube Felix, The ethos of tolerance of diversity in post-apartheid jurisprudence, Volume 43, 23-35 (2022).

3 François du Bois, Introduction: History, System and Sources, Volume 2, 1-53 (2004).

4 Mark Heywood, Economic Policy and the Socio-Economic Rights in the South African Constitution, 1996– 2021: Why Don’t They Talk to Each Other?, Volume 11, 341-377 (2021).

period, the ethical resonance of good faith persisted, resurfacing whenever strict enforcement  produced manifestly unjust results. 

5 Robert Sharrock, The general principles of the law of contract, Volume 1, 15-25 (2011).

6 Brisley v Drotsky, (2002) ZAENGTR 3, (SA). 

7 Afrox Healthcare Ltd v Strydom, (2002) ZASCA 73, (SA). 

8 Bank of Lisbon & South Africa v Ornelas and Another, (1988), (53/85) ZASCA 35, (SA).

9 South African Forestry Company Ltd v York Timbers Ltd, (2004), 4 All SA 168, (SA).

10 Silent Pond Investments CC v Woolworths (Pty) Ltd, (2007), ZAKZHC 7, (SA). 

11 Barkhuizen v Napier, (2007), BCLR 691, (SA). 

12 Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd, (2010), ZAKZPHC 34, (SA).

13 South Africa, 1996 Const. S39(2). 

14 Barkhuizen v Napier, (2007), BCLR 691, (SA). 

15 Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd, (2010), ZAKZPHC 34, (SA).

16 Mupangavanhu Yeukai, The Constitutionalisation of Contract Law in Light of the Public and Private Dichotomy  in South Africa: An Analysis of Selected Cases, Vol 37 No 1, 23-35 (2023).

17 Mogale Malapane, The role of the courts in the public policy domain in South Africa, Volume 43, 713-728  (2022).  

18 Afrox Healthcare Ltd v Strydom, (2002) ZASCA 73, (SA). 

19 Anthony D. Gray, Relational contract theory, the relevance of actual performance in contractual interpretation  and its application to employment contracts in the United Kingdom and Australia, Volume 52, 62-100 (2023).

20 Mupangavanhu Yeukai, The Constitutionalisation of Contract Law in Light of the Public and Private Dichotomy  in South Africa: An Analysis of Selected Cases, Vol 37 No 1, 23-35 (2023).

21 Mupangavanhu Yeukai, The Constitutionalisation of Contract Law in Light of the Public and Private Dichotomy  in South Africa: An Analysis of Selected Cases, Vol 37 No 1, 23-35 (2023). 

22 Mogale Malapane, The role of the courts in the public policy domain in South Africa, Volume 43, 713-728  (2022). 

23 Robert Sharrock, The general principles of the law of contract, Volume 1, 15-25 (2011).

24 Mupangavanhu Yeukai, The Constitutionalisation of Contract Law in Light of the Public and Private Dichotomy  in South Africa: An Analysis of Selected Cases, Vol 37 No 1, 23-35 (2023). 

25 Dube Felix, The ethos of tolerance of diversity in post-apartheid jurisprudence, Volume 43, 23-35 (2022).

26 Robert Sharrock, The general principles of the law of contract, Volume 1, 15-25 (2011).

27 Baekhuizen v Napier, (2007), BCLR 691, (SA).