EXAM ANSWERS - LAW OF CONTRACT (PVL3702)

This document contains the full answers for the exam for Semester 1 2023. QUESTION 1 ABC company advertises that they have manufactured a patent medicine. The advert states that if this medication is taken, by any person, according to the manufacturer’s prescription, that person will not become ill with the coronavirus sickness. And the advert further states that the company is so confident of this medication, that if anyone does get sick with this virus, after taking the medication as prescribed, the company will pay that person R50 000. Based on this advertisement, Y purchased the medication, and he took the medication as prescribed by the manufacturer (ABC company). Unfortunately for Y, he still fell ill with the coronavirus. Y approaches you for legal advice as he wants to institute legal proceedings against ABC company. Advise Y if a legally binding contract was concluded between him and ABC company. Discuss fully and refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. Your answer must not exceed two typed pages or three written pages. [25] QUESTION 2 X takes his motor vehicle to Sporty Motors for a service. On his arrival, he is asked to sign a “job card” by the owner. X enquires why he is required to sign the “job card” and the owner explains to him that by signing he is authorising them to conduct the service on his car which will cost R10 000. He signs the “job card” without reading it. While servicing the car, the service manager finds faults on the car (unrelated to the service) and he proceeds to do these additional repairs for a further R8 000. X refuses to pay for the additional repairs and argues that he did not authorise such repairs. The owner of Sporty Motors argues that X is obliged to pay for the work done as the “job card” contains a contractual clause authorising Sporty Motors to do any repairs on the motor vehicle which they deem necessary without asking for the client’s authorisation and the client becomes liable to pay for the repairs in terms of this clause. Advise X on whether he is contractually liable to pay Dodgy Motors R8 000 for the additional repairs. Discuss fully and refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. Your answer must not exceed two typed pages or three written pages. [25] QUESTION 3 D and E concluded a contract for D to manufacture cable trays for an electrical support system, for R100 000. The parties agreed to certain strict specifications that D will use to manufacture the cable trays. When D completed the manufacturing process and delivered the cable trays to E, E noticed that the cable trays did not completely comply with the strict specifications both D and E agreed to. E nevertheless decided that he can still use the cable trays, and E contracted with Z to make a minor adjustment to the cable trays to ensure that the cable trays comply with the strict specifications required. E paid Z R20 000 for the work Z did. E refuses to pay any money to D for the work done by D. Advise D if he can recover any amount from E, and if so, on what basis. Discuss fully and refer to case law. Note that E does not commit breach of contract by refusing to pay D. Do not apply the Consumer Protection Act 68 of 2008. Your answer must not exceed two typed pages or three written pages. [25] QUESTION 4 Joanne goes to XYZ car dealership to buy a new car and she concludes a contract with the dealership for the purchase of the car for R250 000. The manager at the dealership informs her that she is lucky as it is the last one available in the model that she chose. And the manager further informs her that they will only get delivery of this model next month, and that the new purchase price will be R290 000. On this basis, Joanne concluded the contract with the dealership on 1 February for the purchase price of R250 000, as she did not want to pay a higher price the following month for the same model car. With reference to the contract terms, Joanne was to pay for the car by 15 February, and on 9 February Joanne paid the full purchase price to XYZ car dealership. On 10 February when Joanne visits the car dealership, she is told by the manager that they received a higher offer for the same car from Mike, and that they sold the car to Mike. Joanne was informed that Mike had already paid for the car and had taken delivery of the car, and furthermore, the car was already registered in Mike’s name. The manager apologised to Joanne and explained that the offer that they received from Mike was so good that they could not refuse it. It was later established that Mike was not aware that he took delivery of the car that Joanne purchased. XYZ car dealership subsequently offers to sell Joanne a car from the new fleet that will arrive in March for R290 000. Joanne wants to institute a claim for damages against XYZ car dealership. Advise Joanne on the prospects of success for such a claim, and whether she can claim any amount from XYZ dealership. Discuss fully. Do not apply the Consumer Protection Act 68 of 2008. Your answer must not exceed two typed pages or three written pages. [25]