Understanding the Importance of a Domicilium Clause in Your Contracts

The innocuous little domicilium clause. We’ve all signed a contract containing one, whether we noticed it or not. The domicilium clause is a standard clause in most written agreements, which effectively specifies how communications, notices, legal processes and the like are to be served on the receiving party.   Typically, the contract provides for a party to identify a physical address that is nominated as the ‘domicilium citandi et executandi’ – or the address at which the party will accept the service or delivery of official documents related to the contract. Often this clause includes a deeming provision, for example the assumption that the letter will be delivered within eight days after being mailed by registered post. That’s all well and good; until the time comes when a person needs to serve something really important on the other party. Like a termination notice, demand letter or summons. That’s when things can fall apart. For example:  

• The other party may have moved, without giving a change of address.
• The South African Post Office may be on strike, again. Or just annoyingly slow. Or misplace the letter.
• The post office may not provide delivery services to that address.
• The address may be incomplete, ambiguous or contain an error.
• Where a party’s attorney or accountant’s address has been nominated, the attorney or accountant may have moved, or no longer be the party’s service provider.

  The thing about the domicilium clause is that if the contract contains one, the court will expect strict compliance with its provisions. Take for example a case that came before the court in 2015: an agreement required that summons be served at a particular address, to a specific floor, and marked for the attention of a particular person. In due course a summons was served, at the correct address – but the name of the addressee was omitted, and the document was delivered to a different floor. The defendant seized upon the opportunity to challenge the service of the summons. The court held that as the summons had not been delivered strictly in accordance with the contract it could not be considered proper service. This was a rather costly mistake on the part of the plaintiff. A mistake that could easily have been avoided by ensuring that the terms of the contract were strictly adhered to.   Some possible solutions to avoid unintentionally breaching the domicilium clause include the following:

• Include a variation of domicilium clause, allowing parties to change their address on written notice;
• Allow for alternate methods of delivery where possible, eg. postal address or telefax;
• Require all correspondence to be sent by email in addition to the chosen delivery method;
• Include a provision that any correspondence actually delivered is deemed proper service.

  Above all:

• when drafting, negotiating and signing a contract, make sure that the domicilium clause is suitable for your purposes; and
• before sending an important document or notice to the other party, read your domicilium clause to ensure compliance.

 

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.