Case name (full citation)/Legislation:
Gerolomou Constructions (Pty) Ltd v Van Wyk 2011 (4) SA 500 (GNP)

Area of law:
Contract – The affect of undue influence on the validity of contracts

Brief facts/summary:
 
The respondent rendered construction services to the appellant for an agreed fee. The appellant, however, deducted contra charges from the agreed fee in respect of, inter alia, damaged material and removal of material.

The respondent was required by the appellant, before any payment was made, to sign a contract that payment will be made in ‘full and final settlement of all accounts’. Subsequent to the signing of the contract, payment was made to the respondent who, later on, instituted proceedings against the appellant in the Magistrates Court. The Magistrates Court found in favour of the respondent and upheld the respondent’s claims in respect of the contra charges which were unduly deducted from the agreed fee. The appellant took this decision on appeal, relying on the contract in ‘full and final settlement of all accounts’ concluded between the parties, which appeal was dismissed.

The court held that, due to the disparity between the respondent and the appellant’s respective economic powers, combined with the fact that the respondent was in desperate financial need, the appellant had misused its influence over the respondent. Accordingly, the court held that the contract was not binding on the respondent as he had been unduly influence. 

Importance/value:
A litigant who wishes to claim rescission of a contract due to undue influence must establish that the other party gained an influence over him, that the influence weakened his resistance and that the other party used that influence in an unconscionable manner to persuade him to agree to an unfair contract.

WEBSITE DISCLAIMER: Save for the contents of this disclaimer, the content of this website is provided for general information purposes only and should not be construed as, and does not constitute, legal or other professional advice. To the extent that you wish to place reliance upon any information contained on this website, you do so totally at your own risk and we accept no responsibility for any loss or damage whatsoever, howsoever arising. In addition, the hyperlinks provided on this website are provided for convenience only. We make no representations or warranties whatsoever in respect of the accuracy, completeness and/or reliability of any information, opinions, data and/or content provided on such linked website, nor do we endorse or take any responsibility for the content of any such linked website.