Law of Obligations (3) Flashcards
An obligation implies?
that you have to do something, or that you must perform a certain task.
An obligation creates?
a legal bond between two (or more) persons. You now owe the other person something, and they can claim it from you in terms of law.
True or false: Joanne and Miriam agree to go to the cinema on Friday at 19h00. Joanne does not arrive and Miriam is forced to watch the movie by herself. Miriam can take Joanne to court for not keeping her promise.
False. They must have the necessary intention to be legally bound. This is a natural obligation.
True or false: Gary and Woody have a game of golf. They make a bet that the loser must buy a round of drinks at the pub. Gary loses and refuses to buy Woody a drink. Woody can sue Gary.
False. They must have the necessary intention to be legally bound. This is a natural obligation or ‘gentlemen’s agreement’.
True or false: Elwyn finds an advert on Gumtree for a PlayStation 4 being sold at R 2 000. He contacts the owner, pays her the R 2 000 via EFT, but she refuses to deliver the PlayStation 4. Elwyn can take her to court.
True. They had the necessary intention to enter into a sale contract. This is a civil obligation.
True or false: A delict forms part of the law of obligations because you are obligated to sue someone if they damage your property.
False. A delict forms part of the law of obligations, because if you damage someone else’s property and they take you to court, then you are obligated to compensate them for their loss.
What is a contract?
A legally binding agreement, written, oral or flowing from conduct, to give, do or refrain from doing something.
Contracts are important because it legally binds them to the terms of an agreement
A contract can be written or?
oral or flowing from conduct
A contract can be written or?
oral or flowing from conduct
What are the five requirements for a valid contract?
- Consensus
- Contractual capacity
- Legal possibility
- Physical possibility
- Formalities
All laws below are included as Private law, as a branch of South African law, except?
Criminal law
Requirements for the conclusion of a valid and enforceable contract include all the options below except?
Causation
On his way home from a party, Regan drives into his neighbour’s mailbox. Regan will be liable to pay his neighbour R 500 for the damage he caused. This is an example of the law of obligations because it operates in which field?
The law of delict
Sipho accidentally deposits his rent into the wrong bank account. The bank account holder refuses to transfer the money back to Sipho. This is an example of the law of obligations as it operates in which field?
The law of unjustified enrichment
Ramona sells her car to her friend Sarah. Ramona informs Sarah that the car is in a good working condition, and that it is a 2016 model. However, after Sarah has paid Ramona, and she receives the car, Sarah discovers that it is a 2014 model. Which requirement is not met in the contract between Ramona and Sarah and makes it an invalid contract?
Consensus
Explain Consensus?
Consensus is arguably one of the most important requirements, as it is the premise from which a contract is formed. As simple as it sounds, a contract cannot exist unless both parties agree on the same thing.
Explain Offer?
There must be a serious intention to form a contract. You must want to form a contract in order to satisfy this requirement. If a party merely wants to enter into negotiations with the intention of hopefully later concluding a contract, then that conduct does not constitute an offer to form a contract.
Offers do not last forever and will eventually lapse
Explain acceptance with regards to the law of contracts?
Once an offer is made, it is up to the other party to accept it or not.
The requirements for a valid acceptance are as follows:
- It must only be accepted by the offeree
- Acceptance must be made with the serious intention to form a contract
- It must be made at the time, and in manner and place that the offer stipulates
- It must be unqualified and unambiguous
Only once all the above requirements have been satisfied, can it be said there is a valid offer and a valid acceptance, and now the parties have consensus
Only once all the above requirements have been satisfied, can it be said there is a valid offer and a valid acceptance, and now the parties have consensus. Explain these requirements?
- It must only be accepted by the offeree
- Acceptance must be made with the serious intention to form a contract.
- It must be made at the time, and in the manner and place that the offer stipulates
- It must be unqualified and unambiguous
- It must only be accepted by the offeree: The same applies for when an offer is made to a group of individuals. Any person from that designated group may accept. A person to whom the offer was not made, cannot accept it.
- Acceptance must be made with the serious intention to form a contract: Much like an offer, the offeree must be aware that what is accepted to, will form a contract. If the offeree does not have the intention to form a valid contract, then the contract resembles that of a gentleman’s agreement.
- It must be made at the time, and in manner and place that the offer stipulates: If the offeror stipulates in the offer as to when, where and how the acceptance should be made, then the offeree must satisfy those requirements for a valid offer and acceptance to come into being.
- It must be unqualified and unambiguous: It must be clear and certain that the offeree is accepting the offer on the same terms set out by the offeror. Remember, that if the offeree has their own terms, then that is in fact a counter-offer, which the other person can choose to accept or not.
There are four general theories of when a contract comes into being, what are they?
- Reception theory
- Information theory
- Expedition theory
- Declaration theory
- Reception theory: An agreement is concluded when the offeror receives notice of the offeree’s acceptance.
- Information theory: An agreement is concluded when and where the offeror is informed of the acceptance by the offeree.
- Expedition theory: This theory only applies when letters are sent via post, which in modern times is becoming far less common.
- Declaration theory: This theory states that an agreement exists when and where the offeree expresses their acceptance
The four general theories of when a contract comes into being are?
- Reception theory
- Information theory
- Expedition theory
- Declaration theory
- Reception theory: An agreement is concluded when the offeror receives notice of the offeree’s acceptance. In terms of this theory, if a letter or email is sent, where the offeree accepts the offer, then the offeror does not even need to read the email for the offer to be accepted. As long as the email amounts to an acceptance of the offer, then an agreement will have been concluded. In terms of this theory, Joey will have a right to the laptop even though Andiswa did not read Joey’s email, because his email amounted to an acceptance of her offer, and was sent before Unathi accepted it.
- Information theory: An agreement is concluded when and where the offeror is informed of the acceptance by the offeree. If it is in person or over the phone, then the offeror is informed immediately that the offer is accepted, and therefore the agreement is concluded. But what if, like in the previous Example section, the offeree received a letter beforehand, did not read it, but accepted, another offer? In that case, the person who wrote the letter is prejudiced, as this theory states that it is only when the person learns of the acceptance (Matzukis, 2014: 228). If Andiswa never read the email, she was not informed, and therefore the contract was not concluded. Joey would have no claim to the laptop in terms of this theory.
- Expedition theory: This theory only applies when letters are sent via post, which in modern times is becoming far less common. This theory states that a contract is concluded when the offeree puts their letter of acceptance in the postbox. Therefore, if a person writes a letter accepting the offer, but only sends that letter three days later, then this theory states that the contract is formed only at the time that the letter was actually put into the postbox, and not three days before, when they actually wrote the letter. Therefore, had Joey sent a letter instead of an email, but posted the letter on the Wednesday, then the contract still would have come into existence.
- Declaration theory: This theory states that an agreement exists when and where the offeree expresses their acceptance (Matzukis, 2014: 228). Compare this with the expedition theory discussed above. In terms of this theory, if Joey decides on Wednesday that he wants to accept Andiswa’s offer, but does not send the email yet, then in terms of this theory, the contract is formed when he expressed his acceptance, despite not yet sending the email. But what if Unathi decided on Tuesday that she would accept it, wrote a message to Andiswa on Tuesday via WhatsApp but decided to rather wait and tell her on Thursday? Well, in terms of this theory, Unathi expressed her interest first, and therefore is entitled to the laptop. This theory is not widely accepted in South African law.
What theory states that a contract comes into being as soon as the offeree puts his or her letter of acceptance in the post-box?
Expedition theory
If an offeree does not have the intention to form a valid and enforceable contract, what sort of understanding is formed?
A gentleman’s agreement
What characteristics are required for a valid acceptance to take place?
Unqualified and unambiguous
(Not open to one and more than one interpitation)