Controversial topic with huge impactThis seminar notes will indicate why section 14 of the CPA, which deals with the crucial cancellation and renewal requirements of fixed-term agreements, is, contrary to the general belief, not applicable to fixed-term leases relating to land and to estate agents’ mandate agreements.
Since the coming into operation of the CPA most legal advisers, property practitioners and auditors appear to have no difficulty in accepting that section 14 applies to fixed-term leases. Only a handful disagree and others hesitate to state categorically whether section 14 is applicable or not. It is apparent that confusion reigns.
The purpose of the notes is to clarify the matter
The purpose of the notes is to show that on a purposive interpretation of section 14 neither of these agreements is governed by section 14 of the CPA.
The method of interpretation makes the difference
It’s all a matter of using the correct method of legal interpretation of the CPA. Until now, most jurists, auditors and property practitioners have used the very narrow and outdated literalist approach to legal interpretation. However, the application of the much more acceptable and advanced purposive method of legal interpretation leads to better and more desirable interpretation results.
Escape from undesirable consequences
The effect of a purposive interpretation of the CPA is that the following undesirable consequences of fixed-term leases and estate agents’ mandate agreements in terms of a strict literalist approach fall away and are no longer applicable:
- agreements restricted to a minimum of two months; agreements for residential purposes.
- agreements restricted to a maximum of 24 months (two years);
- preferential treatment of juristic persons;
- allowance for repeated breach of contract by the “consumer”; and
- allowance for automatic continuation of these agreements.
Thorough research and conclusions
The notes is based on thorough research and conclusions by Prof Henk Delport from the Nelson Mandela Metropolitan University, Port Elizabeth.
The manual is a well-researched and comprehensive set of notes to be used in practice. In typical Gawie le Roux style, the notes follow a practical rather than an academic approach. Legal concepts and principles are explained in simple terms which can be readily understood.