Chapter 3 - The law of contract Flashcards
Definition of a contract
A mutual agreement between two parties with an intention of creating a legal obligation.
Condition is that parties must INTEND to bring into existence a legally enforceable obligation.
Agreement must comply with the formalities of a contract.
Concepts of an Obligation
An obligation is a legal relationship comprising of rights and duties between the legal subjects.
Contractual obligation: created through agreement of parities.
Delictual Obligation: when a legal subject wrongfully without justification intentionally or negligently infringes a recognized right or interest.
**Requirements for the Formation of a valid contract
C C L P F
1- must be consensus
2- capacity to contract for both parties
3- agreement must be legally possible
4- physically possible
5- formalities must be complied with
Therefore a VALID contract COMPLIES with ALL the requirements and is binding and enforceable on all parties.
Void Contracts
A void contract is an invalid contract that cannot be PERFORMED OR COMPLETED.
These contracts are void from the moment they are concluded.
These contracts are usually illegal of nature
Voidable contracts
Considered legal but the MANNER in which CONSENSUS is OBTAINED is improper.
The innocent part has the power to set the contract aside, enforce it or if applicable claim damages.
Examples: Kelly is 17 years old and she enters into an agreement with a bank to open a savings account.
- Sally and Dale conclude a contract of sale in terms of which sally sells her car to sale. Dale is under the impression that Sally is selling her mountain bike to him.
Unenforceable contracts
A valid contract but cannot be enforced.
The contract remains valid but imposed no legal obligation for a party to perform.
Ex: Ted and Mike watch a soccer match on television. They bet 10000 on the outcome. Mike agrees. Mike loses the bet but refuses to pay R10 000.
Freedom to Contract
One is generally free to choose with whom and on what grounds he /she wants to contract.
As long as it is legal and lawful.
Statues that are important to the freedom to contract:
- The constitution
- Promotion of equality and prevention of unfair discrimination Ac t
Electronic Contracts
Electronic communications and Transactions Act
- applies to all electronic commercial or non commercial contracts.
- Data Messages ( sent, received and stored by electronic means)
ECT aims to ET and facilitate legal certainty for ET
Trade conducted using electronic means.
Consumer Protection Act
Provides protection for consumers as they contract in a daily basis.
Excluded transactions of CPA:
G/s promoted or supplied by the state
Consumer is a jurisdiction person while asset value /turnover equals or exceeds 2 million
Transaction constitutes a credit agreement under the NCA
Consumer rights in Terms of the CPA
Right to equality
Right to privacy
Right to choose - cooling off period, cancel reservations
Right to disclosure of information
Right to fair, just and honorable terms
Right to fair value, good quality and safety
Institutions dealing with breaches of the CPA
The consumer commission
- disputes resolutions between consumers and suppliers
The consumer tribunal
- hears complaints against alleged prohibited activities and makes rulings
