THE OBLIGATION
● Contract = an agreement which creates obligations
→ Rights and duties arise from a contract
→ Obligations do not , but many follow from delicts / enrichment
CONTRACT TYPES:
➢ Unilateral Contracts
○ Creates obligations which only involve rights for one party and
duties for the other.
➢ Bilateral / multilateral Contracts
○ Creates rights and duties for both parties
➢ A Reciprocal Contract
○ A multilateral contract
○ Although obligations of both parties exist in exchange for one
another.
● Obligation = a relationship between at least 2 legal subjects
→ Possible for contracts to create obligations for more than one person
(Multiparty obligation)
→ Performance that is to be rendered in terms of the contract can be a
duty to do something (positive obligation) or to give something / not
do something (negative obligation)
Consequences of obligations:
1) Obligation = recognised by the law and once it is completed in
accordance with the contract, it cannot be claimed back
2) Obligation may be legally enforced
➢ Natural obligation
○ Not enforceable by law
○ If debtor fails to perform, performance cannot be claimed or
enforced
,CONTRACTUAL CAPACITY
Contractual capacity = the capacity to perform juristic acts, such as conclude
contracts, independently without the assistance of anyone else.
● Point of departure is that a person must realise the nature, scope and
consequences of his acts before he has full contractual capacity.
INFLUENCE OF AGE
INFANT:
● Someone under the age of 7
● Have no contractual capacity
● All contracts must be concluded on behalf of them by their parent/guardian,
however, they still hold the rights and obligations, not their parent/guardian
MINOR:
● Someone between the ages of 7-18
● Has limited contractual capacity
○ Can acquire rights and obligations provided they have the assistance
or permission of their parent/guardian
○ If they don’t have assistance or permission → they gain a right but not
an obligation.
REMEDIES TO COUNTER PARTY
➢ If contract is reciprocal
○ Minor will not be able to enforce performance unless he tenders
performance as well.
➢ Unjust enrichment
○ When the minor was enriched at the plaintiffs expense
○ Not linked to a juristic act → therefore, contractual capacity is
irrelevant.
, EXCEPTIONS
➢ Fraud by the minor
○ Misrepresenting himself as being 18 and older and could be
identified as a major → them minor will be bound by the contract
➢ Ratification
○ Once minor becomes a major → he can ratify agreements he
concluded while he was a minor
○ Becomes a fully operative contract → parents can ratify
agreements
➢ Statutory exceptions
○ A few exceptions such as a minor over the age of 16 can open a
savings account at a bank as well as form a will without
assistance.
➢ Emancipation
○ A minor becomes emancipated when his parent/guardian allow
him to independently conclude certain types of agreements
○ Requires that the minor has the ability to act independently
when it comes to financial or economic matters.
MENTAL CAPACITY
● Mental illness
○ Once a person is declared mentally ill, that person has no contractual
capacity whatsoever.
○ Thus all contracts must be concluded on his behalf
○ However, while a person = temporarily sane he has full contractual
capacity at the moment of the transition.
● Prodigals
○ A prodigal = someone who due to defect as judgement or character
recklessly squanders his assets.
○ When deemed a prodigal by the high court he has limited contractual
capacity → can acquire rights but no obligations
THE INFLUENCE OF MARRIAGE
● Unless an antenuptial contract is signed all marriages are in community of
property → I.E. they share all assets and liabilities equally.
, AGREEMENT & RELIANCE OF
AGREEMENT
LAW OF A CONTRACT
Foundational principles of law or contract:
● FREEDOM OF CONTRACT:
○ Everyone = free to contract with whomever they wish to on whatever
terms they want to contract on.
● SANCTITY OF CONTRACT:
○ People will be held to the contract that they have made to the terms
they have agreed on.
A consensus = the latin term for what lawyers see as the agreement the
parties have reached.
Parties must agree on 3 things:
1. Who are the parties?
2. The terms of the contract
3. The intention to create legally enforceable obligations (animus contrahendi)
★ If one or more of these are not agreed on by the parties → faced with a case
of mistake / lack of agreement. Therefore no valid contract unless court
enforces reliance theory.
‘Will theory’ → Looking for external manifestations (intentions) of the party through
declarations
An agreement = the basis for contractual liability
It must have:
● Joint intention
● Intention to create obligation
● Consciously agree
● Will made known through declaration of intent = offer and acceptance
Declaration of will : express / tacit / electronic
● Contract = an agreement which creates obligations
→ Rights and duties arise from a contract
→ Obligations do not , but many follow from delicts / enrichment
CONTRACT TYPES:
➢ Unilateral Contracts
○ Creates obligations which only involve rights for one party and
duties for the other.
➢ Bilateral / multilateral Contracts
○ Creates rights and duties for both parties
➢ A Reciprocal Contract
○ A multilateral contract
○ Although obligations of both parties exist in exchange for one
another.
● Obligation = a relationship between at least 2 legal subjects
→ Possible for contracts to create obligations for more than one person
(Multiparty obligation)
→ Performance that is to be rendered in terms of the contract can be a
duty to do something (positive obligation) or to give something / not
do something (negative obligation)
Consequences of obligations:
1) Obligation = recognised by the law and once it is completed in
accordance with the contract, it cannot be claimed back
2) Obligation may be legally enforced
➢ Natural obligation
○ Not enforceable by law
○ If debtor fails to perform, performance cannot be claimed or
enforced
,CONTRACTUAL CAPACITY
Contractual capacity = the capacity to perform juristic acts, such as conclude
contracts, independently without the assistance of anyone else.
● Point of departure is that a person must realise the nature, scope and
consequences of his acts before he has full contractual capacity.
INFLUENCE OF AGE
INFANT:
● Someone under the age of 7
● Have no contractual capacity
● All contracts must be concluded on behalf of them by their parent/guardian,
however, they still hold the rights and obligations, not their parent/guardian
MINOR:
● Someone between the ages of 7-18
● Has limited contractual capacity
○ Can acquire rights and obligations provided they have the assistance
or permission of their parent/guardian
○ If they don’t have assistance or permission → they gain a right but not
an obligation.
REMEDIES TO COUNTER PARTY
➢ If contract is reciprocal
○ Minor will not be able to enforce performance unless he tenders
performance as well.
➢ Unjust enrichment
○ When the minor was enriched at the plaintiffs expense
○ Not linked to a juristic act → therefore, contractual capacity is
irrelevant.
, EXCEPTIONS
➢ Fraud by the minor
○ Misrepresenting himself as being 18 and older and could be
identified as a major → them minor will be bound by the contract
➢ Ratification
○ Once minor becomes a major → he can ratify agreements he
concluded while he was a minor
○ Becomes a fully operative contract → parents can ratify
agreements
➢ Statutory exceptions
○ A few exceptions such as a minor over the age of 16 can open a
savings account at a bank as well as form a will without
assistance.
➢ Emancipation
○ A minor becomes emancipated when his parent/guardian allow
him to independently conclude certain types of agreements
○ Requires that the minor has the ability to act independently
when it comes to financial or economic matters.
MENTAL CAPACITY
● Mental illness
○ Once a person is declared mentally ill, that person has no contractual
capacity whatsoever.
○ Thus all contracts must be concluded on his behalf
○ However, while a person = temporarily sane he has full contractual
capacity at the moment of the transition.
● Prodigals
○ A prodigal = someone who due to defect as judgement or character
recklessly squanders his assets.
○ When deemed a prodigal by the high court he has limited contractual
capacity → can acquire rights but no obligations
THE INFLUENCE OF MARRIAGE
● Unless an antenuptial contract is signed all marriages are in community of
property → I.E. they share all assets and liabilities equally.
, AGREEMENT & RELIANCE OF
AGREEMENT
LAW OF A CONTRACT
Foundational principles of law or contract:
● FREEDOM OF CONTRACT:
○ Everyone = free to contract with whomever they wish to on whatever
terms they want to contract on.
● SANCTITY OF CONTRACT:
○ People will be held to the contract that they have made to the terms
they have agreed on.
A consensus = the latin term for what lawyers see as the agreement the
parties have reached.
Parties must agree on 3 things:
1. Who are the parties?
2. The terms of the contract
3. The intention to create legally enforceable obligations (animus contrahendi)
★ If one or more of these are not agreed on by the parties → faced with a case
of mistake / lack of agreement. Therefore no valid contract unless court
enforces reliance theory.
‘Will theory’ → Looking for external manifestations (intentions) of the party through
declarations
An agreement = the basis for contractual liability
It must have:
● Joint intention
● Intention to create obligation
● Consciously agree
● Will made known through declaration of intent = offer and acceptance
Declaration of will : express / tacit / electronic
