Summary Kth 220 Theme 1-6 Detailed Summaries.

KTH (LoC – Law of Contract)
CASE
LEGISLATION
DEFINITION
EXAMPLE

STUDY UNIT 0: GENERAL PRINCIPLES OF LAW OF
CONTRACT AND INTRO TO SPECIFIC CONTRACTS
KTR (notes file:///Users/kiara/Desktop/Third Year Module Notes/KTR211.docx)


Additional notes to KTR
 True intention of parties – courts always give effect to this.
 Consensus 2 elements = offer and acceptance.
 Valid contract to specific kind of contract – must look at essentialia
(minimum essentials parties must have consensus on).
 Naturalia = rights and duties flowing naturally from specific kind of
contract.
 If parties address specifically naturalia rights and duties it becomes
incidental to agreement so it becomes incidentilia.
 Suspensive conditions – suspends continuation of contract (because
of uncertain future event).
 Void – contract deemed to have not existed (no remedies, nothing to
rely on).
 Voidable – issue with continuation/validity of contract, can’t see
contract through as something affected consensus (there are
remedies).
 Formality = not always requirement for validity – general rule = parill
evidence rule.
 Stay in contract (remedy = specific performance) – can claim
damages.

, Go in contract (cancel) – can claim damages.
STUDY UNIT 1: PURCHASE AND SALE
THEME 1


Contract of sale (CoS) defined
 Specific, nominated, reciprocal agreement to buy and sell, in terms of
which seller has true intention to deliver determined or determinable
object together with all rights in object undisturbed, to the buyer and
the buyer has true intention of paying determined or determinable
price for object.


Difference between contract and specific contract
 Contract must comply with validity requirements.
 Valid specific contract –
o must comply with general requirements for validity but parties
must have consensus on the essentialia (minimum essentials)
of the specific type of contract.
 Identify specific contract by essentialia then you can identify naturalia
(rights and duties naturally flowing from specific contract).
 If parties agree on terms and conditions or exclude certain naturalia –
agreement = incidentalia.


Approach to specific contracts
1. What are the essentialia?
2. What are the naturalia?
o What rights and duties of each parties and if not complied with
what are the rights/remedies?

,3. When and how can parties change/exclude naturalia by way of
agreement?
o = incidentalia (terms and conditions incidental to that contract
between particular parties).
4. How does case law and legislation affect these principles?
o How does court interpret those principles?
5. What are the general rules and exceptions?


Essentialia for exchange v lease v sale
 Sale (parties must have consensus on) –
o Nature of agreement (intention to buy and sell).
o Thing sold (merx/res vendita).
o Price (pretium).
 Lease (parties must have consensus on) –
o Lease/rent.
o Thing leased.
o Rent.
o Term (always temporary).
 Ownership does not pass to lessee, contract of sale concluded with
intention of passing ownership.
 Lease = temporary in nature, sale = not term-bound.
 Exchange = object rendered as consideration for another object, sale
= monetary amount constitutes consideration.
 Exchange = ownership passes upon delivery of objects, sale =
delivery not only requirement for passing of ownership.


Proof of essentialia
 McWilliams v First Consolidated Holdings –

, o Facts –
 Letter of confirmation of verbal sale contract drafted by
seller’s lawyer and sent via post to buyer.
 Buyer did not respond nor disputed the letter.
 Court had to decided whether valid sale.
o Court –
 Essentialia that parties have consensus on for valid sale
to be concluded (nature/price/merx).
 Mere quiescence is not acceptance of contents by buyer
(esp. where commercial practice and human experience
would call for response from buyer).


Conclusion of sale does not result in transfer of ownership
 More is needed than just sale contract (delivery/payment).
 Conclusion of sale contract = personal right.
 When requirements like delivery/payment are met then transfer of
ownership = real right.
 Real right = stronger than personal right.
 Seller does not have to be owner of merx for valid contract (if seller =
owner then they must have intention to transfer ownership otherwise
no sale).


THEME 2
Essentialia of CoS
 Nature of agreement –
o Seller and buyer must reach consensus of essentialia before
sale contract can exist.
o They must reveal intention to buy/sell.