1
Contents
1) The notion of contract ................................................................................................................ 6
Contract as an agreement to create enforceable obligations: ....................................................... 6
Agreement ................................................................................................................................ 7
Contract as a subset of the law of obligations ........................................................................... 11
Features of obligations ........................................................................................................... 11
Sources of obligations ............................................................................................................ 16
Development and sources of SA contract law ............................................................................... 20
Statutory law and the impact of the Constitution ...................................................................... 21
1) Statutory law of contract: not codified............................................................................. 21
2) Constitution ...................................................................................................................... 21
3) Customary law ................................................................................................................. 24
Underlying constitutional values of law of contract ...................................................................... 25
Bredenkamp v Standard Bank 2010 (SCA) (prescr) ................................................................. 26
Relationship between common law rules of contract and CPA..................................................... 28
CPA: purpose and interpretation: .............................................................................................. 28
Consensus = offer and acceptance ................................................................................................. 32
1) Making of the offer: ............................................................................................................. 32
Requirements of a valid offer: ............................................................................................... 32
Offer for reward ..................................................................................................................... 38
Termination of an offer: ......................................................................................................... 39
2) Acceptance of the offer: ....................................................................................................... 39
3) Breaking off negotiations ..................................................................................................... 44
4) Pacta de contrahendo .......................................................................................................... 46
1) Option contracts ............................................................................................................... 46
2) Preference contracts ......................................................................................................... 49
Contractual liability where there is no consensus: ......................................................................... 57
a) Mistake/ absence of consensus: ........................................................................................... 57
, 2
1) Material v non-material mistake ...................................................................................... 57
2) Relevant v irrelevant mistakes ......................................................................................... 65
3) Unilateral, common, and mutual mistake ........................................................................ 65
b) Liability in the absence of consensus: .................................................................................. 73
Theories of contractual liability: ............................................................................................ 73
Relationship between 2 approaches and 3 theories in practice .............................................. 76
Saambou-Nasionale Bouvereniging v Friedman 1979 SCA (prescr): ................................... 76
Doctrines that establish objective liability: ............................................................................ 77
c) Liability ito Consumer Protection Act ................................................................................. 89
Improperly obtained consensus: .................................................................................................... 91
Misrepresentation....................................................................................................................... 93
What are misrepresentations? ................................................................................................ 94
Remedies for misrepresentation: ......................................................................................... 100
Aedilitian remedies/ actions: ............................................................................................... 111
Statutory remedies: Consumer Protection Act..................................................................... 112
Misrepresentation as a defence: ........................................................................................... 113
Excluding liability for misrepresentation ............................................................................ 114
Duress: ..................................................................................................................................... 117
Modern requirements of duress: .......................................................................................... 118
Undue influence ....................................................................................................................... 126
Requirements: ...................................................................................................................... 126
Remedies:............................................................................................................................. 126
Origins: ................................................................................................................................ 128
Preller v Jordaan 1956 (A): .................................................................................................. 128
Commercial bribery: ................................................................................................................ 130
Plaaslike Boerderdienste v Chemfos 1986 AD: .................................................................. 131
Extel Industrial v Crown Mills (prescr): .............................................................................. 131
Further grounds for improperly obtained consent? .................................................................. 131
, 3
Values guiding the development of the common law on improperly obtained consent ...... 131
Unrecognised grounds: abuse of circumstances ...................................................................... 133
Beadica 231 CC v Trustees, Oregon Trust 2020 (5) SA 247 (CC) prescr .......................... 134
Contractual capacity .................................................................................................................... 136
Factors influencing lack of capacity ........................................................................................ 136
Persons with full contractual capacity ..................................................................................... 138
Formalities: .................................................................................................................................. 140
Formalities in electronic contracts: .......................................................................................... 141
Spring Forest Trading CC v Wilberry Ecowash 2015 SCA: .............................................. 142
Sources of formalities: ............................................................................................................. 144
1) Statutory formalities: ..................................................................................................... 144
2) Self-imposed formalities ................................................................................................ 152
Remedies:............................................................................................................................. 163
Requirements for validity of a contract ....................................................................................... 169
Possibility as a requirement for a valid contract ...................................................................... 169
initial impossibility, not supervening or making impossible through fault ......................... 169
Objective, not subjective impossibility:............................................................................... 170
Exceptions: liability despite impossibility ........................................................................... 171
Consequences of impossibilitiy ........................................................................................... 172
Certainty as a requirement for a valid contract: ....................................................................... 174
practical examples of how the rule works: .......................................................................... 175
consequences of uncertainty: ............................................................................................... 182
Legality .................................................................................................................................... 183
Introduction .......................................................................................................................... 183
Statutory illegality: .............................................................................................................. 183
Common law illegality: ....................................................................................................... 184
Specific examples of illegal contracts that are void ............................................................ 188
Contacts void for infringing public policy ........................................................................... 188
, 4
The consequences of illegality: ............................................................................................ 204
2) The content and operation of a contract ................................................................................. 209
Parties to a contract .................................................................................................................. 209
Multiplicity of parties .......................................................................................................... 209
Contracts and third parties ................................................................................................... 216
What must be performed? ........................................................................................................ 228
Obligations created by a contract ......................................................................................... 228
Types of terms in a contract ................................................................................................. 232
Proof and interpretation of terms: ........................................................................................ 255
Breach of contract .................................................................................................................... 263
Types of breach .................................................................................................................... 263
malperformance ................................................................................................................... 264
Anticipatory breach of contract ........................................................................................... 290
Breach of contract by the creditor ........................................................................................ 301
Remedies available for breach: ............................................................................................ 311
Transfer of obligations ................................................................................................................. 370
Cession ..................................................................................................................................... 370
Requirements: ...................................................................................................................... 370
Consequences of cession ..................................................................................................... 373
Termination of obligations........................................................................................................... 378
Termination by performance ................................................................................................... 378
Termination by agreement ....................................................................................................... 379
Termination by novation .......................................................................................................... 379
Termination by compromise/settlement .................................................................................. 380
Be Bop A Lula Manufacturing & Printing v Kingtex Marketing (Pty) Ltd 2008 (SCA)
prescr: ............................................................................................................................. 380
Termination by unilaterally exercising right of termination .................................................... 384
Termination of obligations by operation of law ...................................................................... 385
Contents
1) The notion of contract ................................................................................................................ 6
Contract as an agreement to create enforceable obligations: ....................................................... 6
Agreement ................................................................................................................................ 7
Contract as a subset of the law of obligations ........................................................................... 11
Features of obligations ........................................................................................................... 11
Sources of obligations ............................................................................................................ 16
Development and sources of SA contract law ............................................................................... 20
Statutory law and the impact of the Constitution ...................................................................... 21
1) Statutory law of contract: not codified............................................................................. 21
2) Constitution ...................................................................................................................... 21
3) Customary law ................................................................................................................. 24
Underlying constitutional values of law of contract ...................................................................... 25
Bredenkamp v Standard Bank 2010 (SCA) (prescr) ................................................................. 26
Relationship between common law rules of contract and CPA..................................................... 28
CPA: purpose and interpretation: .............................................................................................. 28
Consensus = offer and acceptance ................................................................................................. 32
1) Making of the offer: ............................................................................................................. 32
Requirements of a valid offer: ............................................................................................... 32
Offer for reward ..................................................................................................................... 38
Termination of an offer: ......................................................................................................... 39
2) Acceptance of the offer: ....................................................................................................... 39
3) Breaking off negotiations ..................................................................................................... 44
4) Pacta de contrahendo .......................................................................................................... 46
1) Option contracts ............................................................................................................... 46
2) Preference contracts ......................................................................................................... 49
Contractual liability where there is no consensus: ......................................................................... 57
a) Mistake/ absence of consensus: ........................................................................................... 57
, 2
1) Material v non-material mistake ...................................................................................... 57
2) Relevant v irrelevant mistakes ......................................................................................... 65
3) Unilateral, common, and mutual mistake ........................................................................ 65
b) Liability in the absence of consensus: .................................................................................. 73
Theories of contractual liability: ............................................................................................ 73
Relationship between 2 approaches and 3 theories in practice .............................................. 76
Saambou-Nasionale Bouvereniging v Friedman 1979 SCA (prescr): ................................... 76
Doctrines that establish objective liability: ............................................................................ 77
c) Liability ito Consumer Protection Act ................................................................................. 89
Improperly obtained consensus: .................................................................................................... 91
Misrepresentation....................................................................................................................... 93
What are misrepresentations? ................................................................................................ 94
Remedies for misrepresentation: ......................................................................................... 100
Aedilitian remedies/ actions: ............................................................................................... 111
Statutory remedies: Consumer Protection Act..................................................................... 112
Misrepresentation as a defence: ........................................................................................... 113
Excluding liability for misrepresentation ............................................................................ 114
Duress: ..................................................................................................................................... 117
Modern requirements of duress: .......................................................................................... 118
Undue influence ....................................................................................................................... 126
Requirements: ...................................................................................................................... 126
Remedies:............................................................................................................................. 126
Origins: ................................................................................................................................ 128
Preller v Jordaan 1956 (A): .................................................................................................. 128
Commercial bribery: ................................................................................................................ 130
Plaaslike Boerderdienste v Chemfos 1986 AD: .................................................................. 131
Extel Industrial v Crown Mills (prescr): .............................................................................. 131
Further grounds for improperly obtained consent? .................................................................. 131
, 3
Values guiding the development of the common law on improperly obtained consent ...... 131
Unrecognised grounds: abuse of circumstances ...................................................................... 133
Beadica 231 CC v Trustees, Oregon Trust 2020 (5) SA 247 (CC) prescr .......................... 134
Contractual capacity .................................................................................................................... 136
Factors influencing lack of capacity ........................................................................................ 136
Persons with full contractual capacity ..................................................................................... 138
Formalities: .................................................................................................................................. 140
Formalities in electronic contracts: .......................................................................................... 141
Spring Forest Trading CC v Wilberry Ecowash 2015 SCA: .............................................. 142
Sources of formalities: ............................................................................................................. 144
1) Statutory formalities: ..................................................................................................... 144
2) Self-imposed formalities ................................................................................................ 152
Remedies:............................................................................................................................. 163
Requirements for validity of a contract ....................................................................................... 169
Possibility as a requirement for a valid contract ...................................................................... 169
initial impossibility, not supervening or making impossible through fault ......................... 169
Objective, not subjective impossibility:............................................................................... 170
Exceptions: liability despite impossibility ........................................................................... 171
Consequences of impossibilitiy ........................................................................................... 172
Certainty as a requirement for a valid contract: ....................................................................... 174
practical examples of how the rule works: .......................................................................... 175
consequences of uncertainty: ............................................................................................... 182
Legality .................................................................................................................................... 183
Introduction .......................................................................................................................... 183
Statutory illegality: .............................................................................................................. 183
Common law illegality: ....................................................................................................... 184
Specific examples of illegal contracts that are void ............................................................ 188
Contacts void for infringing public policy ........................................................................... 188
, 4
The consequences of illegality: ............................................................................................ 204
2) The content and operation of a contract ................................................................................. 209
Parties to a contract .................................................................................................................. 209
Multiplicity of parties .......................................................................................................... 209
Contracts and third parties ................................................................................................... 216
What must be performed? ........................................................................................................ 228
Obligations created by a contract ......................................................................................... 228
Types of terms in a contract ................................................................................................. 232
Proof and interpretation of terms: ........................................................................................ 255
Breach of contract .................................................................................................................... 263
Types of breach .................................................................................................................... 263
malperformance ................................................................................................................... 264
Anticipatory breach of contract ........................................................................................... 290
Breach of contract by the creditor ........................................................................................ 301
Remedies available for breach: ............................................................................................ 311
Transfer of obligations ................................................................................................................. 370
Cession ..................................................................................................................................... 370
Requirements: ...................................................................................................................... 370
Consequences of cession ..................................................................................................... 373
Termination of obligations........................................................................................................... 378
Termination by performance ................................................................................................... 378
Termination by agreement ....................................................................................................... 379
Termination by novation .......................................................................................................... 379
Termination by compromise/settlement .................................................................................. 380
Be Bop A Lula Manufacturing & Printing v Kingtex Marketing (Pty) Ltd 2008 (SCA)
prescr: ............................................................................................................................. 380
Termination by unilaterally exercising right of termination .................................................... 384
Termination of obligations by operation of law ...................................................................... 385
