n Stellenbosch Law Review = Stellenbosch Regstydskrif - Ensuring contractual fairness in consumer contracts after 2007 5 SA 323 (CC) - part 1




2007 5 SA 323 (CC) has important implications for insurance law, contract law in general, and an understanding of the interface between private common law and the Bill of Rights. In this matter an insurance policy determined that a claim against the insurer would lapse if the insured failed to serve summons on the insurer within 90 days of being notified of the insurer's repudiation of the claim. The insured argued that this provision conflicted with the constitutional right of access to the courts set out in section 34 of the Bill of Rights

The majority of the Constitutional Court, per Ngcobo J, considered the application of the Constitution of the Republic of South Africa, 1996 in private relationships. He eschewed direct application of the Bill of Rights to the contractual provision, but preferred to apply it indirectly via the contract law concept of public policy. He considered the meaning of this form of public policy in the light of the Constitution, determined the manner in which the section 34 right as an expression of public policy applied to this contract and related this to broader contractual fairness. Part I of this article focuses on these aspects.
The majority further considered the significance of the sanctity of contract under the Constitution and decided that it could only uphold the time-limitation clause if it was fair. Its test for determining fairness was derived from cases that determined whether statutory provisions were inconsistent with section 34. The majority upheld the clause on the basis that there was insufficient evidence to show that the provision was unreasonable or that it would be unreasonable to enforce it in the circumstances. Part II, which is to be published in 2009 (1) , is dedicated to an analysis of these issues.
The majority judgment is analyzed with reference to the trenchant criticism in the minority judgments of Sachs J and Moseneke DCJ, delivered in the same court, as well as the earlier judgments of the Transvaal Provincial Decision and Supreme Court of Appeal. Ultimately the majority judgment in the Constitutional Court is criticized for being too timid and in some respects unsystematic. However, the final conclusion is positive. These judgments can serve as a springboard for the development of a progressive contract law, built on the values and rights set out in the Constitution.


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