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Contract Introduction Slides with Answers

A contract is a legally enforceable agreement between parties that creates obligations, which consist of rights and duties. Valid contracts require agreement, capacity, intention, possibility, certainty, legality, and may involve formalities. The document also discusses theories of contract law, the interaction of contract law with constitutional law, and the Consumer Protection Act aimed at safeguarding consumer rights.

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21 views

Contract Introduction Slides with Answers

A contract is a legally enforceable agreement between parties that creates obligations, which consist of rights and duties. Valid contracts require agreement, capacity, intention, possibility, certainty, legality, and may involve formalities. The document also discusses theories of contract law, the interaction of contract law with constitutional law, and the Consumer Protection Act aimed at safeguarding consumer rights.

Uploaded by

ngimphiwegivenm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Law of

Contra
ct
Introduction
Answer: D
So what is a
contract?
• Not all agreements are contracts.

• A contract is more than just an agreement between two or more parties.

• The extra ingredient that distinguishes contracts from these non-binding


agreements is thus a serious intention to create legally enforceable
obligations (animus contrahendi).

• A contract is therefore an agreement between two or more persons


which gives rise to a binding legal obligation (or obligations) between
the parties.
What is an
obligation?
• An obligation consists of both a right and a corresponding
duty.
• One party (the debtor) has a duty to deliver a performance,
while the other (the creditor) has a right to receive the
performance.
• A contract may create either unilateral or bilateral
obligations.
• Unilateral obligations are those where one party only has
rights in terms of the contract while the other only has
duties (however, both must still agree)
• With bilateral obligations, both parties have rights and
duties.
Answer: B
Answer: D
Requireme
01
nts
for a valid contract
AGREEMENT 02 CAPACITY 03 INTENTION
Agreement between the Contractual capacity (the Serious intention to contract
parties (Offer and acceptance) parties must have the (animus contrahendi)
necessary capacity to
contract)
04 POSSIBILITY 05 CERTAINTY 06 LEGALITY
Possibility of performance (the Certainty (the agreement Legality (the agreement must
obligations undertaken must must have a definite or be lawful)
be capable of performance determinable content, so that
when the agreement is the obligations can be
entered into) ascertained and enforced)
07 FORMALITLIES
Formalities (the form that a
contract may be required to
be in)
FREEDOM OF CONTRACT

The freedom of individuals to enter


into contracts with one another, on

Foundatio
the terms that they choose, without
interference from the state.

ns
of the law of contract SANCTITY OF CONTRACT

Pact sunt servanda


Parties to a contract are must comply
with the terms of the contract

PRIVITY OF CONTRACT

Rights created under a contract are


enforceable only against the other
party/parties to the contract.
Theories The cornerstone of the law of contract is
the meeting of the minds and the
intention to create a contract.
of the law of contract
How do minds meet? And more to the
point, how to we prove that minds have
met?

This question really is, do we rely on a


subjective or objective test when
assessing whether or not the parties to
a contract have agreed?
1. THE DECLARATION THEORY

Theories • Objective
• In terms of this theory, parties are
of the law of contract
bound by the contractual terms
because they have declared their
intention to enter into a binding
There are three main
contract, usually in a formal way.
theories when it comes
to the meeting of minds • The emphasis is on their conduct,
in a contract. viewed objectively. What they really
meant (their subjective mind) is
ignored.
2. THE CONSENSUAL/WILL THEORY

Theories • Subjective
• Here the parties are bound by a
of the law of contract
contract because they intended to
be bound to it.
• This theory focuses on what the
There are three main
parties subjectively intended.
theories when it comes
to the meeting of minds
in a contract.
3. THE RELIANCE THEORY

Theories •
•
Objective-Subjective
The fact that a party can easily escape liability
of the law of contract under the consensual theory may be unfair to
the other party because they have no way of
reading the mind of the other party.
• In terms of the reliance theory, if one party
There are three main
creates the impression that the parties had
theories when it comes
reached consensus, and the other party
to the meeting of minds
reasonably relied on this impression, the parties
in a contract.
will be bound by the contract, even if there is no
subjective consensus.
SOUTH AFRICA

Theories • In South African Contract Law we start with


the consensual/will theory and if that does not
of the law of contract prove successful then move to the reliance
theory.

• The contract will then be upheld on the basis of


a reasonable reliance if one is found to exist.

• This is because our approach to contract is not


wholly subjective; it is tempered by objective
considerations born of a desire to protect
reasonable expectations induced by the other
party.
Answer: B
Answer: Yes
• Contract falls under private
law and in particular the
law of obligations.
• Hence the creation of
obligations (duty and right)

• These obligations are


personal in nature.

• This as opposed to a real


right.

Contract and Private


Law
Constitutio When the interim constitution was
enacted there was a lot of debate about

n
and the law of contract how it would interact with the law of
contract.

This involves unpacking some


terminology:
• Vertical vs Horizontal Application
• Direct vs Indirect Application
Du Plessis v De Klerk 1996 (3) SA 850

• Horizontal but indirect.

Constitutio Barkhuizen v Napier 2007 (5) SA 323 (CC)

n
and the law of contract •
•
Confirmed decision in Du Plessis v De Klerk
Impractical to test the constitutionality of a
contractual term directly against a provision
in the Bill of Rights.
• The proper approach to constitutional
challenges to contractual terms is to
determine whether the term challenged is
contrary to public policy

Hoffmann v South African Airways 2001 (1) SA 1


(CC)
• An example of the court getting involved in
freedom of contract
Consumer Protection Act
• The primary purpose of the Act, as its name implies, is to protect
consumers from exploitation in the marketplace, and to promote their
social and economic welfare.
• More specifically, the Act aims, among other things, to establish a
legal framework for the achievement and maintenance of a consumer
market that is fair, accessible, efficient, sustainable and responsible,
for the benefit of consumers generally; to promote fair business
practices; and to protect consumers from unconscionable, unjust or
unreasonable business practices.
• It is a very wide reaching piece of legislation.
Consumer Protection Act
Of greatest interest are those provisions of the Act dealing with the consumer’s right to fair, just and
reasonable terms and conditions. Certain terms or conditions are prohibited outright, with the result that
they are void to the extent of non-compliance. These include:

• terms aimed at defeating the purposes and policy of the Act, or misleading the consumer, or
subjecting the consumer to fraudulent conduct;
• terms that purport to waive or deprive a consumer of rights under the Act, or to avoid a
supplier’s obligations under the Act;
• a term that purports to limit or exclude the liability of a supplier (or those for whom he or she is
responsible) for harm caused by gross negligence; and
• a term that falsely expresses an acknowledgement by the consumer that no warranties or
misrepresentations were made in connection with the agreement.
Consumer Protection Act
• Where terms are not prohibited outright, they are
subjected to a requirement of fairness and
reasonableness.

• Thus, a supplier must not supply or offer to supply any


goods or services, nor require a consumer to waive
any rights, assume any obligations or waive any
liability of the supplier, on terms that are unfair,
unreasonable or unjust.

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