HARD WORK PAYS
Law of contract
Exam questions and answers
Chembe, Stacy
2016
Read this in conjunction with your study material
,Table of Contents
STUDY UNIT 1: THE LAW OF CONTRACT ................................................................................... 4
1. Obligation: ................................................................................................................................. 4
2. Types of obligations ................................................................................................................. 4
3. Contract: .................................................................................................................................... 4
4. Types of agreements ............................................................................................................... 4
5. Distinguish between a contract and other obligations ........................................................ 4
6. List the requirements for the formation of a valid contract (5) ........................................... 5
STUDY UNIT 2: BASIS OF A CONTRACT ...................................................................................... 5
1. What is the primary basis of contract in South African Law? ............................................ 6
Case law dealing with eth subjective Approach .............................................................. 6
2. Explain the theories of contract that have influenced the South African law of contract
7
STUDY UNIT 3: CORNERSTONES OF CONTRACT ................................................................... 8
1. Explain the concept of freedom of contract and sanctity of contract ................................ 8
2. Discuss with the constitutional courts approach to the sanctity of a contract? ............... 9
Barkhuizen v Napier 2007 (5) SA 323 (CC) ..................................................................... 9
STUDY UNIT 4: THE CONSUMER PROTECTION ACT ............................................................ 10
1. Discuss the Impact of the CPA ............................................................................................ 10
STUDY UNIT 5: THE IMPACT OF THE CONSTITUTION .......................................................... 11
1. Explain the effect of the constitution of RSA on contract law .......................................... 11
PACTA SUNT SERVANDA .............................................................................................. 11
FAIRNESS: BREDNKAMP CASE ........................................................................................... 12
STUDY UNIT 6 and 7: OFFER AND ACCEPTANCE................................................................... 13
Case law .......................................................................................................................................... 13
1. CRAWLEY REX ................................................................................................................. 13
2. Carlill v. Carbolic Smoke Ball Co. [1893] Q.B. 256 (C.A.). .......................................... 13
3. Bloom v The American Swiss Watch Company ............................................................ 14
1. List the requirements of a valid offer ................................................................................... 14
2. State the ways an offer may be terminated. ...................................................................... 14
3. PROBLEM TYPES QUESTION: OFFER AND ACCEPTANCE ..................................... 15
4. Problem type question: Expedition theory: Cape Explosive Works case ...................... 16
STUDY UNIT 8: PACTA DE CONTRAHENDO: OPTIONS & RIGHTS OF PREFERENCE. 17
1. Discuss and distinguish between an option and a right of pre-emption. ....................... 17
1|Page
, 2. Must the option meet the requirements of the main contract? ........................................ 18
STUDY UNIT 10: ABSENCE OF CONSENSUS ........................................................................... 20
1. Refer to George v Fairmead (Pty) Ltd, Sonap Petroleum (SA) Ltd (SA) (Pty) Ltd v
Pappadogianis, and other relevant case law in your answer .................................................. 20
STUDY UNIT 12: MISREPRESENTATION ................................................................................... 24
1. State the requirements for restitutio in integrum. .............................................................. 24
2. Refer to ‘Trotman v Edwick’ and ‘Phame v Paizes’. (10) ................................................ 24
STUDY UNIT 13: DURESS .............................................................................................................. 27
1. State the requirements for duress as set out in “Broodryk v Smuts”. (5) ...................... 27
2. Problem type question ....................................................................................................... 27
(A) On what basis will Sipho be able to attack the contract? Briefly discuss with
reference to the court’s requirements or elements of the cause of action in question. (5)
27
(B) Peter’s defence against Sipho’s action for rescission of the contract is that he, in
fact, acted lawfully. Will Sipho be successful with an action for rescission of the contract
in the circumstances? Substantiate. (4).................................................................................. 28
(C) Will Sipho successfully be able to claim damages from Peter in the circumstances?
Discuss. (1) ................................................................................................................................. 28
UNDUE INFLUENCE 14: UNDUE INFLUENCE ........................................................................... 29
1. State the requirements for undue influence. (3) ............................................................... 29
2. PROBLEM TYPE QUESTION.............................................................................................. 29
STUDY UNIT 15: COMMERCIAL BRIBERY ................................................................................. 30
1. State the elements for commercial bribery as held in Extel Industrial (Pty) Ltd v Crown
Mills (Pty) Ltd. ................................................................................................................................. 30
STUDY UNIT 17 and 18 : LEGALITY: ILLEGAL CONTRACTS THAT ARE VOID. ................ 30
1. JAJBHAY V CASSIM AND OTHER RELEVANT CASE LAW. [15]................................ 30
2. State the test to determine if a restraint of trade clause is enforceable (Basson test).
31
STUDY UNIT 19: FORMALITIES .................................................................................................... 32
1. formalities ................................................................................................................................ 32
2. Discuss X’s position with reference to Sa Sentrale Kooperatiewe Graanmaatskappy
Bpk v Shifren. .................................................................................................................................. 33
STUDY UNIT 20: POSSIBILITY ...................................................................................................... 34
1. Distinguish between initial impossibility of performance, supervening impossibility of
performance, and prevention of performance. .......................................................................... 34
STUDY UNIT 23: TERMS ................................................................................................................. 34
2|Page
, 1. Distinguish briefly between Essentialia, Naturalia and Incidentalia of a contract and
give examples of each. .................................................................................................................. 35
2. Discuss fully with reference to “Minister van Landbou v Scholtz”. Don’t discuss the
Aedilitian remedies for the latent defects. .................................................................................. 35
3. Ticket cases ............................................................................................................................ 36
STUDY UNIT 24: INTERPRETATION ............................................................................................ 37
1. Explain briefly what you understand by the Parol Evidence Rule. (6) ........................... 37
STUDY UNIT 25-39: BREACH AND REMEDIES FOR BREACH .............................................. 38
1. List the five forms of breach of contract .............................................................................. 38
2. Problem type question on Mora ........................................................................................... 38
3. Positive malperformance: BK tooling ...................................................................................... 39
4. Damages ..................................................................................................................................... 40
3|Page
Law of contract
Exam questions and answers
Chembe, Stacy
2016
Read this in conjunction with your study material
,Table of Contents
STUDY UNIT 1: THE LAW OF CONTRACT ................................................................................... 4
1. Obligation: ................................................................................................................................. 4
2. Types of obligations ................................................................................................................. 4
3. Contract: .................................................................................................................................... 4
4. Types of agreements ............................................................................................................... 4
5. Distinguish between a contract and other obligations ........................................................ 4
6. List the requirements for the formation of a valid contract (5) ........................................... 5
STUDY UNIT 2: BASIS OF A CONTRACT ...................................................................................... 5
1. What is the primary basis of contract in South African Law? ............................................ 6
Case law dealing with eth subjective Approach .............................................................. 6
2. Explain the theories of contract that have influenced the South African law of contract
7
STUDY UNIT 3: CORNERSTONES OF CONTRACT ................................................................... 8
1. Explain the concept of freedom of contract and sanctity of contract ................................ 8
2. Discuss with the constitutional courts approach to the sanctity of a contract? ............... 9
Barkhuizen v Napier 2007 (5) SA 323 (CC) ..................................................................... 9
STUDY UNIT 4: THE CONSUMER PROTECTION ACT ............................................................ 10
1. Discuss the Impact of the CPA ............................................................................................ 10
STUDY UNIT 5: THE IMPACT OF THE CONSTITUTION .......................................................... 11
1. Explain the effect of the constitution of RSA on contract law .......................................... 11
PACTA SUNT SERVANDA .............................................................................................. 11
FAIRNESS: BREDNKAMP CASE ........................................................................................... 12
STUDY UNIT 6 and 7: OFFER AND ACCEPTANCE................................................................... 13
Case law .......................................................................................................................................... 13
1. CRAWLEY REX ................................................................................................................. 13
2. Carlill v. Carbolic Smoke Ball Co. [1893] Q.B. 256 (C.A.). .......................................... 13
3. Bloom v The American Swiss Watch Company ............................................................ 14
1. List the requirements of a valid offer ................................................................................... 14
2. State the ways an offer may be terminated. ...................................................................... 14
3. PROBLEM TYPES QUESTION: OFFER AND ACCEPTANCE ..................................... 15
4. Problem type question: Expedition theory: Cape Explosive Works case ...................... 16
STUDY UNIT 8: PACTA DE CONTRAHENDO: OPTIONS & RIGHTS OF PREFERENCE. 17
1. Discuss and distinguish between an option and a right of pre-emption. ....................... 17
1|Page
, 2. Must the option meet the requirements of the main contract? ........................................ 18
STUDY UNIT 10: ABSENCE OF CONSENSUS ........................................................................... 20
1. Refer to George v Fairmead (Pty) Ltd, Sonap Petroleum (SA) Ltd (SA) (Pty) Ltd v
Pappadogianis, and other relevant case law in your answer .................................................. 20
STUDY UNIT 12: MISREPRESENTATION ................................................................................... 24
1. State the requirements for restitutio in integrum. .............................................................. 24
2. Refer to ‘Trotman v Edwick’ and ‘Phame v Paizes’. (10) ................................................ 24
STUDY UNIT 13: DURESS .............................................................................................................. 27
1. State the requirements for duress as set out in “Broodryk v Smuts”. (5) ...................... 27
2. Problem type question ....................................................................................................... 27
(A) On what basis will Sipho be able to attack the contract? Briefly discuss with
reference to the court’s requirements or elements of the cause of action in question. (5)
27
(B) Peter’s defence against Sipho’s action for rescission of the contract is that he, in
fact, acted lawfully. Will Sipho be successful with an action for rescission of the contract
in the circumstances? Substantiate. (4).................................................................................. 28
(C) Will Sipho successfully be able to claim damages from Peter in the circumstances?
Discuss. (1) ................................................................................................................................. 28
UNDUE INFLUENCE 14: UNDUE INFLUENCE ........................................................................... 29
1. State the requirements for undue influence. (3) ............................................................... 29
2. PROBLEM TYPE QUESTION.............................................................................................. 29
STUDY UNIT 15: COMMERCIAL BRIBERY ................................................................................. 30
1. State the elements for commercial bribery as held in Extel Industrial (Pty) Ltd v Crown
Mills (Pty) Ltd. ................................................................................................................................. 30
STUDY UNIT 17 and 18 : LEGALITY: ILLEGAL CONTRACTS THAT ARE VOID. ................ 30
1. JAJBHAY V CASSIM AND OTHER RELEVANT CASE LAW. [15]................................ 30
2. State the test to determine if a restraint of trade clause is enforceable (Basson test).
31
STUDY UNIT 19: FORMALITIES .................................................................................................... 32
1. formalities ................................................................................................................................ 32
2. Discuss X’s position with reference to Sa Sentrale Kooperatiewe Graanmaatskappy
Bpk v Shifren. .................................................................................................................................. 33
STUDY UNIT 20: POSSIBILITY ...................................................................................................... 34
1. Distinguish between initial impossibility of performance, supervening impossibility of
performance, and prevention of performance. .......................................................................... 34
STUDY UNIT 23: TERMS ................................................................................................................. 34
2|Page
, 1. Distinguish briefly between Essentialia, Naturalia and Incidentalia of a contract and
give examples of each. .................................................................................................................. 35
2. Discuss fully with reference to “Minister van Landbou v Scholtz”. Don’t discuss the
Aedilitian remedies for the latent defects. .................................................................................. 35
3. Ticket cases ............................................................................................................................ 36
STUDY UNIT 24: INTERPRETATION ............................................................................................ 37
1. Explain briefly what you understand by the Parol Evidence Rule. (6) ........................... 37
STUDY UNIT 25-39: BREACH AND REMEDIES FOR BREACH .............................................. 38
1. List the five forms of breach of contract .............................................................................. 38
2. Problem type question on Mora ........................................................................................... 38
3. Positive malperformance: BK tooling ...................................................................................... 39
4. Damages ..................................................................................................................................... 40
3|Page
