2022 May Exam Memo - Law Of Contract (PVL3702)

QUESTION 1 State and briefly discuss any five (5) requirements for the formation of a valid contract. [10] QUESTION 2 A robbery occurred over the weekend at ABC Furniture Stores in a small town. At the time of the robbery, X who was an innocent bystander watched the robbery and also noticed the motor vehicle that was used by the robbers. The next day, ABC Furniture Stores which is a wellknown registered company, with many stores operating nationally, offers a reward of R50 000 in the local newspapers in the town, to anyone who provides information to the police which leads to the arrest of the robbers. X is not aware of the reward offered when he visits the police and informs them of all the information he remembered from watching the robbery. The police then use this material and valuable information to arrest the robbers. After the arrests are made by the police, X learns of the reward that was offered and he then claims the reward from ABC Furniture Stores but the company refuses to pay him. The robbers who were arrested are subsequently successfully prosecuted and convicted for the crime committed. Advise X fully about the prospects of success for instituting a legal claim against ABC Furniture Stores. Refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. [20] QUESTION 3 Set out the legal test for the Direct application of the reliance theory. Only set out the legal test. Do not discuss the legal test. [6] QUESTION 4 What are the two (2) requirements to prove, for the iustus error doctrine to apply? Only set out the requirements. Do not discuss these requirements. [4] QUESTION 5 X sold a painting to Y for R50 000. Assume that in terms of the “Price Control Regulations Act of 2015”, the maximum price that this type of painting can be sold for is R30 000. In terms of this Act, a contract of sale at a price in excess of the maximum amount prescribed for this type of painting, is void. Y was aware of the maximum regulation price prescribed for this type of sale, but X was not, when they were negotiating the sale price. X delivered the painting to Y, but Y refuses to pay the purchase price of R50 000. Will X succeed with a claim for the purchase price of R50 000, or with a claim for Y to return the painting to X? Refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. [20] QUESTION 6 X has been leasing a commercial property from Z for the past three years. The lease will come to an end on 30 September 2021. On 5 July 2021, X phones Z and offers to renew the lease for a further three years, which offer Z accepts whilst speaking to X. During this phone call, the material terms of the renewal agreement are agreed upon and X and Z further agree that the said material terms must be reduced to writing and signed by both parties, in order to have a written record of their agreement merely to facilitate proof of its terms. Subsequently on 5 August 2021, X is shocked to receive a letter from Z, advising X that there will be no renewal of the lease and that X should vacate the leased property on 30 September 2021. X and Z never reduced their oral agreement to writing. Advise X if a binding agreement with Z exists, for the renewal of the lease for a further three years. Discuss fully. Refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. [20] QUESTION 7 Andy and Jabu conclude a contract wherein it is agreed that Andy will paint Jabu’s office block by 31 August 2021, and Jabu agrees to pay Andy R100 000 upon completion of the work. When 80% of the work is completed Andy suddenly decides to go on vacation for a week and he is consequently unable to complete the job by 31 August 2021. Jabu does not cancel the contract, but he (Jabu) refuses to pay Andy any money for his (Andy’s) services rendered. It will cost Jabu R30 000 to complete the job. Advise Andy as to what amount (if any) he may recover from Jabu for the services that he rendered and on what basis. Discuss fully. Note that Jabu did NOT commit a breach of contract by refusing to pay Andy. Refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. [20]