Law of Contracts (4)

Question 1

it is clear that a contract must comply with the following five requirements, in order to constitute a valid contract?

Answer 1

• Consensus
• Contractual capacity
• Legality
• Formalities
• Possibility of performance
• Consensus: This is probably the most fundamental of the requirements, which means that the parties must have the same intention in respect of the terms of the contract, which is also sometimes referred to as a ‘meeting of the minds’.
• Contractual capacity: This refers to the fact that the contracting parties need to be legally able to enter into a valid contract.
• Legality: This is also sometimes referred to as ‘legal possibility’, which means that the contract cannot be unlawful.
  Possibility of performance: Refers to the fact that the parties must objectively be able to perform at the time of the conclusion of the contract.
• Formalities: This means that something more than a verbal contract is required, in order for the contract to be a valid contract.Consensus: This is probably the most fundamental of the requirements, which means that the parties must have the same intention in respect of the terms of the contract, which is also sometimes referred to as a ‘meeting of the minds’.
• Contractual capacity: This refers to the fact that the contracting parties need to be legally able to enter into a valid contract.
  Legality: This is also sometimes referred to as ‘legal possibility’, which means that the contract cannot be unlawful.
• Possibility of performance: Refers to the fact that the parties must objectively be able to perform at the time of the conclusion of the contract.
  Formalities: This means that something more than a verbal contract is required, in order for the contract to be a valid contract.

Question 2

Dineo, a friend of yours, knows that you are studying law. She wants to buy a laptop from a retail outlet. Identify and briefly explain to Dineo the general contractual requirements that must be met, in order to enter into a valid contract?

Answer 2

The following are the general requirements that must be met:

• Consensus: This means that the parties must have the same intention, in respect of the terms of the contract.
• Contractual capacity: This refers to the fact that the contracting parties need to be legally able to enter into a valid contract.
• Legality: This is also sometimes referred to as ‘legal possibility’, which means that the contract can not be unlawful.
• Possibility of performance: This refers to the fact that the parties must objectively be able toperform, at the time of the conclusion of the contract.
• Formalities: This means that something more than a verbal contract is required, in order for the contract to be a valid contract.

Question 3

Patricia advertises for sale two paintings online. One is a still-life painting of a bowl of fruit, while the other depicts a scene at the beach. Paul pays Patricia R 500 for the painting of the fruit. However, Patricia is under the impression that Paul paid her for the beach painting. Why is such a contract invalid?

Answer 3

It does not meet the requirement of consensus

Question 4

The Alienation of Land Act 68 of 1981 calls for a contract for the sale of property to be in writing, otherwise the contract will be invalid. What makes it invalid?

Answer 4

It does not meet the requirement of formalities

Question 5

Tom sells his house to Jessica for R 1 500 000. However, the night before Tom is supposed to hand over the keys a flash flood destroys the house completely. Why is the contract between Tom and Jessica invalid?

Answer 5

It no longer meets the requirement of physical possibility

Question 6

George concludes an agreement with Ronald in which Ronald has to kidnap the son of a wealthy businessman in order for George to demand the payment of a ransom for his release. Why is such a contract invalid?

Answer 6

It does not meet the requirement of legal possibility

Question 7

Billy is eleven years old. He sells his bicycle to one of his friends in order to purchase a new skateboard. Billy’s parents are unaware that he sold his bicycle. What makes the contract void?

Answer 7

Contractual capacity is not complied with

Question 8

Unilateral contracts, such as a contract of donation, only have one debtor and one creditor. Thus?

Answer 8

there is only one obligation that is created between the parties

Question 9

Most contracts are reciprocal contracts, which means that the contracting parties are both?

Answer 9

debtors and creditors; the one contracting party’s rights are the other contracting party’s duties, and vice versa. As such more than one obligation is created between the parties.

Question 10

Define a person?

Answer 10

in the legal sense, as ‘a being, entity or association which is capable of having legal rights and duties’. Persons, in turn, can be described as legal subjects, as they are the bearers of rights and duties.

Question 11

Define Juristic persons?

Answer 11

their legal personality from a general enabling Act, such as the Companies Act 71 of 2008, or from a specific Act, such as the Legal Services Ombud, created by Chapter 5 of the Legal Practice Act 28 of 2014. Thus, companies, close corporations, universities, statutory bodies etc. are examples of juristic persons.

Question 12

Which two company entities are not considered a juristic person?

Answer 12

• Trusts,
• Partnerships

Question 13

What is considered as a legal subject?

Answer 13

• Natural person
• Juristic person
  and after subjective rights, these legal subjects are considered:
• Things
• Performance
• Intellectual Property
• Aspect of personality

Question 14

Explain subjective rights?

Answer 14

• Real rights (e.g. right of ownership)
• Personal rights (e.g. created by a contract or delict)
• Intellectual property rights (e.g. Copyright)
• Personal Rights (e.g. the right to privacy and good name)

Question 15

Performance is defined as?

Answer 15

‘any action [by a legal subject] which amounts to giving something, doing something, or refraining from doing something’ Thus, in the law of contract, performance means that which one contracting party must give (e.g. the article that was bought); do (e.g. render the services in terms of a contract of employment); or refrain from doing, as may, for example, be contemplated in a restraint of trade.

Question 16

What are Debtors and creditors in law?

Answer 16

One looks at it from the person’s perspective, to determine whether a person is a debtor or a creditor in law. Debtors have duties, whereas creditors have rights that they may enforce. As will be seen, in most contracts, a person is both a debtor and a creditor.

Question 17

In law Debtors?

Answer 17

Have a duty that they must perform

Question 18

In law Creditors?

Answer 18

Have a right that they may enforce

Question 19

A nominate contact refers to?

Answer 19

‘a contract which has occurred so often that it earned its own name, and for which specific exclusive legal rules have developed over the ages’

Examples of nominate contracts include contracts of sale, contacts of lease and partnership agreements.

Question 20

Nominate contracts are categorised according to their?

Answer 20

essentialia, which refer to the minimum terms on which the parties to the contract must reach consensus, in order to place the contract into the specific category of contract

Question 21

_____________ are the terms that automatically form part of a particular nominate contract, through the operation of law. The ________ against latent defects, and the warranty against eviction, are __________ of a contract of sale.

Answer 21

• Naturalia
• Warranty
• naturalia

Question 22

Explain Incidentalia?

Answer 22

are terms that the contracting parties include for their own convenience; for example, arranging the date and time of delivery of the article that was bought, or to exclude a naturale of a contract.

Question 23

Define Essentialia? (Essentiale)

Answer 23

Minimum terms on which the parties must reach consensus, in order to place the contract into a specific category of contract (i.e. nominate contract).

Question 24

Define Naturalia? (Naturale)

Answer 24

Included in the contract, through the operation of law.

Question 25

Define Incidentalia? (Incidentale)

Answer 25

Terms that the parties include for their own convenience, or to exclude a naturale from a contract.

Question 26

When a contract is valid, a legal obligation has been created, which means?

Answer 26

that rights and duties have been created. Contracts are valid if all five requirements of a contract have been met.

Question 27

When a contract is void, it means that there is no contract, meaning that?

Answer 27

there is no legal obligation between the parties. When one or more of the requirements of a valid contract have not been met, the contract is void.

Question 28

Explain voidable with regards to contracts?

Answer 28

At times, a contract enters into force, but due to ‘improper conduct or defective process’ during its conclusion, the contract becomes voidable

Question 29

Explain unenforceable with regards to contracts?

Answer 29

If a contract creates legal obligations but the law will not enforce these obligations, such a contract is said to be unenforceable

Question 30

Grant owns the copyright to a poetry collection entitled Pretty Poems. What is Grant’s interest in the copyright recognised as?

Answer 30

A legal object

Question 31

Katherine buys custom furniture from Philip. They agree that Philip will deliver the furniture the following week Wednesday, as Katherine is away on business for the next few days. What is the addition of the contractual term relating to the delivery of the furniture an example of?

Answer 31

Incidentalia

Question 32

What is a human being an example of?

Answer 32

Legal subject

Question 33

Peter threatens to inflict bodily harm on Jeff’s daughter,
Susan, If Jeff does not agree to sell his car to Peter’s daughter Joan. What will this contract be?

Answer 33

Voidable

Question 33

Peter threatens to inflict bodily harm on Jeff’s daughter,
Susan, If Jeff does not agree to sell his car to Peter’s daughter Joan. What will this contract be?

Answer 33

Voidable

Question 34

What type of contract is this an example of: “A contract in which both contracting parties are both debtors and creditors, and therefore where the one contracting party’s rights are the other contracting party’s duties, and vice versa”?

Answer 34

Reciprocal contract

Question 35

Differentiate between the two legal subjects recognised by the South African law?

Answer 35

• Natural persons – i.e. human beings
• Juristic persons – i.e. a company, statutory body, or close corporation

Question 36

Explain the meaning of performance?

Answer 36

Any action by a legal subject that amounts to giving something; doing something, or refraining from doing something?

Question 37

Mpho rents a flat in Illovo from Amber, for a period of 12 months. The rental amount is R 7 000 per month, and has been agreed upon. With reference to the aforementioned, fully differentiate between debtors and creditors, from a legal perspective?

Answer 37

Debtors have duties and creditors can enforce a right, accordingly:

Mpho is a debtor, in that she must pay the rental amount; and she is a creditor, as she is entitled to the use and enjoyment of the flat that she is renting from Amber.
Amber is a debtor, in that she must allow Mpho undisturbed use and enjoyment of the flat; and she is a creditor, as she is entitled to receive the monthly rental amount.

Question 38

When will a contract be valid and when will it be void?

Answer 38

• Valid: When all five requirements have been met.
• Void: When one or more requirements are missing.

Question 39

Differentiate between unilateral and reciprocal contracts?

Answer 39

• A unilateral contract is a contract created by an offer than can only be accepted by performance
• Reciprocal contract is a contract in which the parties enter into agreements mutually, or reciprocally thus making the obligation of one party correlative to the obligation of the other.

Question 40

Explain NOMINATE CONTRACT, civil law?

Answer 40

Nominate contracts are those which have a particular name to distinguish them; as, purchase and sale, hiring, partnership, loan for use, deposit, and the like.