QUESTION 1
State and briefly discuss any five (5) requirements for the formation of a valid
contract. [10]
A contact may be defined as an agreement entered into by two or more persons with
the intention of creating a legal obligation or obligations. A further element exists –
namely, that the agreement should be one that the law recognizes as being binding
on the parties.
Requirements for a valid contract:-
1. Consensus: the minds of the parties must meet (or at least appear to meet) on
all material aspects of their agreement;
2. capacity: the parties must have the necessary capacity to contract;
3. formalities: where the agreement is required to be in certain form (for example,
in writing and signed), these formalities must be observed;
4. legality: the agreement must be lawful – that is, not prohibited by statute or
common law;
5. possibility: the obligations undertaken must be capable of performance when
the agreement is entered into; and
6. certainty: the agreement must have a definite or determinable content, so that
the obligations can be ascertained and enforced.
QUESTION 2
A robbery occurred over the weekend at ABC Furniture Stores in a small town.
At the time of the robbery, X who was an innocent bystander watched the
robbery and also noticed the motor vehicle that was used by the robbers. The
next day, ABC Furniture Stores which is a well- known registered company, with
many stores operating nationally, offers a reward of R50 000 in the local
newspapers in the town, to anyone who provides information to the police which
leads to the arrest of the robbers. X is not aware of the reward offered when he
State and briefly discuss any five (5) requirements for the formation of a valid
contract. [10]
A contact may be defined as an agreement entered into by two or more persons with
the intention of creating a legal obligation or obligations. A further element exists –
namely, that the agreement should be one that the law recognizes as being binding
on the parties.
Requirements for a valid contract:-
1. Consensus: the minds of the parties must meet (or at least appear to meet) on
all material aspects of their agreement;
2. capacity: the parties must have the necessary capacity to contract;
3. formalities: where the agreement is required to be in certain form (for example,
in writing and signed), these formalities must be observed;
4. legality: the agreement must be lawful – that is, not prohibited by statute or
common law;
5. possibility: the obligations undertaken must be capable of performance when
the agreement is entered into; and
6. certainty: the agreement must have a definite or determinable content, so that
the obligations can be ascertained and enforced.
QUESTION 2
A robbery occurred over the weekend at ABC Furniture Stores in a small town.
At the time of the robbery, X who was an innocent bystander watched the
robbery and also noticed the motor vehicle that was used by the robbers. The
next day, ABC Furniture Stores which is a well- known registered company, with
many stores operating nationally, offers a reward of R50 000 in the local
newspapers in the town, to anyone who provides information to the police which
leads to the arrest of the robbers. X is not aware of the reward offered when he
