Chapter 7 : Formalities

Question 1

What is formalities?

Answer 1

It means the external, visible form to which a contract should be reduced. It can take different forms. Usually it consists of the contract being reduced to writing and being signed by the parties, or a formal act like notarial execution or registration of the contract.
Formalities are only occasionally required for the validity of a contract, and that they are not required as a general rule for all contracts.

Question 2

Name the two types of formalities

Answer 2

Those required by legislation and those laid down by the parties themselves

Question 3

Explain formalities required by legislation

Answer 3

The Alienation Land Act 68 of 1981 provides that a contract for the sale, exchange or donation of land should be writing

Question 4

Discuss formalities required by parties and their motivations in oral contracts

Answer 4

Sometimes parties negotiate their contract orally and agree that the contract shall formally be put in writing.
They motives may be:
▪️that writing shall be a formal requirement for the validity of the contracts
▪️The writing shall merely serve as proof of their oral contract

Question 5

What is Variation of Formal Contracts ?

Answer 5

Sometimes parties later wish to amend their written contract and the question is whether this can be done orally.

Question 6

Distinguish between different types of variations of formal contracts

Answer 6

Where the law requires formalities
- in such a case, any variation must meet the formal requirements

Where the parties agree to formalities
The contract may indeed be varied orally unless they have also agreed that all variations should be in writing. It common trade usage to include a non-variation clause in written contracts, that states that any amendment, termination or cancellation of the agreements will not be valid unless recorded in writing and signed by the parties thereto. Parties must take heed not to accept that verbal settlement agreement during meetings, or unsigned minutes of the meetings, are binding upon them. The clause is enforceable and not per se unconstitutional. The clause will but be unenforceable if it appears that the nature or the effect of the clause is contrary to public policy

Question 7

Name the different types contents of written contracts

Answer 7

Interpretation of contract and terms
The parol evidence rule
Rectification

Question 8

Explain rectification

Answer 8

It’s purpose the prevention of an unfair application of the parol evidence rule, is rectification or correction of the written document

If a written contract incorrectly reflects the preceding oral agreement or the true intention of the parties due to an oversight or a mistake, the parties can claim the correction or rectification of the written document in order to reflect their agreement correctly. The person claiming rectification must prove that the parties had a particular intention and that the document does not reflect it correctly. It is not necessary to prove a preceding valid contract. It is only necessary to prove that the parties reached agreement previously and that the ensuing written contract reflects it wrongly. For this reason rectification is even possible where the law requires formalities.
Either party may ask for rectification. The plaintiff may do it to get his claim in order. Likewise a defendant may request rectification of a document for purpose of his defence