, Question 1
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC)
Facts
Everfresh Market Virginia (Pty) Ltd entered into a lease agreement with Shoprite Checkers
(Pty) Ltd for premises in the Virginia Shopping Centre. The lease, which ran from April 2004
to March 2009, contained a renewal clause requiring both parties to agree on rental for any
extended term. Before the lease expired, Everfresh notified Shoprite of its intention to renew
and proposed a revised rental. Shoprite refused, claiming the clause was unenforceable.
Everfresh nevertheless remained in occupation after expiry, prompting Shoprite to seek
eviction. Both the High Court and the Supreme Court of Appeal found that the clause
imposed no enforceable duty to negotiate. Everfresh then approached the Constitutional
Court, invoking constitutional principles for the first time1.
Legal Question
The Constitutional Court had to decide whether clause 3 of the lease imposed a legal
obligation on the parties to negotiate renewal terms in good faith, and if not, whether the
common law of contract should be developed under section 39(2) of the Constitution to
impose such a duty2.
Reasons for the Decision / Ratio Decidendi
In a majority judgment delivered by Yacoob J, the Court emphasised that courts must
consider whether the common law should evolve to reflect constitutional values, including
good faith, ubuntu, fairness, and dignity in contractual relations. Section 39(2) obliges courts
to interpret and develop the law in a manner consistent with the spirit, purport, and objects of
the Bill of Rights3. The Constitutional Court found that the High Court erred in failing to
consider whether the common law should recognise an enforceable duty to negotiate in
good faith4. The Court noted that enforcement of good faith is of public interest because
contracts affect both businesses and more vulnerable parties, and ignoring these
constitutional values perpetuates outdated colonial contract principles5. Recognising a duty
to negotiate in good faith would reinforce pacta sunt servanda while embedding
constitutional norms into contractual justice.
1
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) paras 3–8.
2
Everfresh (n 1) para 5.
3
Everfresh (n 1) para 23.
4
Everfresh (n 1) para 28.
5
Everfresh (n 1) para 36.
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC)
Facts
Everfresh Market Virginia (Pty) Ltd entered into a lease agreement with Shoprite Checkers
(Pty) Ltd for premises in the Virginia Shopping Centre. The lease, which ran from April 2004
to March 2009, contained a renewal clause requiring both parties to agree on rental for any
extended term. Before the lease expired, Everfresh notified Shoprite of its intention to renew
and proposed a revised rental. Shoprite refused, claiming the clause was unenforceable.
Everfresh nevertheless remained in occupation after expiry, prompting Shoprite to seek
eviction. Both the High Court and the Supreme Court of Appeal found that the clause
imposed no enforceable duty to negotiate. Everfresh then approached the Constitutional
Court, invoking constitutional principles for the first time1.
Legal Question
The Constitutional Court had to decide whether clause 3 of the lease imposed a legal
obligation on the parties to negotiate renewal terms in good faith, and if not, whether the
common law of contract should be developed under section 39(2) of the Constitution to
impose such a duty2.
Reasons for the Decision / Ratio Decidendi
In a majority judgment delivered by Yacoob J, the Court emphasised that courts must
consider whether the common law should evolve to reflect constitutional values, including
good faith, ubuntu, fairness, and dignity in contractual relations. Section 39(2) obliges courts
to interpret and develop the law in a manner consistent with the spirit, purport, and objects of
the Bill of Rights3. The Constitutional Court found that the High Court erred in failing to
consider whether the common law should recognise an enforceable duty to negotiate in
good faith4. The Court noted that enforcement of good faith is of public interest because
contracts affect both businesses and more vulnerable parties, and ignoring these
constitutional values perpetuates outdated colonial contract principles5. Recognising a duty
to negotiate in good faith would reinforce pacta sunt servanda while embedding
constitutional norms into contractual justice.
1
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) paras 3–8.
2
Everfresh (n 1) para 5.
3
Everfresh (n 1) para 23.
4
Everfresh (n 1) para 28.
5
Everfresh (n 1) para 36.
