South Africa: Construction Law Bulletin - Exclusion Of Liability Clause

Last Updated: 24 June 2010
Article by Alastair Hay


The Supreme Court of Appeal handed down an interesting judgment in the latter part of 2009 dealing with the entitlement of a materials supplier to invoke certain exclusion of liability clauses in relation to material supplied which did not conform to the contractual specification.


Cladall Roofing (Pty) Ltd ("Cladall") was awarded a contract in early 2006 by the Addo Citrus Corporation for the installation of roofing at a cooling facility in Addo in the Eastern Cape. The cooling facility was required for the storage of oranges in preparation for export.

The contract required IBR sheeting with a minimum thickness of 0,5 millimetres. In addition the sheeting was required to be of industrial strength, otherwise known as "full hard". This was necessary because the roof trusses were far apart and the roof was required to be trafficable. In other words, the roof had to be able to withstand human traffic without bending or sagging.

The Contract

Cladall invited SS Profiling (Pty) Ltd ("SS") to quote for the supply of the required IBR sheeting. In its invitation Cladall specified that it required 13 000 square metres of IBR sheeting to the following specification:

"0,50 millimetres IBR FH Galvanised Z275 Spelter as per ISCOR"

Z275 indicated the minimum galvanised content of the IBR sheeting. FH is an abbreviation for full hard. Iscor was the acronym for the Iron and Steel Corporation which has subsequently become known as Mittal Steel.

SS  confirmed that it could supply the requisite material to the specification required and Cladall then placed a formal order on SS  for the material for delivery in February 2006.

When it had opened its account with SS, Cladall had been required to sign in acceptance of certain standard conditions of agreement incorporated in SS's credit application. Two of the relevant clauses contained in these standard conditions and which played a part in the case read as follows:

"6.4 The Customer hereby confirms that the goods or services on any tax invoice issued duly represent the goods or services ordered by the Customer at the prices agreed to by the Customer and, where delivery/performance has already taken place, that the goods or services were inspected and that the Customer is satisfied that these conform in all respects to the quality and quantity ordered and are free from any defects."

"7.3 No claim under this Agreement shall arise unless the Customer has, within 3 days of the alleged breach or defect occurring, given SS Profiling 30 days written notice by prepaid registered post to rectify any defect or breach of Agreement."

The standard conditions also included a clause which prohibited a customer from withholding payment of any invoice for any reason whatsoever.

The Delivered Material

In February 2006 a truck arrived at site loaded with the roof sheeting.

Cladall's representative noticed that the dimensions of the sheeting did not appear to be uniform and this aroused his suspicions that the sheeting was not in accordance with Cladall's order specification.

It was of course not possible to ascertain with the naked eye whether the material in fact met the specification and any determination of the galvanised content and tensile strength of the sheeting would have required laboratory testing.

The Cladall representative immediately contacted SS  who sent a representative to site. After lengthy discussions between the SS  representative and the SS  factory, Cladall was reassured that the material was indeed the correct material and had all the attributes asked for.

Cladall remained concerned and a Cladall representative himself contacted the SS  factory to double check the position. He was reassured again that the material was the correct material.

Two weeks into the six week installation period Cladall's workmen reported that the roof was showing indentations after being walked on.

Cladall realised that there was a major problem with the sheeting. At this stage Cladall had paid the greater part of the purchase price for the sheeting.

Tests were undertaken on the sheeting which revealed considerable variations in the sheeting. In the face of this Cladall refused to pay the balance of the purchase price. However, SS demanded payment of the outstanding balance.

Court A Quo

The dispute between the parties was taken to the Port Elizabeth High Court for determination.

The issues between the parties were whether SS could rely on the standard conditions quoted above to exonerate it from liability for having delivered non-conforming materials and whether Cladall was obliged in that event to pay the balance of the purchase price.

It was common cause that Cladall had not given a written notice to SS as contemplated in clause 7.3 of the standard conditions.

The Port Elizabeth High Court found in favour of SS and held that it could indeed rely on the relevant clauses to escape liability for its failure to comply with the contract. It consequently held that Cladall had to pay the balance of the purchase price and entered judgment against it accordingly.

SCA Decision

Cladall appealed the finding of the Port Elizabeth High Court to the Supreme Court of Appeal in Bloemfontein.

The SCA reversed the finding of the High Court holding that SS could not rely on the clauses, that Cladall was not obliged to pay anything further for the material concerned and directed that the case should be referred back to the High Court for a determination of the damages that Cladall was entitled to be paid by SS for having delivered the wrong material. In the High Court proceedings Cladall had included a claim for damages for all the costs and expenses it had incurred in having to remove the defective sheeting and replace it with the correct material.

The reasoning underpinning the SCA's decision was simple.

It held that it was clear from the evidence that Cladall had ordered a very specific product and that SS had agreed to provide that product. It was common cause that the bulk of the product delivered by SS, whilst it was indeed IBR roof sheeting, was not of the required thickness, was not full hard industrial strength, had not been galvanised according to the Z275 specification and had not been manufactured and produced according to Mittal standards. Not one of the specific attributes of the roof sheeting agreed upon between the parties had thus been met. The material bore no relation to the goods ordered and was an entirely different and inferior product.

The court stated that the contract could not be performed by SS simply by delivering IBR sheeting irrespective of its specification. It could only be performed by the delivery of IBR sheeting of the required specification.

The court held that, properly interpreted, clauses 6.4 and 7.3 of SS's standard conditions only governed situations where defective goods were delivered by SS to a customer. The clauses could not apply to a situation where the goods delivered by SS were an entirely different product to the goods ordered by a customer and bear no resemblance to what had been agreed between the parties.

Consequently SS had not performed at all in terms of the contract and its reliance on the exclusion of liability clauses concerned was misplaced.


The Supreme Court of Appeal drew the distinction between the situation where material is delivered which is basically in conformity with what has been ordered but has perhaps some defects and the situation where material has been delivered which is so vastly different to what had been contracted for that it is not defective as such but simply a different and wrong material.

If for example the material had conformed to the specification but in certain isolated sheets had not had the required galvanising thickness, then that would have constituted a defect and SS could have relied on its standard conditions to avoid liability.

In the case concerned however the sheeting had failed to measure up to every single important element of the specification and was accordingly something entirely different to what had been ordered.

The court's decision provides contractors with welcome relief from the pernicious effect of exclusion of liability clauses which have all too often been used unfairly as a tool by suppliers to avoid the consequences of their own defective contractual performance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Alastair Hay
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions