PVL3702 ASSIGNMENT 1 SEMESTER 1 2023
, Carol, an owner of an exclusive bicycle shop advertised a special limited-
edition bicycle for sale, and invited the public to make offers for the bicycle.
Jane and Portia were among many people who submitted written offers for the
bicycle. Jane’s offer was for R150 000, and Portia’s offer was for R190 000.
Although Carol intended to accept Portia’s offer, she erroneously wrote a letter
to Jane, wherein she accepted Jane’s offer. Jane believes that an enforceable
contract was formed but Carol denies this. Apply the direct reliance theory and
advise if a legally binding contract was concluded between Carol and Jane.
Discuss fully and refer to case law in your answer. Do not apply the Consumer
Protection Act 68 of 2008.
Identifying the problem
The facts seemingly indicate that Carol and Jane have not reached
consensus based on the will theory. If so, it is necessary to determine if
Carol may be held bound to a contract with Jane, based on the reliance
theory, or whether Carol will escape liability. Only the direct approach to
the reliance theory will be considered.
Discussing the relevant law applicable to the problem, referring to the
relevant case law, AND applying the law to the facts of the problem
The direct reliance approach can only be applied after it has been
determined that Carol acted under a material mistake. It must thus be
determined whether agreement (consensus ad idem) as a contractual
basis exists between the parties, as required in terms of the will theory.
The first step is to determine whether agreement (consensus ad idem) as
a contractual basis exists between the parties, as required in terms of the
will theory. Consensus has three elements:1 the parties must seriously
intend to contract, be of one mind as to the material aspects of the
proposed agreement (the terms and the identity of the parties to it), and
be conscious of the fact that their minds have met.
In the present case the parties were not in agreement as to the
consequences they wished to create: Carol intended to accept Portia’s
offer, she erroneously wrote a letter to Jane, wherein she accepted
Jane’s offer. This is a mistake as to the
1
(Hutchison and Pretorius (eds) The law of Contract in South Africa (Oxford University Press Southern Africa
2012) 14 85):
, Carol, an owner of an exclusive bicycle shop advertised a special limited-
edition bicycle for sale, and invited the public to make offers for the bicycle.
Jane and Portia were among many people who submitted written offers for the
bicycle. Jane’s offer was for R150 000, and Portia’s offer was for R190 000.
Although Carol intended to accept Portia’s offer, she erroneously wrote a letter
to Jane, wherein she accepted Jane’s offer. Jane believes that an enforceable
contract was formed but Carol denies this. Apply the direct reliance theory and
advise if a legally binding contract was concluded between Carol and Jane.
Discuss fully and refer to case law in your answer. Do not apply the Consumer
Protection Act 68 of 2008.
Identifying the problem
The facts seemingly indicate that Carol and Jane have not reached
consensus based on the will theory. If so, it is necessary to determine if
Carol may be held bound to a contract with Jane, based on the reliance
theory, or whether Carol will escape liability. Only the direct approach to
the reliance theory will be considered.
Discussing the relevant law applicable to the problem, referring to the
relevant case law, AND applying the law to the facts of the problem
The direct reliance approach can only be applied after it has been
determined that Carol acted under a material mistake. It must thus be
determined whether agreement (consensus ad idem) as a contractual
basis exists between the parties, as required in terms of the will theory.
The first step is to determine whether agreement (consensus ad idem) as
a contractual basis exists between the parties, as required in terms of the
will theory. Consensus has three elements:1 the parties must seriously
intend to contract, be of one mind as to the material aspects of the
proposed agreement (the terms and the identity of the parties to it), and
be conscious of the fact that their minds have met.
In the present case the parties were not in agreement as to the
consequences they wished to create: Carol intended to accept Portia’s
offer, she erroneously wrote a letter to Jane, wherein she accepted
Jane’s offer. This is a mistake as to the
1
(Hutchison and Pretorius (eds) The law of Contract in South Africa (Oxford University Press Southern Africa
2012) 14 85):
