Article Sidebar
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright in all material published in PER/PELJ vests in the author, provided that authors grant, by submission of their contributions, permission that their contributions may be shared and adapted without restriction. An author furthermore agrees that the same contribution may not be published elsewhere without the written permission of the editor.
Anyone gaining access, electronically or otherwise, to a contribution to PER, may quote from such contribution, use the intellectual content thereof, share and adapt it, but subject to the following conditions:
you must give appropriate credit, provide a link and indicate if changes were made; and
the copyright of the author(s) may not be infringed in any way.
Main Article Content
Contentious Issues Arising from Payments made in Full and Final Settlement
Abstract
Payments made in full and final settlement have on several occasions presented interpretative difficulties for our judiciary, as will become apparent from this case discussion: Be Bop A Lula Manufacturing & Printing v Kingtex Marketing 2008 3 SA 327 (SCA). The Supreme Court of Appeal reversed the judgments of the trial court and the appeal court (full bench of the Cape Provincial Division) which were in favour of the creditor. In such cases, the essential enquiry is whether an agreement of compromise exists. A transactio or compromise (in the form of a legal agreement) exists where the relevant parties agree to settle previously disputed or uncertain obligations. Like any other agreement, a compromise is based on the contractual rules of offer and acceptance. The first material enquiry in this case wherein the debtor delivered the cheque payment to the creditor (in full and final settlement of the account), is whether 1) an intended offer of compromise exists; or 2) did the debtor merely intend to make payment towards an admitted liability. The court in the Be Bop (SCA) case came to the correct finding that an offer of compromise existed. Whilst the judgment is brief, the finding itself gives practical recognition to the principle that admission of liability for a specific amount, accompanied by payment (in full and final settlement), may still be accompanied by an intended offer of compromise, instead of merely making payment towards an admission of liability.
PER/PELJ Vol. 4 2008: pp. 154-180
