Termination of Contract

Question 1

Release

Answer 1

Release is when a party frees the other party of their contractual obligation. Release cannot be executed by only one party but must be agreed to by all parties involved.

Question 2

Compromise

Answer 2

When two parties disagree about a contract and aren’t sure what the legal result will be, they might decide to make a compromise. Essentially, one party suggests a compromise to the other, hoping to resolve their disagreement and find a solution.

Question 3

Novation

Answer 3

Novation is when the parties agree to replace an existing valid contract with a new contract.

Question 4

Set-off

Answer 4

if Dolly’s Bakery owes Steve’s Cheeses R1000 for cheese she bought to make pizza, and Steve’s Cheeses owes Dolly’s Bakery R800 for bread he bought to make sandwiches he sells, R800 of the money owed by Dolly to Steve would be cancelled, and Steve’s whole debt to Dolly would be cancelled too

Question 5

merger

Answer 5

A merger is when the debtor and creditor become the same person. Sarah owed John R10 000 for a loan. When they marry in community of property the debtor and creditor become the same estate and terminates the contract as one cannot claim from oneself.

Question 6

Duress

Answer 6

Duress refers to a situation in which someone is forced into taking a particular action or making a decision against their will due to threats, intimidation, or some form of pressure. It often involves the use of fear or harm as a means to make someone do something they would not have done under normal circumstances

Question 7

True Consensus

Answer 7

This kind of agreement happens when parties either explicitly agree or show it through their actions.

Question 8

Assumed Consensus

Answer 8

This consensus is reached when both parties understand certain terms without them being stated. For instance, when you buy a ticket for an open-air concert, you’re considered to have agreed to terms and conditions, even if they’re not all listed on the ticket.