Most agreements do not have to be in writing to be legally binding (the exceptions to this rule being suretyships, contracts for the sale of immovable property and certain executory donations).
It is trite in our law that an agreement, whether through words (an express agreement) or by conduct (a tacit agreement), is reached when parties have reached consensus on the fact that they intend to create binding obligations between them.
Upon the entering into of an express or tacit agreement, the full force of the law is behind the enforceability of the promises made by the parties thereto.
One of the issues before the court in Cliff v Electronic Media Network (Pty) Ltd (1368/2016)  ZAGPJHC 2 (29 January 2016) (“Cliff Case”), was whether a tacit contract existed between radio and television personality, Gareth Cliff (“Cliff”) and the well-known television channel, M-Net.
The facts of the case are briefly as follows:
On 18 January 2016, Cliff launched an application in the South Gauteng High Court following his dismissal as a judge on M-Net’s 2016 season of its television music competition Idols South Africa (“Idols”).
In Part A of his application, Cliff claimed the interim relief of urgent reinstatement of what he alleged was his contractual relationship with M-Net. In Part B of his application, which is yet to be heard, he seeks permanent re-instatement of his 2016 contract with M-Net, as well as future renewals thereof, a declaration that his termination was unconstitutional, payment of damages and M-Net’s retraction of its reputational damaging remarks against Cliff.
The wheels of this case were set in motion when Penny Sparrow (“Sparrow”) posted a statement on her Facebook page that was viewed as racist and derogatory.
Shortly after Sparrow’s post, Cliff tweeted that “People don’t understand free speech at all.”
Both Sparrow and Cliff’s statements were met with widespread public anger and outrage on social media.
It was all this negative public attention that allegedly led to M-Net’s decision to fire Cliff from his role as a judge on Idols.
In delivering his judgment, Nicholls J considered the requirements which Cliff had to prove in order to successfully bring an urgent interim application for urgent relief, namely:
1. a prima facie right;
2. a reasonable apprehension of irreparable harm;
3. the balance of convenience favouring the granting of interim relief; and
4. the absence of another remedy.
Nicholls J was not so concerned with whether Cliff’s tweet amounted to the advocacy of hate speech, but rather with whether a contractual relationship existed between Cliff and M-Net and if so, whether that contractual relationship should be reinstated.
The learned judge held that Cliff had met all the requirements for interim relief as he had shown “…a prima facie right that he had a contract with M-Net which was terminated without due process…” (my emphasis).
Cliff’s relief sought in Part A of his application was thus granted. He was temporary reinstated as an Idols’ judge pending the finalisation of Part B of his application.
Over the past 30 years, there has been much adjudication on the various tests the courts apply in concluding whether a tacit agreement exists where the facts, established on a balance of probabilities, are capable of supporting an inference that the parties formed such an agreement.
The first test is known as the “no other reasonable interpretation” test. This test was adopted by the Supreme Court of Appeal (“SCA”) in the case of Standard Bank of South Africa Ltd v Ocean Commodities Inc and Others 1983 SA 276 (A) (“Ocean Commodities Case”).
In this case, Corbett JA held that in order to prove the formation and existence of a tacit contract, it is necessary to demonstrate, by a preponderance of probabilities, unequivocal conduct which is capable of no other reasonable interpretation than that the parties intended to, and in fact did, contract on the terms alleged.
The second test is known as the “most plausible probable conclusion” test. Shortly after adopting the “no other reasonable interpretation“ test, the SCA adopted a somewhat less stringent test in the case of Joel Melamed and Hurwitz v Cleveland Estates (Pty) Ltd; Joel Melamed and Hurwitz v Vorner Investments (Pty) Ltd 1984 (3) SA 155 (A) (“Joel Case”).
In this case, Corbett JA recognised that a tacit contract may also be found to exist where, by a process of inference, the most plausible probable conclusion from all the relevant proved facts and circumstances, is that the parties entered into the contract.
In this case, Corbett JA remarked in passing that the test adopted in the Ocean Commodities Case may require reformation. This he appeared to question but added that it was not the occasion to resolve the differences between the two tests and further not necessary to express a preference between the one formulation of the test over the other.
Since the Ocean Commodities Case and the Joel Case, the two tests have been interchangeably applied by the South African courts. It does however seem apparent that the “no other reasonable interpretation” test has been the most frequently adopted over the years.
In determining whether a contractual relationship existed between Cliff and M-Net, Nicholls J fixated on the parties’ unequivocal and clear conduct in light of the relevant circumstances (i.e. whether a tacit contract existed between the parties). Only then could an inference be drawn as to whether the parties intended to, and did, reach consensus on the tacit terms alleged.
He held that the conduct of the parties so clearly and unequivocally evidenced the existence of a tacit contract, that it would make no difference whether one were to adopt the approach “…that a contract can be established by inferring the most plausible conclusion from the proven facts…” (the Joel Case) or “…whether on a preponderance of probabilities the facts allow for no other reasonable interpretation…” (the Ocean Commodities Case).
The Cliff case is another illustration of how the two tests are applied interchangeably.
If the existence of a tacit contract and/or the terms thereof remain a contentious issue before the South Gauteng High Court, it will be interesting to follow how the presiding officer will adjudicate on the application of the two varying tests in making a final ruling.