Consensus (5) Flashcards
An offer + Acceptance =
Consensus
An offer is defined as?
a declaration of intent made by a prospective contracting party (the offeror), that contains the proposals regarding the proposed contract, and that is of such a nature that mere acceptance thereof by the person to whom the offer was addressed (offeree), legally brings a contract into being.
The requirements for a valid offer are that it?
Must be made with the intention to serve as an offer
The requirements for a valid offer are that it?
Must be made with the intention to serve as an offer
What are the elements for a legal contract?
- Must be made with the intention to serve as an offer
- Must be firm
- Must be complete
- Must be noticed to the offeree
- Must be clear, certain and unambiguous
- Must be made to a specific person or group of persons
- Formalities
The requirements for a valid offer are that it?
- Must be made with the intention to serve as an offer
- Must be firm
- Must be complete ( For example, one cannot make an offer to rent property, without specifying the premises,)
- Must be noticed to the offeree (An offer is only complete if it has come to the notice of the offeree.)
- Must be clear, certain and unambiguous (An offer must be clear, certain and unambiguous.)
- Must be made to a specific person or group of persons (An offer must be made to either a specific person or to a group of persons.)
- Formalities
Does an offer constitute a valid contract?
No. An offer merely constitutes a unilateral juristic act, whereas the conclusion of a contract constitutes a bilateral juristic act.
An offer is terminated?
if it is revoked by the offeror before being accepted by the offeree;
- if it is rejected by the offeree;
- if the offeree makes a counter-offer;
- if one of the parties become legally incapacitated (for example, if the offeror is diagnosed with a mental illness);
- by the effluxion of time – i.e. if an offer was only open for a period of time, and the offeree failed to accept the offer within the prescribed time period; or
- by death of either the offeror or the offeree.
All of the following are instances when an offer is
terminated, except?
If there is a death of the offeror only
What is the name of the party to whom an offer is made?
Offeree
What is the name of the party who makes an offer to enter into a contract?
Offeror
Sarah makes an offer to purchase Sipho’s house. What does this offer constitute?
A unilateral juristic act
All of the following are legal requirements of a valid offer except?
It must be ambiguous
The requirements for a valid acceptance are summarised in the following figure
- Serious intent
- The offeree must be aware
- Clear, certain and unambiguous
- Correspond
- Generally, no formalities
- Notice of Offer
What are the three expedition theory regarding a contract?
- Information theory
- Reception theory
- Expedition theory
- Information theory: (which is based on ‘actual and conscious agreement between the parties’ This theory states that the contract enters into force when and where the acceptance by the offeree comes to the notice of the offeror. For example, if the contract is concluded telephonically, the contract will enter into force when and where the offeror hears the acceptance of the offer by the offeree. Equally, a contract that was concluded by means of a fax, will enter into force when and where the offeror reads the notice of acceptance by the offeree.
- Expedition theory (postal contracts = when both the offer and the acceptance are made by means of post While real postal contracts have largely fallen into disuse in today’s commercial world, it is still necessary to be aware of and understand this acceptance theory. The expedition theory states that the contract will enter into force on the date and at the place where the offeree posts the letter of acceptance. There are two exceptions to the application of the expedition theory: if the address is clearly wrong on the envelope; and if there is a disruption in the postal services (e.g. as a result of a strike).
In both of these exceptional circumstances, the information theory will apply to the real postal contract instead.) - Reception theory (‘the facilitation and regulation of electronic communications and transactions’. This means that the contract will enter into force when and where the data message in which the offeree accepts the offer is received by the offeror. Section 23(b) further states that a data message is taken as having been received by the ‘addressee’ (the offeror) when it enters a system designated for receiving such messages, and is capable of being retrieved by the addressee. This does not mean that the offeror must have read the answer, but merely that the offeror must have received the acceptance.
- A data message is defined in section 1 of the ECTA as: data generated, sent, received or stored by electronic means and includes voice, where the voice is used in an automated transaction; and
a stored record.
As such, the reception theory is used when contracts are concluded by means of email, WhatsApp, SMS and the like.
Explain Information theory?
- Telephonic contracts; or contracts concluded by means of fax
- When and where the acceptance comes to the notice of the offeror.
Explain Expedition theory?
- Real postal contracts
- When and where the offeree posts the letter of acceptance.
Explain Reception theory?
- Contracts concluded by means of data message
- When the offeror receives the acceptance of the offer; the ‘where’ is assumed to be at their normal place of residence or workplace.
What information is useful to include on a contract?
When and where the contract was concluded
Elizabeth offers Tom R1400 for his laptop. Tom thanks Elizabeth for the offer, but says that he will accept no less than R1600 for the laptop. What is this an example of?
Counter offer
Which theory states that the contract comes into force when and where the acceptance comes to the notice of the offeror?
Information theory
What is required for an acceptance to be valid?
The acceptance must correspond with the offer
Under which theory does the contract come into force when the offeree posts the letter of acceptance?
Expedition theory
So-called ‘ticket contracts’ refer to contracts that are concluded when one party issues a ticket to the other party that contains?
‘terms and conditions’ of the contract. Perhaps you have seen such terms on. Perhaps you have seen such terms on the back of a plane ticket or a bus ticket?
In terms of the South African common law, a person is bound to the terms of a ticket contract if the following questions can be answered in the positive?
- Does the ticket holder know that there are words on the back of the ticket?
- Does the ticket holder know if the terms on the back of the ticket referred to terms of a contract?
- Did the issuer of the ticket take all reasonable precautions to draw the ticket holder’s attention to the fact that the words on the back of the ticket referred to terms in a contract?
If the answer is ‘yes’ to all three of the above questions, then the ticket holder is bound to the terms, as set out in the reverse side of the ticket.
Give any two examples of ticket contracts.
- Terms on the back of a plane, bus or concert ticket
- Exemption clauses, such as, ‘Park at your own risk when entering the parking garage.’
Identify the three questions that one has to answer in the affirmative, to determine whether or not the terms of a ticket contract were included in the agreement between the issuer of the ticket and the ticket holder?
- Does the ticket holder know that there are words on the back of the ticket?
- Does the ticket holder know that the terms on the back of the ticket, referred to terms of a contract?
- Did the issuer of the ticket take all reasonable precautions to draw the ticket holder’s attention to the fact that the words on the back of the ticket referred to terms in a contract?
Angelina is a client of Fire and Ice (Pty) Ltd. Fire and Ice (Pty) Ltd is a tenant in Green Office Park. Green Office Park is erecting a new building in the office park. One morning, Angelina enters Green Office Park. As she is walking to Fire and Ice (Pty) Ltd’s offices in the designated walk lane, a brick falls on her head. Angelina sustains severe bodily injuries. After an investigation, it is found that one of Green Office Park’s employees was negligent, and caused the brick to fall on Angelina’s head.
Angelina sues Green Office Park for the damages that she incurred. Green Office Park contends that it cannot be held liable, as Angelina, having acknowledged that she saw, read and understood the exemption notice, agreed to enter Green Office Park, on the basis that Green Office Park will not be liable for any bodily harm that she may sustain.
Required:
Explain, with reference to case law, whether or not Green Office Park is likely to succeed with its argument.
The facts are similar to those of Naidoo v Birchwood Hotel 2012 (6) SA 170 (GSJ), in which it was held that an exemption clause that excludes liability for bodily harm in hotels and other public places, has the effect, generally, of denying a claimant judicial redress. As such, the exemption clause would not be enforceable.
What does an ‘exemption notice’ do?
It exempts one of the parties to the contract from liability
What does an ‘exemption notice’ do?
It exempts one of the parties to the contract from liability
What is ‘Park at your own risk’ signage an example of?
Exemption notice
In which example below would you be bound to a ticket contract?
Purchasing a plane ticket from your local travel agent
What would you ask a person to determine if they are bound to a ticket contract?
Did you know there are words on the back of the ticket?
In which example is an exemption notice binding?
A clear and unavoidable liability notice displayed at the entrance of a building
Factors that have an influence on consensus are?
- Mistake (Void)
- Misrepresentation (Voidable)
- Undue influence (Voidable)
- Durress (Voidable)
A mistake, also referred to as an error or fault, is defined as?
is defined as ‘a misunderstanding or a misconception by one or more of the parties regarding certain facts, events or circumstances
A unilateral mistake occurs?
‘where only one party is mistaken, while the other party is aware of his or her mistake’
Example: Busi and Musa enter into a contract of sale. Although Busi is aware of the nature of the contract (i.e. a contract of sale), Musa is under the impression that they are entering into a contract of lease.
A common mistake, on the other hand, is a mistake?
‘that is shared by the parties and differs fundamentally from a unilateral or mutual mistake, because it does not lead to dissensus’
Example: Busi and Musa enter into a verbal contract of sale of a piece of land. Both parties mistakenly believe, as a matter of law, that such a verbal contract is valid and enforceable
A mutual mistake is a mistake?
‘where both parties are mistaken about each other’s intention and are at cross-purposes’
Example: Busi and Musa enter into a contract. Busi thinks that they are entering into a contract of sale, whereas Musa is under the impression that they are entering into a contract of lease.
