Chapter 9: Multiplicity of Parties

Question 1

Cancellation clause

Answer 1

1) Non-cancellations: Prescribe formalities for cancellation of an agreement
(Writing and signed)

2)Prescribes the procedure for mutual cancellation of the contract.

3) Does not prevent unilateral cancellation for breach of contract.

4)To be enforceable, a cancellation clause requires a non-variation clause,
otherwise the parties could orally agree to vary the cancellation clause.

5) See Impala Distributors v Tanunus Chemical Manufacturing Co (Pty) Ltd

Question 2

When multiple parties to a contract are involved, it becomes important to
determine:

Answer 2

1. The share of liability of each such co-debtor and
2. The share of entitlement of each co-creditor

Question 3

This is dependent on a variety of factors, including:

Answer 3

1. The intentions of the parties.
2. The nature of the contract.
3. The nature of the performance owed under the obligation (whether the
   performance is divisible or not)

Question 4

Divisibility of performance

Answer 4

1) A performance can be either divisible or indivisible.

2) Meaning: under which the whole performance is divided into two or more sets of partial performance

Question 5

Divisibility depends on

Answer 5

1. The nature of the performance.
2. The intention of the parties

Question 6

What does it mean when we say “joint liability”?

Answer 6

1) Joint liability means the shares are equal.

Question 7

When can a person get back the extra money they paid?

Answer 7

1) Debtor has no right to recover the excess from the other Co debtors
unless –
1.2) There is an agreement in effect or;
1.3)The requirement of unjustified enrichments are satisfied.

Question 7

If more than one person is supposed to receive something, how is it divided?

Answer 7

1) Where more than one Co-creator is entitled to receive a divisible
performance:
2) The Co creditors are entitled to claim a proportionate share of
performance this is presumed to be equal.

Question 8

If one person is let off from paying their share, what happens to the others?

Answer 8

1) If a creditor releases one co debtor from his performance:
2) Does not automatically release the other parties from their
obligation

Question 9

Share of liability and entitlement

Answer 9

1)Simple joint liability and entitlement.

2) Joint and several (in solidum) liability or entitlement.

3) Collective joint liability and entitlement.

Question 11

What does “joint and several liability or entitlement” mean

Answer 11

1) Characteristically this has the main feature where each Co debtor is liable for the full amount of the debt, the creditor can claim the full dept from any of the debtors

Question 12

What does “part performance” mean in this context?

Answer 12

Part performance means that part of the dept is discharged.

Question 13

If a debt is R300 and there are three debtors (x, y, z) with one creditor (v),
who can v claim the full amount from?

Answer 13

1) V can claim the full 300 Rand from either of the three after the date becomes
due and payable.

1.2) The one V approaches pays the full amount, it discharges the debts
for the other and therefore V cannot go and claim that amount from
the other two.

Question 14

What happens if one debtor pays the full amount? Does it affect the other
debtors?

Answer 14

1.1) IF a debtor pays the full amount or more than their required share
then.
1.2) They have the right if recourse against the other debtors to recover their proportionate share of the dept.

Question 15

Where co-debtors are liable to make a performance jointly as a collective,
the creditor may not demand performance, in whole or in part, from any of
the debtors individually.

Answer 15

This collective form of liability or entitlement will arise where the
performance is indivisible, and the intention of the parties is that the
liability or entitlement should be based on the collective.

Question 16

What does privity of a contract mean?

Answer 16

1) Only the contracting parties obtain
rights and duties from the contract.

Question 16

Third parties can become involved through:

Answer 16

1) As agents for the principal parties.
2) In the discharge of the obligation created by the contract.
3) As parties to the contract (substitution or acceptance of benefits).

Question 17

Contracting through an agent

Answer 17

1) The principal authorizes another person, the agent, to represent him in aggregating a contract with a third person.

2) The agent then acting behalf of the principal enters into negotiation with third person.

3) If the negotiations are successful the contract that comes into being is between the principal and the third party the agent is not a party to the contract at all, the agent acts as a conduit

Question 18

Relationship between principal and agent

Answer 18

1) This is governed largely by the common-law principles applicable to the contract of
mandate and is supplemented by terms agreed upon by the parties.

Question 19

Relationship between principal and third party

Answer 19

1) If the agent acts within the mandate given, then the principle is bound by such a
contract.

2) However, if the agent acts out of the scope of powers and performs
unauthorized conduct the principle is not bound by the contract.

3)But a third party may have an enrichment claim against the principal for any benefits incurred trough
the agreement