BUSL6222 LU6
BUSL6222 LU6 – Terms of the
Contract
Chapter 8 – Contents of a contract
8.1 Identifying terms by their role
“term” = clause or provisions in a contract which sets out the respective rights,
duties and obligations of the parties
Contractual terms are legally binding on the parties
3 types of terms according to their role in the contract:
1. Essentialia
- Terms that id a contract as a specific contract
2. Naturalia
- Terms that are implied into a specific contract by law
3. Incidentalia
- Terms that the parties have agreed to
8.1.1 Essentialia
The essentialia are the essential terms that define what type of contract it is.
These terms must be agreed on - otherwise, the contract can’t exist as that
specific kind of contract.
In other words, essentialia = what makes the contract what it is.
For a lease contract, the parties must agree on:
The object being leased (e.g. the house, car, etc.)
The length of the lease
The amount of rent
If these aren’t agreed upon, the contract isn’t a valid sale or lease — it’s just an
incomplete agreement.
8.1.2 Naturalia
The naturalia are the automatic terms that the law adds to a contract once it’s
recognized as a specific type of contract. These are the normal rights and duties
that come with that type of agreement — even if the parties don’t mention them.
In a lease, the law automatically includes the common law duties of the landlord
(lessor) and the tenant (lessee).
However, parties can change or remove some of these legal defaults if they both
agree.
Naturalia = what the law automatically includes unless changed by the parties.
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, BUSL6222 LU6
8.1.3 Incidentalia
The incidentalia are the extra terms that the parties add themselves to suit their
specific needs.
They are not essential (essentialia) or automatic (naturalia) — they are optional
additions.
1. When selling a house, the parties agree that some furniture will be
included in the sale.
2. When renting an apartment, the landlord agrees to furnish it fully as part
of the lease.
Incidentalia = extra, optional terms that the parties choose to include.
8.2 Identifying the terms by how they become a part of a contract
2nd way we classify terms is according to how they become part of the contract.
Terms incorporated into a contract can be:
- Express
- Implied
- Tactic
- Imposed
8.2.1 Express terms
Express terms are the parts of a contract that are clearly stated — either spoken,
written, or even shown through conduct (actions). Basically, these are the terms
that the parties openly agree on when making the contract.
- If two people agree in writing that the price of a book is R200, that’s an
express term.
- If you ask a store assistant, “Will you deliver this fridge for free?” and they
nod their head in agreement, their action (conduct) counts as an express
term too.
Express terms are the starting point when deciding what each party’s rights and
duties are in a dispute.
Rules That Help Identify Express Terms
1. Parol Evidence Rule
- Once a contract is written and signed, it’s seen as the final version of
the agreement.
No one can bring in outside evidence (like prior conversations or verbal
promises) to change or contradict what’s written.
- This rule helps separate representations (pre-contract talk) from actual
express terms.
2. Caveat Subscriptor (“Let the Signer Beware”)
- If you sign a contract, you’re legally bound by it — even if you didn’t read
it or didn’t understand every part.
2
BUSL6222 LU6 – Terms of the
Contract
Chapter 8 – Contents of a contract
8.1 Identifying terms by their role
“term” = clause or provisions in a contract which sets out the respective rights,
duties and obligations of the parties
Contractual terms are legally binding on the parties
3 types of terms according to their role in the contract:
1. Essentialia
- Terms that id a contract as a specific contract
2. Naturalia
- Terms that are implied into a specific contract by law
3. Incidentalia
- Terms that the parties have agreed to
8.1.1 Essentialia
The essentialia are the essential terms that define what type of contract it is.
These terms must be agreed on - otherwise, the contract can’t exist as that
specific kind of contract.
In other words, essentialia = what makes the contract what it is.
For a lease contract, the parties must agree on:
The object being leased (e.g. the house, car, etc.)
The length of the lease
The amount of rent
If these aren’t agreed upon, the contract isn’t a valid sale or lease — it’s just an
incomplete agreement.
8.1.2 Naturalia
The naturalia are the automatic terms that the law adds to a contract once it’s
recognized as a specific type of contract. These are the normal rights and duties
that come with that type of agreement — even if the parties don’t mention them.
In a lease, the law automatically includes the common law duties of the landlord
(lessor) and the tenant (lessee).
However, parties can change or remove some of these legal defaults if they both
agree.
Naturalia = what the law automatically includes unless changed by the parties.
1
, BUSL6222 LU6
8.1.3 Incidentalia
The incidentalia are the extra terms that the parties add themselves to suit their
specific needs.
They are not essential (essentialia) or automatic (naturalia) — they are optional
additions.
1. When selling a house, the parties agree that some furniture will be
included in the sale.
2. When renting an apartment, the landlord agrees to furnish it fully as part
of the lease.
Incidentalia = extra, optional terms that the parties choose to include.
8.2 Identifying the terms by how they become a part of a contract
2nd way we classify terms is according to how they become part of the contract.
Terms incorporated into a contract can be:
- Express
- Implied
- Tactic
- Imposed
8.2.1 Express terms
Express terms are the parts of a contract that are clearly stated — either spoken,
written, or even shown through conduct (actions). Basically, these are the terms
that the parties openly agree on when making the contract.
- If two people agree in writing that the price of a book is R200, that’s an
express term.
- If you ask a store assistant, “Will you deliver this fridge for free?” and they
nod their head in agreement, their action (conduct) counts as an express
term too.
Express terms are the starting point when deciding what each party’s rights and
duties are in a dispute.
Rules That Help Identify Express Terms
1. Parol Evidence Rule
- Once a contract is written and signed, it’s seen as the final version of
the agreement.
No one can bring in outside evidence (like prior conversations or verbal
promises) to change or contradict what’s written.
- This rule helps separate representations (pre-contract talk) from actual
express terms.
2. Caveat Subscriptor (“Let the Signer Beware”)
- If you sign a contract, you’re legally bound by it — even if you didn’t read
it or didn’t understand every part.
2
