Consensus Flashcards
Only conditions where consensus can exist
- parties have serious and true intention
- intentions are identical
- where there is creation of a legal obligation with certain legal action
Categories of consensus
- True consensus
- Assumed consensus
- …By operation of the law
Categories of disclosure (of intention)
- invitation
- offer
- acceptance
(disclosure usually occurs during negotiations, where intention is made clear)
Disclosure: The offer (definition)
- a declaration of intent by prospective party
- contains proposal regarding the contract
- mere acceptance bring contract into being
Requirements for something to be considered an offer
- offeree must be aware of offer
- all stipulations and important elements must be contained in offer
- offer is clear, certain and unambiguous
- no formalities required (unless otherwise stated)
- offer must be made with intention of creating legal obligation
Ways an offer may be terminated
- Rejection
- – (express, doesn’t accept, counter-offer)
- Revocation
- – (revoked = before acceptance, withdrawal - after offeree is aware of offer)
- Lapse of time
- – (not accepted in specified time period)
- Death of offeror/ offeree before acceptance
- Contractual incapacity
- – (offeror/ offeree loses contractual capacity before contract conclusion)
Disclosure: Acceptance
- unqualified declaration of intent
- approval without reservations
- with purpose of reaching consensus
Requirements for something to be considered a valid acceptance
- accepted only by offeree
- clear, certain, unambiguous
- no formalities required unless otherwise stated
- acceptance is identical to terms of offer
- offeree can only accept offer they are aware of
- acceptance only effective once offeror is notified that offer has been accepted
- offeree must have serious intentions
Special offers
- Public offers
- Auctions
- Options
- Negative offers/options (prohibited by CPA, void)
Rules of auction, according to the Consumer Protection Act
- if auction is in reserve, a notice in advance must be provided
- the owner and auctioneer cannot bid at auction unless notice has been given in advance (otherwise could be declared fraudulent)
- when goods are sold in lots, each lot is sold separately
- auction is complete only when auctioneer states its completion
Naturalia
- when consensus is reached expressly or through conduct
- apply automatically
- are not dependent on agreement
Essentialia
- minimum characteristics of a specific contract
- distinguish specific contract from others
- not validity requirements
Incidentalia
Terms agreed to by parties amongst themselves for their purposes.
Consensus through conduct
Declaration of intent made without words or writing but through behaviour (conduct)
Express consensus
Declaration of intent made by words or through writing
Consensus through operation of law
Consensus does not have to be reached on terms that are already stipulated in legislation, common law or trade usage.
Suspensive vs Resolutive conditions
- suspensive condition —> performance can only be claimed after condition is fulfilled
- resolutive condition —> contract remains in existence until the occurrence of an uncertain future event
Suspensive vs Resolutive terms
- suspensive term —> when some or all performances in contract can only be performed after a (un)certain future event happens
- resolutive term —> contract’s existence depends on a (un)certain events occurrence
Assumption and Guarantee
- assumption
- –> both parties assume that a certain fact exists and forms part of the contract
- –> refers to something that has happened in the past (differs from term and condition)
- guarantee
- –> contractual undertaking in regards to the presence or absence of legal fact
Requirements that must be met before a court can read a missing stipulation into the contract
- inclusion of the term must be fair and reasonable
- term must be based on common intention of parties
- only reasonable interpretation of the contract must show that both parties would have still kept the term in the contract had they been aware of its omission.
- the term must be necessary for business efficiency of contract
- clear and unambiguous contents
- inclusion of the term must be desired AND necessary.
Effect of Consumer Protection Act (enforcements)
- right to plain and understandable language
- unfair, unreasonable or unjust terms
- certain transactions, agreements, terms and conditions that are prohibited
- right to return goods
- right to cancel advanced reservations or orders
CPA: Right to plain and understandable language - Factors that determine if consumer could be expected to understand contents of contract.
- context, comprehensiveness and consistency of document
- organisation, form and style of document
- vocabulary, usage and sentence structure “ “
- use of any illustrations (incl. headings)
CPA: Unfair, unreasonable or unjust terms - Terms and conditions that are considered to be unfair, unreasonable and unjust.
- excessively one-sided (in favour of a non-customer)
- so adverse to customer that it is unequitable
- where a consumer relied on false/misleading/deceptive representations
CPA: Prohibited transactions, agreements, terms and conditions - Terms and conditions that are seen to be prohibited.
pg 34 of actual textbook and pg 43 of pdf
Four theories that refer to the four stages of acceptance
- declaration theory
- expedition theory
- reception theory
- information theory
Declaration theory
- states contract is concluded when and where the offeree expresses/declares their acceptance
- no application in our law
Expedition theory
- states contract is concluded when and where the acceptance of the offeree has been sent out to the offeror
Reception theory
- states contract is concluded when and where the offeror receives the offeree’s acceptance
Information theory
- states that a contract is concluded when and where offeror is informed about the offeree’s acceptance
Theories: General rule of South African practice
- information theory is applied as general rule in South African law (when offeror is informed of acceptance)
Theories: Exceptions to general rule of South African law
- If old fashioned way of communication is used (excl. telephone and fax) expedition method is used provided:
- -> offer AND acceptance made through post
- -> offeror does not prescribe another method of acceptance in offer
- -> general postal services is operational
- -> letter of acceptance bears correct address - Ascertainment theory
- -> contract concluded at the place and time acceptance letter was posted - Data message
- -> contract concluded when data message has entered information systems where offeror can retrieve and process it
Factors that influence consensus
- Error (void)
- Misrepresentation (valid but voidable)
- Duress
- Undue influence
- Commercial bribery
- Right to fair and honest dealing
Factors that influence consensus: Error
- error in motive
- error regarding contents or existence of contract
Factors that influence consensus: Misrepresentation
- fraudulent misrepresentation
- innocent misrepresentation
- negligent misrepresentation
Factors that influence consensus: Duress
- vis absoluta —> contracting party become temporarily contractually incapacitated because of fear (null and void)
- vis compulsiva —> intimidated party enters into contact knowingly to prevent potential danger (valid but voidable) - elements on p. 41 of textbook and p50 of pdf
Factors that influence consensus: Undue influence
- valid yet voidable
- requirements:
- -> one party obtained undue influence over other party
- -> influenced weakened powers of resistance and rendered their will compliant
- -> other party used influence in unscrupulous manner
- -> influence induced conclusion of contract
- -> contract must be damaging/detrimental to injured party
Factors that influence consensus: Commercial bribery
p. 41 of textbook
Right to fair and honest dealing
- if CPA is applicable, must apply
- CPA does not override common law
- p. 42 of textbook and p. 51 in pdf
