PVL3702: Law of contract notes
LEARNING UNIT 1: NATURE AND BASIS OF CONTRACT
Lesson 1:
KEY CONCEPTS
Contract: An agreement made by two or more people with the goal of establishing
one or more legal responsibilities, which the law finds binding on the parties
Obligation: An obligation is a legal bond between two or more persons, obliging the
one (the debtor) to give, do, or refrain from doing something to or for the other (the
creditor).
Law of contract: The law of contract refers to the body of legal rules and principles
that govern the formation, interpretation, and enforcement of contracts.
The notion of contract:
A contract is an agreement between 2 parties; however not all agreements can be
viewed as contracts
animus contrahendi serious intention to create legally enforceable obligations,
without animus contrahendi the contract isn’t enforceable. The law will maintain that
reasonable belief and respect the contract even in the absence of a real agreement
where one party does not have animus contrahendi but causes the other party to
believe that he or she does sincerely intend to commit himself or herself.
Legally binding agreements which are not contracts:
Certain agreements are meant to honour a duty by transferring rights, or to abolish
responsibilities rather than establish new ones. Distinctions are made for the following:
• obligationary agreements: one or more obligations are created i.e. sales and
lease agreements
• absolving agreements: obligations are discharged or extinguished
• real (or transfer) agreements: rights are transferred
traditio: to deliver; hand over; delivery of the thing
,The Parties' concurrent intentions to transfer and acquire ownership, respectively, are
known as the animus transferendi and animus acquirendi.
In contrast to the obligatory agreement that serves as the foundation for the transfer
(the causa traditionis), this mental component of traditio is a genuine or transfer
agreement.
Legally binding agreements that are more than just contracts
Like marriages, some agreements give rise to other obligations which cannot be
regarded as contracts, with marriages its primary purpose isn’t to create obligations,
even though it has obligations such as reciprocal duty of support. Therefore, it is
appropriate to see marriage as an arrangement sui generis that creates a relationship
that gives the partners a public identity.
A judgment by consent is one additional example. It is common for parties to a lawsuit
to reach a settlement that resolves some or all of the problems at hand. The parties
then request that the court issue a judgment or order that reflects the terms of their
agreement. If the court agrees, such a decision or order has two distinct personalities.
On the one hand, it is obviously a judicial act, carrying all the power, weight, and
consequences of any other court order or decision. However, because the court's
order was superimposed, it still maintains the essence of a contract between the
parties, although one with a higher standing.
Requirements of a valid contract:
• Consent: on all significant points of their agreement the parties opinions must
coincide, or at least seem to coincide
• Capacity: In order to enter into a contract, the parties must be able to
• formalities: they must be followed if the agreement is specially needed to be in
a specific format (such as in writing and signed)
• Legality: the contract must be permissible, meaning it cannot be forbidden by
law or common law
• Possibility: when the agreement is signed, the commitments made must be
able to be fulfilled
• Clarity: For the duties to be identified and upheld, the agreement's content
must be clear and determinable.
,The nature of a contract:
A contract is a juristic act which is an act to which the law attaches the consequences
intended by the parties. The conclusion of a contract is necessarily bilateral, or even
multilateral as there must be at least two parties to an agreement, and our law does
not recognise a unilateral promise (pollicitatio) as binding. Even where an agreement
imposes obligations on only one of the parties, as with the contract of donation, a
meeting of two minds is required: the donor’s offer or promise to donate must be
accepted by the donee.
A contract entails promises or undertakings on one or both sides. The undertaking
may be to make a certain performance, immediately or at a future date: to give
something (dare); to do something (facere); or to refrain from doing something (non
facere ).
Contract and the law of obligations
The concept of obligation
An obligation is a legal bond (vinculum iuris) between two or more persons, obliging
the one (the debtor) to give, do, or refrain from doing something to or for the other
(the creditor). Therefore, an obligation consists of a right and a duty: the creditor's
right to demand performance from the debtor and the debtor's obligation to fulfill.
The legal relationship created by an obligation is a personal one, binding only the
parties to it. As contrast to a genuine right (ius in rem), like the right of ownership,
which is rooted in the item held and supersedes the wider world, the right established
by the duty is a personal right (a ius in personam).
If the obligation is enforceable by action in a court of law (as is usually the case), it is
referred to as a civil obligation, to distinguish it from the less common natural
obligation
Contract and delict:
A delict is the wrongful and blameworthy conduct that causes harm to another person
such as defamation and negligent damage to property. This conduct obliges the
wrongdoer to pay compensation for the damages. The primary distinction between
, contractual and delictual responsibilities is that the former are often accepted freely by
the parties, while the latter are enforced by law regardless of the parties' wishes.
For this reason, a delict and a breach of contract are quite similar. Both are civil wrongs
that, under certain conditions, result in a responsibility to compensate with damages.
Claims for damages in a contract: money loss
Claims for damages in a delict: injury to property or person
When a plaintiff files a delict lawsuit, they must demonstrate that the behaviour in
question was improper and that the other requirements of delictual liability are met. To
establishing delictual responsibility, the behaviour must violate a plaintiff's right that
exists apart from the contract; just because it violates the contract does not necessarily
entail that the action is improper.
Contract and enrichment:
Unjustified enrichment: happens when there is a shift of wealth from one persons
estate to another without legal grounds for the shift of wealth.
It is important to place emphasis on the fact that the enrichment must be unjustified
and not unjust, because if unjust was the criteria being used, restitution would be
required for enrichment resulting from a severe or unfair contract however it isn’t law.
Read 1.5 and 1.6 of textbook.
LEARNING UNIT 1: NATURE AND BASIS OF CONTRACT
Lesson 1:
KEY CONCEPTS
Contract: An agreement made by two or more people with the goal of establishing
one or more legal responsibilities, which the law finds binding on the parties
Obligation: An obligation is a legal bond between two or more persons, obliging the
one (the debtor) to give, do, or refrain from doing something to or for the other (the
creditor).
Law of contract: The law of contract refers to the body of legal rules and principles
that govern the formation, interpretation, and enforcement of contracts.
The notion of contract:
A contract is an agreement between 2 parties; however not all agreements can be
viewed as contracts
animus contrahendi serious intention to create legally enforceable obligations,
without animus contrahendi the contract isn’t enforceable. The law will maintain that
reasonable belief and respect the contract even in the absence of a real agreement
where one party does not have animus contrahendi but causes the other party to
believe that he or she does sincerely intend to commit himself or herself.
Legally binding agreements which are not contracts:
Certain agreements are meant to honour a duty by transferring rights, or to abolish
responsibilities rather than establish new ones. Distinctions are made for the following:
• obligationary agreements: one or more obligations are created i.e. sales and
lease agreements
• absolving agreements: obligations are discharged or extinguished
• real (or transfer) agreements: rights are transferred
traditio: to deliver; hand over; delivery of the thing
,The Parties' concurrent intentions to transfer and acquire ownership, respectively, are
known as the animus transferendi and animus acquirendi.
In contrast to the obligatory agreement that serves as the foundation for the transfer
(the causa traditionis), this mental component of traditio is a genuine or transfer
agreement.
Legally binding agreements that are more than just contracts
Like marriages, some agreements give rise to other obligations which cannot be
regarded as contracts, with marriages its primary purpose isn’t to create obligations,
even though it has obligations such as reciprocal duty of support. Therefore, it is
appropriate to see marriage as an arrangement sui generis that creates a relationship
that gives the partners a public identity.
A judgment by consent is one additional example. It is common for parties to a lawsuit
to reach a settlement that resolves some or all of the problems at hand. The parties
then request that the court issue a judgment or order that reflects the terms of their
agreement. If the court agrees, such a decision or order has two distinct personalities.
On the one hand, it is obviously a judicial act, carrying all the power, weight, and
consequences of any other court order or decision. However, because the court's
order was superimposed, it still maintains the essence of a contract between the
parties, although one with a higher standing.
Requirements of a valid contract:
• Consent: on all significant points of their agreement the parties opinions must
coincide, or at least seem to coincide
• Capacity: In order to enter into a contract, the parties must be able to
• formalities: they must be followed if the agreement is specially needed to be in
a specific format (such as in writing and signed)
• Legality: the contract must be permissible, meaning it cannot be forbidden by
law or common law
• Possibility: when the agreement is signed, the commitments made must be
able to be fulfilled
• Clarity: For the duties to be identified and upheld, the agreement's content
must be clear and determinable.
,The nature of a contract:
A contract is a juristic act which is an act to which the law attaches the consequences
intended by the parties. The conclusion of a contract is necessarily bilateral, or even
multilateral as there must be at least two parties to an agreement, and our law does
not recognise a unilateral promise (pollicitatio) as binding. Even where an agreement
imposes obligations on only one of the parties, as with the contract of donation, a
meeting of two minds is required: the donor’s offer or promise to donate must be
accepted by the donee.
A contract entails promises or undertakings on one or both sides. The undertaking
may be to make a certain performance, immediately or at a future date: to give
something (dare); to do something (facere); or to refrain from doing something (non
facere ).
Contract and the law of obligations
The concept of obligation
An obligation is a legal bond (vinculum iuris) between two or more persons, obliging
the one (the debtor) to give, do, or refrain from doing something to or for the other
(the creditor). Therefore, an obligation consists of a right and a duty: the creditor's
right to demand performance from the debtor and the debtor's obligation to fulfill.
The legal relationship created by an obligation is a personal one, binding only the
parties to it. As contrast to a genuine right (ius in rem), like the right of ownership,
which is rooted in the item held and supersedes the wider world, the right established
by the duty is a personal right (a ius in personam).
If the obligation is enforceable by action in a court of law (as is usually the case), it is
referred to as a civil obligation, to distinguish it from the less common natural
obligation
Contract and delict:
A delict is the wrongful and blameworthy conduct that causes harm to another person
such as defamation and negligent damage to property. This conduct obliges the
wrongdoer to pay compensation for the damages. The primary distinction between
, contractual and delictual responsibilities is that the former are often accepted freely by
the parties, while the latter are enforced by law regardless of the parties' wishes.
For this reason, a delict and a breach of contract are quite similar. Both are civil wrongs
that, under certain conditions, result in a responsibility to compensate with damages.
Claims for damages in a contract: money loss
Claims for damages in a delict: injury to property or person
When a plaintiff files a delict lawsuit, they must demonstrate that the behaviour in
question was improper and that the other requirements of delictual liability are met. To
establishing delictual responsibility, the behaviour must violate a plaintiff's right that
exists apart from the contract; just because it violates the contract does not necessarily
entail that the action is improper.
Contract and enrichment:
Unjustified enrichment: happens when there is a shift of wealth from one persons
estate to another without legal grounds for the shift of wealth.
It is important to place emphasis on the fact that the enrichment must be unjustified
and not unjust, because if unjust was the criteria being used, restitution would be
required for enrichment resulting from a severe or unfair contract however it isn’t law.
Read 1.5 and 1.6 of textbook.
