Chapter 6

Question 1

What are void contracts?

Answer 1

A contact is considered void when any one of the requirements of the a contract or not satisfied.

Question 2

What happens when a contract is void, in the parties be forced to perform in terms of the contract?

Answer 2

When a contact is void, the parties cannot be forced by law to carry out the terms of the contract. The law of unjustified enrichment is used and both parties give back what they received and it is as if they never entered the contract.

Question 3

Define a voidable contract.

Answer 3

A voidable contract is a valid contract and will remain in force until set aside by the innocent party after proving the requirements for misrepresentation, duress or undue influence.

Question 4

How long does the innocent party have to set aside a voidable contract?

Answer 4

The innocent party has a reasonable time, if they choose to do nothing, they lose their right to set the contract aside because it is assumed that they have chosen to keep the contract going.

Question 5

Are contracts void or voidable due to a lack of agreement?

Answer 5

Void

Question 6

When a contract is void because of a lack of agreement, we refer to the problem as a mistake, what are the two types of mistakes?

Answer 6

Unilateral and common mistake

Question 7

Define a unilateral mistake.

Answer 7

A unilateral mistake is where the parties misunderstand each other, they are not thinking the same thing.

Question 8

Unilateral mistakes can only make a contract void if the mistake is…?

Answer 8

Material

Question 9

What is a material mistake?

Answer 9

A material mistake is a mistake that has influenced the mistaken party’s decision to enter the contract, they would not have entered the contract if they had known the truth.

Question 10

When will a contract be void because of unilateral mistake?

Answer 10

When the mistake was material and there was no reasonable reliance by the other party.

Question 11

What are some examples of a material mistake?

Answer 11

Error in the subject matter of the contract, mistake about the type of contract, mistake about the identity of the person with whom the contract is being concluded - if applicable.

Question 12

What are the two instances in which no reasonable reliance by the other party occurs?

Answer 12

When the other party missed with the mistaken party
When the other party was aware or should have reasonably been aware that the mistaken party was mistaken.

Question 13

Define a common mistake and state the two legal requirements for a common mistake.

Answer 13

A common mistake happens when both parties share common believe about a certain fact that is not true.
The legal requirements for a common mistake are:
The mistake should be material.
The mistake should be shared by both contracting parties.

Question 14

What does rectification mean?

Answer 14

Rectification means to correct an error in a written document.

Question 15

What are the 6 requirements for misrepresentation to make a contact voidable?

Answer 15

The misrepresentation must be:
1) Untrue
2) About a fact.
3) Material.
4) Made by one of the contracting parties.
5) The intention must be to induce the other party to contract.
6) The effect must be to induce the other party to contract.

Question 16

To sue someone for misrepresentation in the law of delict, you need to prove the following:

Answer 16

• There was wrong for misrepresentation.
• The innocent party suffered a loss.
• The loss was caused by the misrepresentation.
• The misrepresentation was the fault of the person making the statement.

Question 17

To sue someone for misrepresentation in the law of delict, you need to prove the following:

Answer 17

• There was wrong for misrepresentation.
• The innocent party suffered a loss.
• The loss was caused by the misrepresentation.
• The misrepresentation was the fault of the person making the statement.

Question 18

Explain duress.

Answer 18

When a person agrees to a contract because they have been threatened, then their consent to the contract is flawed because it was given under duress. Such a contact is voidable.

Question 19

Explain undue influence.

Answer 19

Undue influence occurs when one party exerts such an influence over the other contracting party that the other party is not able to think rationally for themselves.

Question 20

What are the 5 requirements for the contract to be voidable due to undue influence?

Answer 20

1) One contracting party had influence over the other contracting party.
2) The influence must have weakened the ‘weaker’ party’s powers of resistance.
3) The stronger party must have used their influence in a corrupt way.
4) The weaker party would not have entered the contract in the absence of influence.
5) the contract was not in the best interest of the weaker party.