Contractual capacity

Question 1

What is a void contract?

Answer 1

A void contract is one that is considered invalid from the outset and has no legal effect. It is as if the contract never existed and is not enforceable by either party

Question 2

what is a voidable contract?

Answer 2

A contract that is initially valid and enforceable but may be rendered void at the option of one of the parties

Question 3

What are the requirements a contract to be rendered voidable

Answer 3

A voidable contract is one where the requirements for a valid contract are met but there is a defect in consent of one of the parties.

Question 4

What defects could render a contract voidable

Answer 4

Misrepresentation, duress or undue influence

Question 5

What requires formal consent for a person married in community of property

Answer 5

To alienate/mortgage immovable property, to enter into a transaction as a credit receiver and to bind their self as surety

Question 6

What requires written consent for a person married in community of property

Answer 6

To alienate/cede or pledge any shares BUT not to sell on the JSE, to alienate or pledge capital assets and to withdraw money held in the name of the other spouse

Question 7

What requires informal/verbal consent for a person married in community of property?

Answer 7

To alienate or pledge household furniture, receiving money from spouses trade and a large donation from joint estate

Question 8

What exceptions apply to contracts for couples married in community of property

Answer 8

If the third party does not know or could not reasonably have known that the consent had not be given then the contract is valid
If contracting spouse one that they would not get consent and the estate suffers a loss then on dissolution the affected spouse will be given an adjustment

Question 9

What contractual capacity do spouses married out of community of property have ?

Answer 9

In general each party has unrestricted contractual capacity with regard to their own estate
The only exception is to household necessities

Question 10

What contractual capacity do spouses married out of community of property with accrual have

Answer 10

Unrestricted contractual capacity the it comes to their own estate. Only need consent for transactions affecting the other spouses estate. Both are liable for household necessities

Question 11

What actions require the consent of both legal guardians

Answer 11

• The marriage of a minor child
• Putting the child up for adoption
• The removal of the child from SA
• Application of an SA passport
• Alienation of immovable property

Question 12

What is an assisted contract

Answer 12

The guardian enters into the contract on behalf of the minor or the minor enters into it with the guardians consent. The minor is bound by the contract not the guardian

Question 13

What are the exceptions to an assisted contract

Answer 13

If a contract is inherently prejudicial to the minor it is valid but can be cancelled

Question 14

What is the effect of an unassisted contract under common law

Answer 14

The contract will be deemed as limping. The minor has the sole choice (with guardians consent) whether to enforce the contract (ratification) or not to enforce (repudiation). if the minor chooses to enforce it then they are bound by it.

Question 15

What does repudiation mean

Answer 15

It means that the contract is not binding. It is not void or cancelled.

Question 16

Does ratification have to be formal?

Answer 16

No, ratification can be silent or based off behaviour.No clear opposition to it is deemed to be consent

Question 17

What are the implications of an unassisted contract under the CPA

Answer 17

Under the CPA the contract is voidable which allows the minor to cancel the contract and get back what they put into it.

Question 18

What are the requirements for the CPA to apply

Answer 18

There must be a consumer and supplier. Consumer is a natural person and any juristic person with a turnover of less than 2 million and a supplier is anyone who supplies goods and services in the ordinary course of business

Question 19

What is a fraudulent minor and what are the implications

Answer 19

A fraudulent minor is when a minor lies about their age or lied about having consent. The other party to contract can claim back what they lost under delict if they are able to prove reasonable deception

Question 20

What is the contractual capacity of an insolvent person

Answer 20

An insolvent person cannot dispose of assets in the insolvent estate, cannot without consent enter into contract which may adversely affect the estate or be involved in manufacturing business

Question 21

What happens if an insolvent individual enters into a contract

Answer 21

the contract is voidable if the trustee choses but until then it is valid

Question 22

What is the contractual capacity of the mentally ill or intoxicated

Answer 22

All people are presumed to be sane unless they have been declared mentally ill by the high court

Question 23

What are the exceptions for those who are mentally ill or intoxicated in contract law

Answer 23

If someone has a certificate proving their incapacity then the third party has the onus to prove that the contract is valid because the other party was sane at the time of contracting. If there is no certificate then the onus is on the individual to prove that they were not of sane mind at the time of contracting. For intoxicated individuals they need to prove that they were unaware completely of what they were contracting too.