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International Construction Law Review

PACTA SUNT SERVANDA, NOTICES AND THE CONSTITUTION

PATRICK M M LANE, SC

Advocate of the Supreme Court of South Africa, Barrister, England & Wales

Introduction

Both the common law and the lex mercatoria from very early on accepted the general principle of the sanctity of contract, based on the moral concept of good faith, as well as the demands of the merchant community.1 The principle of sanctity of contracts was of universal application in Roman-Dutch Law with an underlying concept of good faith. The principle of pacta sunt servanda developed as a result and requires exact enforcement of contractual obligations created in circumstances which are consistent with freedom of contract and consensuality.2
Most standard form contracts contain clauses requiring that notice be given in respect of claims, be it for additional compensation or an extension of time, and provide that the claim will be forfeited if notice is not given. For instance, clause 20.1 of the FIDIC Red Book (1999) provides that, unless notice is given within 28 days after the contractor became aware, or should have become aware, of the event or circumstance entitling him to an extension of time or any additional payment, the employer is discharged from his liability in connection with the claim. This type of clause has historically been enforced. The courts have recognised individual autonomy and the freedom of contract. The party to a contract accepts responsibility for his actions and, in turn, the principle of pacta sunt servanda, requiring exact enforcement, has been applied. There are of course exceptions. The promulgation of the Constitution of the Republic of South Africa3 has implications in this regard. Section 34 of the Constitution provides:
“Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.”


The International Construction Law Review [2013

368

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