This thesis critically examines the subscriber rule for common law reservations and argues against the strict application of the rule in the context of 'contracts of necessity' (as defined in the research paper). AGAINST THE STRICT APPLICATION OF THE PRECAUTIONARY RULE OF THE SUBSCRIBER RULE IN CONNECTION WITH NECESSARY CONTRACTS.
CAVEAT SUBSCRIPTOR – ‘LET THE SIGNATORY BEWARE’
14 According to the declaration theory, the proper basis of the contract is found in the contractual declarations of the parties. Consequently, there are serious doubts about the practical applicability of the declaration theory. 25.
MISTAKE IN CONTRACT – A BRIEF DISCUSSION 34
In terms of the justus error approach, the party in error must prove that the error was causal, substantial and justus (reasonable). In order to prove that the mistake was justus, the party in error will rely on the same three grounds as in the case of the reasonable reliance approach – that is, the party in error must prove that the party not in error (contract.
It is therefore interesting to note that Innes CJ formulated the caveat subscriptor rule with reference to English law and not to Roman-Dutch law58 – that is to say, the rule was introduced into our law as a kind of objective declaration theory . However, after a series of cases in which our courts made it clear that the true basis of contractual liability in our law is genuine consensus, tempered by the reliance theory, the caveat subscriptor rule was redefined in terms of reliance.59
GROUNDS FOR ESCAPING THE STRICT APPLICATION OF THE CAVEAT SUBSCRIPTOR RULE
Although it may be argued that our courts have detracted from a consistently strict application of the caveat subscriptor rule by recognizing and developing certain exceptions, these exceptions are clearly recognized in the interest of fairness to the parties (and especially the signatory ). A look at some of the reasons behind the introduction of the National Credit Act and the Consumer Protection Act Obiter 2, 217.
THE CONSUMER PROTECTION ACT - A POSSIBLE LEGISLATIVE LEVELING OF THE PLAYING FIELDS
25 consumer in a conspicuous manner likely to be noticed by a 'plain warning'. In what follows, I will focus on the potential role of the courts and the common law in relation to the proposed development of the application of the warning rule.
A DISTINCTION WITH A DIFFERENCE - DISTINGUISHING BETWEEN THE ACTUAL BASIS AND THE UNDERLYING ASSUMPTIONS OF THE CAVEAT
As can be seen from the discussion above, the cautionary client rule is a type of reliance theory. The signatory understands the conditions and appreciates their importance and is aware of the consequences of signing; 114. 109 O Ben-Shahar “The Reading Opportunity Myth in Contract Law” (2008) University of Chicago Law &.
In order to critically assess the continued application of the advance notice rule, some more fundamental aspects of the development of contract law in general must be considered, including the way in which the binding of contracts has evolved from the current consensus to that of imputed. The introduction of standard form contracts and their widespread use in modern consumer transactions is perhaps the single most important factor undermining the underlying assumptions of the advance notice rule.
THE EVOLUTION OF CONTRACT LAW AND THE CHANGING JUDICIAL ATTITUDES TOWARDS THE RESPECTIVE RESPONSIBILITIES OF THE
In what follows, I will briefly examine how, in my opinion, our courts have given indications of a possible change in attitude towards the underlying assumptions of the rule of reserved subscribers and the respective responsibilities of the signatory and the enforcer of the contract in light of the realities of modern consumer transactions characterized by extensive application of standard -from contracts. 36 the signatory is no longer expected to ensure that he or she is familiar with the terms of the contract prior to signing. As explained above, these judgments only illustrate what, in my view, is a possible change of attitude towards the underlying assumptions of the proviso rule and the respective responsibilities of the signatory and the enforcer of the contract.
In light of this, I will later suggest some practical methods by which this area of common law could be developed to give the signatory more room for manoeuvre. 37 non-readers, especially in the context of necessary contracts, to demonstrate that a shift in fairness to the signatory is very welcome in light of the modern realities associated with consumer transactions.
THE REALITY OF CONSUMER NON-READERSHIP AND THE PROBLEM OF ILLITERACY IN THE SOUTH AFRICAN CONTEXT
Standard contract forms have a 'cloaking effect', whereby the standard terms are accepted unseen, unread and often without any understanding of their implications by the signatory. According to Ben-Shahar, "[t]o bothering to read and process what is in the contract proposal would be one of the more striking examples of consumer irrationality and obsessive behavior":168. The behavioral economics literature and OFT findings reveal that individuals often do not have clear, stable or well-ordered preferences.
In Section V below I will go on to illustrate that increased fairness to the unwilling signatory in the context of contracts of necessity is not only required in light of the various psychological factors and behavioral biases at play at the time of contracting (discussed above). , but also guarantees the constitutional mandate of our courts in terms of Article 39(2) of the Constitution. 45 develop the common law in light of the spirit, purpose and objects of the Bill of Rights and the fundamental constitutional values of human dignity, equality and freedom.
THE DANGERS OF ADHERING TO THE STRICT APPLICATION OF THE CAVEAT SUBSCRIPTOR RULE
CAVEAT SUBSCRIPTOR AND THE CONSTITUTIONAL VALUES OF FREEDOM AND DIGNITY
46 terms of the separation of the market and the state, private and public law; at its fullest it is the doctrine of laissez faire.”190. Accordingly, it is suggested that, to use a framework characterized and fueled by the principles of classical liberal contract theory and the doctrine of freedom of contract in dealing with standard form consumer contracts in circumstances of necessity or duress, "is to both err. to value a claim to liberty which is inappropriately high, and to overlook the elements of liberty which are actually at stake":192. It is absolutely necessary to note the fact that in a modern society such as ours many services (water, electricity, telephones and transport, to name a few) can be regarded as essentials and that for the great majority of South Africans the pure doctrine of freedom of contract is merely ' an illusion.197.
The telephone subscriber has no freedom to negotiate the terms of the service. 51 as a means to an end rather than being used as an end in itself.214 In this way, the strict application of the caveat subscriptor rule in circumstances of necessity may implicate the values of freedom and dignity and conflict with the disability-based conception of dignity that endorses the case law of our Constitutional Court.
CAVEAT SUBSCRIPTOR AND THE VALUE OF EQUALITY
In countries like South Africa, this take-it-or-leave-it attitude supported by law is completely inadequate and highly detrimental to the well-being of the country's vulnerable majority.”224. Content equality", on the other hand, "requires consideration of the actual social, economic and political conditions of groups and individuals in order to determine whether the constitutional commitment to equality is respected."227. This society is supposed to be built on the basis of the values written in the first provision of the constitution.
The fact that the constitution does not impose a general positive duty on private individuals to promote substantive equality cannot be changed by the court's duty as contained in the so-called trickle-down clause [that is, section 39, subsection of the constitution. to promote the spirit, purpose and object of the Bill of Rights when the common law is developed. It is argued that in such cases the strict application of the reserved subscriber rule will not only serve as an instrument to perpetuate inequality, but may also have the effect of locking the weakest members of our society into a cycle of oppression.
CAVEAT SUBSCRIPTOR AND THE ENFORCEMENT OF ‘PRIVATE LEGISLATION’
The scope of oppressive measures in South Africa was not limited to the relationship between the government and the individual, but also to the relationship between the individual and the individual. When society grants freedom of contract, it does not guarantee that all members of the community will be able to use it to the same extent. Similar sentiments were expressed by Justice Sachs in his assessment of the legal status of standard contracts in Barkhuizen v Napier:250.
The only real difference, from the point of view of constitutional law, is that in scenario A the strongman is a state organ."254. 59 may work to the detriment of the most vulnerable members of our society and at the same time approve the imposition of 'private legislation' in the form of standard contracts reinforcing the abuse of private power in a way that is contrary to the image and aspirations of South Africa's transformative constitution.
A NEW GROUND FOR ESCAPING THE STRICT APPLICATION OF THE CAVEAT SUBSCRIPTOR RULE AND THE ROLE OF PUBLIC POLICY
The foundation and underpinnings of the caveat subscriptor rule need to be re-examined and built on the rock of democratic values embodied in the Constitution. The first method would entail a lowering of the threshold regarding the reasonableness of the unwitting signatory. It is important to bear in mind at this point that the reasonableness of the reliance on the part of the contract enforcer is determined objectively (alternatively, expressed in terms of the doctrine of the error of iustus, the reasonableness of the signer's error is determined objectively ).
71 surrounding the non-readability of consumers, to see how proferens support would be reasonable. The third method would bring about a development of the common law of misrepresentation in relation to unexpected terms or misleading documents. It is submitted that this area of our common law could be developed to provide greater freedom to the unwilling signatory by requiring greater disclosure on the part of the enforcer of the contract.
Kerr AJ The Principles of the Law of Contract 6de Uitg (Durban, Suid-Afrika: Lexis Nexis Butterworths, 2002).
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