Consumer Studies
Topic 5: The Consumer
Unit 1: Financial & Contractual Aspects of Which Consumers Should Take Note
Contracts:
Contract: a legally valid agreement between two or more parties where an offer is made, and its
terms and conditions are accepted.
Types of agreements:
- Oral agreement
- Silent agreement
- Written contract
Requirements for valid contracts:
- Consent (acceptance of the offer)
- All parties involved must have the capacity to contract (18 or older and of sound mind)
- The contract cannot be illegal
- The contract must comply with the necessary legal formalities
- Agreement and consent must be voluntary
- The contractual obligations must be possible to perform
Breach of contract:
- Breach of contract: when one or more parties fail to perform the obligations specified in the
contract
- Consequences:
o Go to court → fine/ jail sentence/ sue for damages
o Interdict can prevent the guilty party from continuing with his/her work
o Contract cancelled or declared void
Types of Contracts:
1. Employment contracts
▪ An agreement between an employer and an employee
▪ legal contract
▪ signed by the employer, the employee and two witnesses
2. Insurance policies
▪ An agreement between a consumer and an insurance company
▪ The insurance company undertakes to compensate the consumer in the case of loss
or damage to the insured goods.
▪ Consumer undertakes to pay monthly installments
▪ Household, motor vehicle, or life insurance, or medical fund/ hospital plan
Topic 5: The Consumer
Unit 1: Financial & Contractual Aspects of Which Consumers Should Take Note
Contracts:
Contract: a legally valid agreement between two or more parties where an offer is made, and its
terms and conditions are accepted.
Types of agreements:
- Oral agreement
- Silent agreement
- Written contract
Requirements for valid contracts:
- Consent (acceptance of the offer)
- All parties involved must have the capacity to contract (18 or older and of sound mind)
- The contract cannot be illegal
- The contract must comply with the necessary legal formalities
- Agreement and consent must be voluntary
- The contractual obligations must be possible to perform
Breach of contract:
- Breach of contract: when one or more parties fail to perform the obligations specified in the
contract
- Consequences:
o Go to court → fine/ jail sentence/ sue for damages
o Interdict can prevent the guilty party from continuing with his/her work
o Contract cancelled or declared void
Types of Contracts:
1. Employment contracts
▪ An agreement between an employer and an employee
▪ legal contract
▪ signed by the employer, the employee and two witnesses
2. Insurance policies
▪ An agreement between a consumer and an insurance company
▪ The insurance company undertakes to compensate the consumer in the case of loss
or damage to the insured goods.
▪ Consumer undertakes to pay monthly installments
▪ Household, motor vehicle, or life insurance, or medical fund/ hospital plan
