Course: Commercial Law 213

Work: Test 1

Answer Specimen
NOTE: This specimen is only a guide!!! Any approach in answering as long as it deals with all
the relevant topics and answers is acceptable.

Question 1

With reference to case law clearly and fully discuss what is meant by damages and what must a
claimant satisfy to successfully claim for damages.
[25 marks]
Damages are defined as the pecuniary compensation which is paid to a victim by the defaulter when
parties are in a contract. The compensation by the defaulter is paid to make good any loss suffered
by the victim between the contracting parties. The victim must prove the damages or patrimonial
loss suffered, which would have been caused by the breach of the contract.

The patrimonial loss is shown by either showing loss in the diminution of the actual asset known as
Damnum emergence. Or by showing that it was loss on the profits, that would have been made if
the breach did not happen. This loss is also known as Lucrum cessans.

If a party to a contract therefore wishes to claim for damages successfully, they need to prove that
loss was sustained (damnum); that the loss was caused by the breach of the defaulting party; that the
loss was foreseeable or foreseen at the time the parties entered into the contract, and that the
claimant took all reasonable steps to minimize the loss.

According to the Albertyn case, a farmer took his tractors for repairs for them to be ready for the
ploughing season which was about to start. Albertyn told the garage people that he wanted the
tractors ready as soon as possible for ploughing. The garage unfortunately took a long time to repair
the tractors, and Albertyn sued them for damages from loss of harvest. The Courts gave Albertyn
the damages and held that the loss was foreseeable at the time the parties went into a contract. From
this case we see that Albertyn did suffer damages which were also a result of the breach of the
contract by the garage people.

In another decided case of Victoria Falls, a power company promised to supply the mining
company with electrical power to run a new plant, and the parties had agreed this would happen at a
specific date. Because the power company was the company supplying electrical power in the area
it stated that they had to supply the power without fail because this would cost the mining company.
The Power company failed to supply as agreed, work at the mine stopped and this caused huge loss
to the mining company, and Victoria Falls was sued for damages. The court held that the loss was
foreseeable and ordered Victoria Falls to pay for the damages. However, the Court did not allow for
all the damages to be paid to the power company because it held that they could have minimized the
loss they suffered if they continued to use their old plant.

From this case it is clear that the claimant needs to do everything to minimize the loss being
suffered and not just sit back in order to be successful in their claim for damages.

Question 2
On a Sunday afternoon while sitting on her doorstep and enjoying the sun, Zenani hears on the radio
that the new beauty treatment store ‘Siyabangena’ in town is offering E5, 000.00 to anyone who
would use their new facial product and get a bad rash reaction from using their well tested and
approved product. Zenani rushes there first thing Monday morning buys the product and starts using
it. Three weeks later after using the product, Zenani develops a bad rush.

She has approached you for advice on her rights based on the issues above.
[25 marks]
I would advise Zenani that her case is one that deals with issues of acceptance in contracts, where
we need to determine whether there is a valid contract between her and the new beauty treatment
store Siyabangena that would result in legal obligations. Zenani must be made aware that a valid
contract is an agreement between two or more people binding in law wherein they agree to do or not
to do something thereby giving rise to legal rights and obligations.

In her case I would advise that, yes, she has a legally binding agreement with Siyabangena, because
her agreement emanates from a contract that was offered by Siyabangena through an advertisement
which also had a reward to the general public, which includes her. And as part of the public to
whom this offer was made, she did accept the offer made by the store. She must understand that in
law, a valid offer is a serious proposal made by an offeror to the offeree, inviting the offeree to
contract on the terms suggested. So the advertisement made by the store with an offer of a reward of
E5,000.00 to anyone who would use their facial product and get a bad rash was indeed a valid offer.
It is also important to note that Zenani also made a valid acceptance to the offer made by the store
when she actually went to the store on Monday to buy and use the product as instructed. An
acceptance is a clear expression by the offeree of her willingness to contract with the offeror on the
terms suggested, and this is what Zenani did.

A similar decided case that would help Zenani see how the law applies in her case is that of
Carbolic Smokeball where the company advertised that it would pay £100 to anyone who would use
their smoke ball and after using it get influenza. Mrs Carlill bought their smoke ball and followed
the instructions and still got the influenza and she sued the company to get the reward promised.
The court held that she was entitled to the reward as such an advertisement that had a reward
constituted a valid offer.

So my advise to Zenani would be that she must sue Siyabangena and demand that she be also paid
the E5,000.00 reward as this was also a valid offer which she accepted and was also entitled to the
reward just like in the Smokeball case. So she would be exercise her right properly by suing the
store for the reward, and she would be successful.