KRG Chapter 5 - Summary
Requirements for a valid contract
1. Consensus CH4
2. Contractual capacity CH5
3. Legality- contract must be legal CH
4. Possibility & certainty- performance must be possible and certain
5. Formalities-a contract should comply with certain formalities in order to be a valid and
binding contract
Legal capacity
• To carry rights and duties and all persons enjoy these rights from birth to death (natural) and
a legal person the rights are from incorporation to deregistration.
• All natural and juristic persons
Contractual capacity
• The competence to perform a juristic act, for example to conclude a contract, reach a binding
agreement.
• Requirements:
Ability to form an intention or will.
Ability to act with sound judgement in accordance with such a will, realize the extent.
Natural person
• All human beings
• The contractual capacity depends on
o Status: age, mental abilities, sex
o Circumstances: marriage or insolvency
• All-natural persons are legal subject, have human rights and are carrier of rights and duties
Person with no contractual capacity
• Infants (child under the age of 7)
o cannot conclude a binding contract
o the parent represents the child and manages rights and duties.
• Mental health care user who lacks mental ability
o Administrator manages the rights and duties.
o Any agreement between a mentally incapacitated person and another is null & void.
o Any person claiming that a person has a lack of involuntary meltability has to prove it.
o Anyone claiming the opposite will have to prove presence of capacity. Eg lucidum
intervalum (lucid intervals).
o a mentally incapacitated person has no contractual capacity and any contract entered
into by such a person is void (Consumer Protection Act)
, KRG Chapter 5 - Summary
• Persons under the influence of a substance or automatism
o a Person is unable to form intent due to an influence
o Any agreements in this state is null & void.
o Any performance already performed can be claimed back.
o When a performance return is not possible, the other party is liable on the basis
of unjustified enrichment.
o Declaration theory- not in SA law
o Expedition theory- post contracts
o Reception – applied when there is acceptance via data message
o General information theory – all other cases
o Time of incapacity = time of entering into contract must correspond
Limited capacity
• General rule: persons can only perform juristic acts such as concluding contracts with
assistant or consent of another person
• Prodigals (spendthrifts)
• Persons under curatorship
• Insolvent persons
• Minors (age 7-18)
o High court & office of the master of high court = upper guardian
o parent/tutor may
assist
consent to an act (before or during or after (ratification)
be the agent of the minor
o Can attain majority (full contractual capacity)
turning 18
getting married (even if divorced)
by court order.
o Contracts binding minors
has full capacity (legislation to get rights and no duties (donations)
minor has consent of parent, parent acts on behalf of minor,
additional consents – minor is owner of immovable property the alienation cannot be
done by a parent
Mater of high court Value R1- R250 000
Value exceeds R250 000 a court order must be issued
The act of engagement cannot be concluded by/behalf of minor until puberty.
o Minor pretends to have attained majority – the law will not protect the minor
o Restitutio in integrum (Restitution to prior position)
the danger of doing business with any minor
Exceptions
minor pretends to be 18 or older,
minor has turned 18 and ratified his own contract
the action has prescribed (3 years).
Requirements for a valid contract
1. Consensus CH4
2. Contractual capacity CH5
3. Legality- contract must be legal CH
4. Possibility & certainty- performance must be possible and certain
5. Formalities-a contract should comply with certain formalities in order to be a valid and
binding contract
Legal capacity
• To carry rights and duties and all persons enjoy these rights from birth to death (natural) and
a legal person the rights are from incorporation to deregistration.
• All natural and juristic persons
Contractual capacity
• The competence to perform a juristic act, for example to conclude a contract, reach a binding
agreement.
• Requirements:
Ability to form an intention or will.
Ability to act with sound judgement in accordance with such a will, realize the extent.
Natural person
• All human beings
• The contractual capacity depends on
o Status: age, mental abilities, sex
o Circumstances: marriage or insolvency
• All-natural persons are legal subject, have human rights and are carrier of rights and duties
Person with no contractual capacity
• Infants (child under the age of 7)
o cannot conclude a binding contract
o the parent represents the child and manages rights and duties.
• Mental health care user who lacks mental ability
o Administrator manages the rights and duties.
o Any agreement between a mentally incapacitated person and another is null & void.
o Any person claiming that a person has a lack of involuntary meltability has to prove it.
o Anyone claiming the opposite will have to prove presence of capacity. Eg lucidum
intervalum (lucid intervals).
o a mentally incapacitated person has no contractual capacity and any contract entered
into by such a person is void (Consumer Protection Act)
, KRG Chapter 5 - Summary
• Persons under the influence of a substance or automatism
o a Person is unable to form intent due to an influence
o Any agreements in this state is null & void.
o Any performance already performed can be claimed back.
o When a performance return is not possible, the other party is liable on the basis
of unjustified enrichment.
o Declaration theory- not in SA law
o Expedition theory- post contracts
o Reception – applied when there is acceptance via data message
o General information theory – all other cases
o Time of incapacity = time of entering into contract must correspond
Limited capacity
• General rule: persons can only perform juristic acts such as concluding contracts with
assistant or consent of another person
• Prodigals (spendthrifts)
• Persons under curatorship
• Insolvent persons
• Minors (age 7-18)
o High court & office of the master of high court = upper guardian
o parent/tutor may
assist
consent to an act (before or during or after (ratification)
be the agent of the minor
o Can attain majority (full contractual capacity)
turning 18
getting married (even if divorced)
by court order.
o Contracts binding minors
has full capacity (legislation to get rights and no duties (donations)
minor has consent of parent, parent acts on behalf of minor,
additional consents – minor is owner of immovable property the alienation cannot be
done by a parent
Mater of high court Value R1- R250 000
Value exceeds R250 000 a court order must be issued
The act of engagement cannot be concluded by/behalf of minor until puberty.
o Minor pretends to have attained majority – the law will not protect the minor
o Restitutio in integrum (Restitution to prior position)
the danger of doing business with any minor
Exceptions
minor pretends to be 18 or older,
minor has turned 18 and ratified his own contract
the action has prescribed (3 years).
