Law
of
Contract
Past-‐paper
Questions
and
Answers
2014
Q&A
Long
questions
from
past
examination
papers
(2013
to
2009)
-‐
and
a
few
extras
-‐
answered.
,Direct
questions
Discuss the impact of the Consumer Protection Act 68 of 2008
upon the law of contract with reference to its aims, objectives,
scope, national regulatory institutions, and sanctions. [15]
The CPA is bound to have a huge impact on the conduct of businesses in South
Africa, and the law of contract.
The primary purpose of the Act is to protect consumers from exploitation in the
marketplace, and to promote their social and economic welfare. More
specifically, it aims to:
• Establish a legal framework for the achievement and maintenance of a
consumer market that is fair, accessible, efficient, and responsible, for the
benefit of consumers generally;
• Promote fair business practices;
• Protect consumers from unconscionable, unjust, or unreasonable
business practices.
The scope of the Act is very wide. It applies to:
• Most transactions concluded in the ordinary course of business between
suppliers and consumers within South Africa, as well as;
• The promotion of goods and services that could lead to such
transactions, and;
• The goods and services themselves once the transaction has been
concluded.
A supplier is any person (including a juristic person, trust, and organ of State)
who markets any goods or services.
A consumer includes not only the end-consumer of goods and services but
also:
• Franchisees
• Relatively small businesses in the supply chain (asset value or annual
turnover below the threshold determined by the Minister)
The Act does not apply to any transaction in terms of which goods and services
are promoted or supplied:
• To the State
2
Q&A
by
@yash0505
, • To a juristic person with an asset value or annual turnover above the
threshold
• Employment contracts
• Credit agreements
• Transactions exempted by the Minister
These rights are protected and enforced not only through the courts, but the
National Consumer Commission and the National Consumer Tribunal. Failure to
comply with provisions of the Act might attract various sanctions, commencing
with compliance notices and leading possibly to the imposition of fines and
criminal penalties. Contractual provisions in contravention of the Act may be
declared null and void to the extent of non-compliance.
List and very briefly discuss the requirements for a valid offer and
acceptance. [10]
OFFER:
• Must be firm.
(That is to say, with the intention that its acceptance will call into being a
binding contract.)
• Must be complete.
(It must contain all the material terms of the proposed agreement.)
• Must be clear and certain.
(It should be enough for the addressee to answer merely “yes” for a
contract to come into being.)
• Must meet the requirements of the Consumer Protection Act.
ACCEPTANCE:
• Must be unqualified.
(It must be a complete and unequivocal assent to every element of the
offer.)
• Must be by the person to whom the offer was made – Bird v
Summerville.
(E.g. the offer to sell farm A cannot be accepted by A and B jointly.)
• Must be a conscious response to the offer – Bloom v American Swiss
Watch Co.
(A person cannot accept an offer if he was not aware of it.)
• Must be in the form prescribed by the offeror, if any.
3
Q&A
by
@yash0505
, State the ways an offer may be terminated.
1. Rejection of the offer
2. Acceptance of the offer
3. Effluxion of the prescribed time, or of a reasonable time
4. Death of either party
5. Revocation of the offer
6. Loss of legal capacity to act
Discuss and distinguish between an option and a right of pre-
emption. [10]
An option is a substantive offer, reinforced by an agreement in terms of which
the offeror undertakes to keep his offer open to the offeree for a specified
period.
A right of pre-emption is a type of right of preference. It is given by a prospective
seller to a prospective purchaser, to give the purchaser preference if the
prospective seller should decide to sell.
There are significant differences between the two:
In the case of an option to buy, the grantor has already made a firm offer to the
grantee, and the power to conclude the sale lies exclusively in the hands of the
grantee.
With a pre-emption agreement, however, there is as yet no firm offer “on the
table” – merely an undertaking to make an offer to the grantee if the trigger
event occurs (usually, if the grantee decides to sell the property). The grantor
accordingly retains the power to decide whether or not to sell, and cannot be
compelled to do so unless or until the trigger event has occurred.
State the requirements for duress and undue influence.
DURESS (improper pressure that amounts to intimidation):
4
Q&A
by
@yash0505
of
Contract
Past-‐paper
Questions
and
Answers
2014
Q&A
Long
questions
from
past
examination
papers
(2013
to
2009)
-‐
and
a
few
extras
-‐
answered.
,Direct
questions
Discuss the impact of the Consumer Protection Act 68 of 2008
upon the law of contract with reference to its aims, objectives,
scope, national regulatory institutions, and sanctions. [15]
The CPA is bound to have a huge impact on the conduct of businesses in South
Africa, and the law of contract.
The primary purpose of the Act is to protect consumers from exploitation in the
marketplace, and to promote their social and economic welfare. More
specifically, it aims to:
• Establish a legal framework for the achievement and maintenance of a
consumer market that is fair, accessible, efficient, and responsible, for the
benefit of consumers generally;
• Promote fair business practices;
• Protect consumers from unconscionable, unjust, or unreasonable
business practices.
The scope of the Act is very wide. It applies to:
• Most transactions concluded in the ordinary course of business between
suppliers and consumers within South Africa, as well as;
• The promotion of goods and services that could lead to such
transactions, and;
• The goods and services themselves once the transaction has been
concluded.
A supplier is any person (including a juristic person, trust, and organ of State)
who markets any goods or services.
A consumer includes not only the end-consumer of goods and services but
also:
• Franchisees
• Relatively small businesses in the supply chain (asset value or annual
turnover below the threshold determined by the Minister)
The Act does not apply to any transaction in terms of which goods and services
are promoted or supplied:
• To the State
2
Q&A
by
@yash0505
, • To a juristic person with an asset value or annual turnover above the
threshold
• Employment contracts
• Credit agreements
• Transactions exempted by the Minister
These rights are protected and enforced not only through the courts, but the
National Consumer Commission and the National Consumer Tribunal. Failure to
comply with provisions of the Act might attract various sanctions, commencing
with compliance notices and leading possibly to the imposition of fines and
criminal penalties. Contractual provisions in contravention of the Act may be
declared null and void to the extent of non-compliance.
List and very briefly discuss the requirements for a valid offer and
acceptance. [10]
OFFER:
• Must be firm.
(That is to say, with the intention that its acceptance will call into being a
binding contract.)
• Must be complete.
(It must contain all the material terms of the proposed agreement.)
• Must be clear and certain.
(It should be enough for the addressee to answer merely “yes” for a
contract to come into being.)
• Must meet the requirements of the Consumer Protection Act.
ACCEPTANCE:
• Must be unqualified.
(It must be a complete and unequivocal assent to every element of the
offer.)
• Must be by the person to whom the offer was made – Bird v
Summerville.
(E.g. the offer to sell farm A cannot be accepted by A and B jointly.)
• Must be a conscious response to the offer – Bloom v American Swiss
Watch Co.
(A person cannot accept an offer if he was not aware of it.)
• Must be in the form prescribed by the offeror, if any.
3
Q&A
by
@yash0505
, State the ways an offer may be terminated.
1. Rejection of the offer
2. Acceptance of the offer
3. Effluxion of the prescribed time, or of a reasonable time
4. Death of either party
5. Revocation of the offer
6. Loss of legal capacity to act
Discuss and distinguish between an option and a right of pre-
emption. [10]
An option is a substantive offer, reinforced by an agreement in terms of which
the offeror undertakes to keep his offer open to the offeree for a specified
period.
A right of pre-emption is a type of right of preference. It is given by a prospective
seller to a prospective purchaser, to give the purchaser preference if the
prospective seller should decide to sell.
There are significant differences between the two:
In the case of an option to buy, the grantor has already made a firm offer to the
grantee, and the power to conclude the sale lies exclusively in the hands of the
grantee.
With a pre-emption agreement, however, there is as yet no firm offer “on the
table” – merely an undertaking to make an offer to the grantee if the trigger
event occurs (usually, if the grantee decides to sell the property). The grantor
accordingly retains the power to decide whether or not to sell, and cannot be
compelled to do so unless or until the trigger event has occurred.
State the requirements for duress and undue influence.
DURESS (improper pressure that amounts to intimidation):
4
Q&A
by
@yash0505
