QUESTION 1
The Will Theory reflects a subjective approach to the formation of a contract,
which is based solely on consensus. For a valid contract to be concluded with
reference to this theory, there should be evidence of ‘subjective consensus’
between all the parties. One element of subjective consensus is that the
parties must seriously intend to contract. Briefly explain the other elements of
‘subjective consensus’. Do not discuss the requirements for a valid offer and a
valid acceptance for this question. [10]
The will theory of contract, which underpins classical contract law, is based on the
idea that a contract arises through the free and mutual consent of the parties. It
emphasises the role of intention and agreement between contracting parties. In
terms of this theory, a contract is valid if there is subjective consensus a genuine
meeting of the minds (consensus ad idem). Subjective consensus means that each
party must have a true intention to be bound by the contract and must direct this
intention toward the other party. While serious intention is one element of subjective
consensus, there are additional essential elements that must also be present for
consensus to exist.
One such element is serious intention to contract, which requires that each party
must intend to create legal relations. This excludes situations of joking, emotional
statements, or hypothetical scenarios where no genuine contractual obligation was
intended. A second element is true agreement or actual consensus on the material
terms of the contract. The parties must not only intend to contract but must also
agree on the same terms in the same sense. If there is a misunderstanding about
the subject matter or price due to a mistake, this can undermine consensus.
Another important element is intention directed at the other party. Each party must
direct their will to the specific other party with whom they intend to conclude the
contract. This prevents cases of mistaken identity or situations where a party
believes they are contracting with someone else. The will to be bound must not exist
in a vacuum; it must be reciprocal and clearly communicated (even if just in the
minds of the parties) to the other.
Additionally, knowledge of the other party’s intention forms part of subjective
consensus. Each party must not only have an intention to be bound but must also be
, aware that the other party shares the same intention. This knowledge ensures that
both parties are engaging in a shared legal enterprise and are not acting under
fundamental misunderstandings about each other’s state of mind.
Lastly, the parties must be free from external pressure, such as duress, undue
influence, or mistake, which would impair the genuine nature of their will. If any of
these vitiating factors are present, consensus may be undermined even if, on the
surface, it appears that both parties agreed.
Subjective consensus under the will theory requires not only a serious intention to
contract but also mutual, directed, and informed agreement between the parties.
This internal meeting of minds, free from defect, forms the foundation of a valid
contract. Without it, the contract may be void due to the absence of genuine consent.
QUESTION 2
In South African contract law, the concept of common mistake refers to a situation
where both parties to a contract are mistaken about the same material fact at the
time of concluding the agreement. This type of mistake, if sufficiently serious, may
result in the absence of consensus between the parties and thus render the contract
void. Consensus is a fundamental requirement for the formation of a valid contract.
Where the minds of the parties do not truly meet, there is no enforceable agreement.
A common mistake is distinguishable from other forms of mistake, such as unilateral
or mutual mistake. In the case of a unilateral mistake, only one party labours under a
misapprehension, while the other is aware of the true facts. A mutual mistake occurs
when both parties are mistaken, but about different facts, and each believes the
other shares their understanding. By contrast, a common mistake exists when both
parties are mistaken about the same fact, and their error relates to something
essential to the contract.
For a common mistake to have the legal effect of invalidating a contract, certain
requirements must be met. First, the mistake must relate to a fact that existed at the
time of contracting. Second, the fact must be material – meaning that it goes to the
root of the contract. Third, the mistake must be reasonable. A mere subjective error
will not suffice; it must be shown that a reasonable person in the position of the
The Will Theory reflects a subjective approach to the formation of a contract,
which is based solely on consensus. For a valid contract to be concluded with
reference to this theory, there should be evidence of ‘subjective consensus’
between all the parties. One element of subjective consensus is that the
parties must seriously intend to contract. Briefly explain the other elements of
‘subjective consensus’. Do not discuss the requirements for a valid offer and a
valid acceptance for this question. [10]
The will theory of contract, which underpins classical contract law, is based on the
idea that a contract arises through the free and mutual consent of the parties. It
emphasises the role of intention and agreement between contracting parties. In
terms of this theory, a contract is valid if there is subjective consensus a genuine
meeting of the minds (consensus ad idem). Subjective consensus means that each
party must have a true intention to be bound by the contract and must direct this
intention toward the other party. While serious intention is one element of subjective
consensus, there are additional essential elements that must also be present for
consensus to exist.
One such element is serious intention to contract, which requires that each party
must intend to create legal relations. This excludes situations of joking, emotional
statements, or hypothetical scenarios where no genuine contractual obligation was
intended. A second element is true agreement or actual consensus on the material
terms of the contract. The parties must not only intend to contract but must also
agree on the same terms in the same sense. If there is a misunderstanding about
the subject matter or price due to a mistake, this can undermine consensus.
Another important element is intention directed at the other party. Each party must
direct their will to the specific other party with whom they intend to conclude the
contract. This prevents cases of mistaken identity or situations where a party
believes they are contracting with someone else. The will to be bound must not exist
in a vacuum; it must be reciprocal and clearly communicated (even if just in the
minds of the parties) to the other.
Additionally, knowledge of the other party’s intention forms part of subjective
consensus. Each party must not only have an intention to be bound but must also be
, aware that the other party shares the same intention. This knowledge ensures that
both parties are engaging in a shared legal enterprise and are not acting under
fundamental misunderstandings about each other’s state of mind.
Lastly, the parties must be free from external pressure, such as duress, undue
influence, or mistake, which would impair the genuine nature of their will. If any of
these vitiating factors are present, consensus may be undermined even if, on the
surface, it appears that both parties agreed.
Subjective consensus under the will theory requires not only a serious intention to
contract but also mutual, directed, and informed agreement between the parties.
This internal meeting of minds, free from defect, forms the foundation of a valid
contract. Without it, the contract may be void due to the absence of genuine consent.
QUESTION 2
In South African contract law, the concept of common mistake refers to a situation
where both parties to a contract are mistaken about the same material fact at the
time of concluding the agreement. This type of mistake, if sufficiently serious, may
result in the absence of consensus between the parties and thus render the contract
void. Consensus is a fundamental requirement for the formation of a valid contract.
Where the minds of the parties do not truly meet, there is no enforceable agreement.
A common mistake is distinguishable from other forms of mistake, such as unilateral
or mutual mistake. In the case of a unilateral mistake, only one party labours under a
misapprehension, while the other is aware of the true facts. A mutual mistake occurs
when both parties are mistaken, but about different facts, and each believes the
other shares their understanding. By contrast, a common mistake exists when both
parties are mistaken about the same fact, and their error relates to something
essential to the contract.
For a common mistake to have the legal effect of invalidating a contract, certain
requirements must be met. First, the mistake must relate to a fact that existed at the
time of contracting. Second, the fact must be material – meaning that it goes to the
root of the contract. Third, the mistake must be reasonable. A mere subjective error
will not suffice; it must be shown that a reasonable person in the position of the
