WEEK 2 Notes
Key concepts related to the law of obligation
Requirements to make a contract legally binding
Contract- An agreement between two or more parties that is enforceable
by law (Must meet certain criteria for it to be valid)
Consensus- A mutual agreement between parties involved in a contract
and serios intention( all parties must agree on certain terms)
Contractual Capacity- Is a persons legal ability to enter into a contract.
E.G
-u have to be of age (18)
-u should have the metal capacity to understand what u are signing
and entering into
-You cant be under the influence of drugs
Legality- The purpose and terms of the contract must be Legal.
Physical Possibility-The obligation outlined in the contract must be
physically possible to perform, must be specific and determinable with
certainty . If it is impossible to perform the contract can be void.
Formalities- Some contract s require specific formalities.
-Being in Writing
-Being witnessed( The sale of land typically needs a witness to sign)
Delict-This refers to Delictual Liability which involves wrongful conduct
that causes harm to others
-Jess drives(IS a action or omission)
-While on her phone(Wrongful, can either be negligent( Failure to
take reasonable care) or Intent(deliberate wrongdoing))
-Into Tebogo and as a result (Causation (Essentially mean there
must be a direct link between the wrongful act and the damage
caused))
Wrecks Tebogo’s car ( damage(The plaintiff must have suffered
some form of loss or damage)
Unjustified Enrichment- This basically means one person unfairly benefits
at the expense of another without a good reason(Theres no valid legal
reason)
-Example U accidently send your friend money and were going to
use that money to pay your water, My friend is now enriched (They gained
money)
-Its at my expense( I lost the money)
-Its unjustified because their was no reason for them to keep the
money.
-In this Situation the law would require my friend to return the
money as it is unfair for them to keep it.
Terminology
Legal fact- An event or situation that has legal consequences. E.G (
A car accident(Event ) lead to a lawsuit (Legal consequence)
Juristic Act- A deliberate human action intended to create legal
consequences. e.g. Signing a contract( You intend to be legally
bound to it)
Non-Juristic Act- and action or event that has legal consequences
but wasn’t intended to create them. E.g. accidentally damaging
someone’s property u may not have meant it but u will still be liable
to pay for damages.
Unilateral act- A Legal action done by one person (Writing a will)
Multilateral act- A legal action involving two or more people
(signing a contract)
Civil Obligation- A Legally enforceable duty( Paying back a loan)
Natural obligation- A moral or social duty that is not legally
enforceable (Helping a friend)
Unilateral Contract- One party performs while the other party
received. E.g Donating blood( Donor delivers blood bank received)
Reciprocal Contract- Both parties exchange performances
simultaneously. E.g Selling a house (one party pays while the other
party delivers the house)
Nominate Contract- Specific names contracts ( Contract of
employment)
KEY CONCEPTS
A Debtor and a creditor- Party with a right to claim, party with a
corresponding duty.
Performance- fulfillment or completion of a obligation or duty as
specified in a contract or agreement
Breach of contract- Failure to meet contractual obligations, does not
lead to termination of contract
Transfer of duties- can be done through Cession, delegation and
assignment,
-Cession Refers to the transfer of rights to someone else e.g if
I have a concert ticket and then sell my ticket I am selling my
right to go to someone else. The cedent transfers rights to the
cessionary
Delegation- a person gives another person a specific task to
perform while still retaining responsibility
Assignment-is the transfer of a task or duty with the
responsibility Aswell.
Contents of a contract
Essentialia- (Essential terms) These are the core terms that define the
contract and make it valid. (Without these the contract cannot exist). E.g.
in a sale the price and item are essential terms.
Naturalia- (Natural terms) Terms that are automatically included in a
contract by law, even if the parties don’t explicitly mention them however
parties can expressly exclude some of the Naturalia .(e.g. in a lease
agreement the landlords duty to maintain the property is a natural
term(Implied by law)
Incidentalia-( Incidental terms )These are extra terms that both parties
specifically agree on but they are not essential to the contract.
Null and void- A contract cannot exist if one or more requirements are
absent (Void no contract exists at all)
Voidable Contracts- Is a contract that comes into effect but can become
null due to improper conduct (like bribery or misrepresentation) or
defective process during its conclusion process.
Unenforceable contracts- this is a contract which means it creates a legal
obligation but the law cannot enforce them such as gambling u cannot
take Somone to court who owes u money due to gambling as gambling is
seen as harmful.
Consensus
Consensus is formed based on the intention of the parties to contract.
The law focuses on their true or presumed intentions, not just what
they declare.
Elements of Consensus
1. Agreement on Consequences – Both parties must have the same
understanding of the essential terms (bilateral act).
2. Intention to be Legally Bound – The parties must agree to create
enforceable obligations.
3. Awareness of Agreement – They must recognize that they have
reached consensus and communicate their intentions.
True vs. presumed Intentions: The law considers the real intentions
behind the contract, not just its appearance. For example, if a lease
agreement is actually a disguised sale for tax avoidance, the law will treat
it as a sale.
The Offer
Is a declaration of intent by one party with the intention of creating a
legally binding agreement once it is accepted and the contract comes into
effect. Its showing your intention to make a deal with another party.
Offer must be firm- The offeror must have serios intentions to be bound
by the offer It’s not a casual or social invitation (e.g., inviting someone to
a football match).
Complete Offer:
o The offer must include all necessary terms, conditions,
and provisions (including naturalia).
oThese terms become part of the contract if accepted.
Clear and Certain:
o The offer must be clear and specific, with no room for
confusion or further qualifications.
Formalities:
o Generally, no formalities are required, but the law or
parties may require specific formalities (e.g., writing or
signing).
Directed to a Specific Person/Group:
o The offer must be addressed to a specific person or
group, and they must be aware of it.
Offer: A Unilateral Act
A contract is a bilateral juristic act that leads to rights and duties.
An offer is a unilateral act that doesn’t create rights or obligations
on its own.
Rights and duties are only created once the offer is accepted.
Before acceptance, the offer can be withdrawn, unless the offeror
has agreed not to withdraw it.
Termination of an Offer:
An offer ends in the following situations:
1. Rejection of the Offer:
o If the offeree rejects the offer or changes the terms (makes
a counter-offer), the original offer is terminated.
2. Revocation of the Offer:
o The offeror can revoke (cancel) the offer before acceptance,
but only if the offeree is notified of the revocation.
3. Lapse of Time:
o If the offer has a time limit and isn’t accepted within that
period, it ends.
o If no time is specified, the offer ends after a reasonable
period.
4. Death of the Offeror or Offeree:
o If either party dies before acceptance, the offer is
automatically terminated.
5. Contractual Incapacity:
o If one party loses the ability to contract (e.g.,
becomes mentally ill), the offer is terminated and cannot be
accepted.
Acceptance of an Offer:
No contract comes into effect without acceptance.
Acceptance is a declaration of intent made by the offeree
approving the offer without reservations .
Once accepted, the offer becomes binding and cannot be revoked
or changed.
Requirements for a Valid Acceptance:
1. Unqualified, Clear, and Unambiguous:
o Acceptance must be absolute – no changes or reservations.
o If the acceptance is qualified (e.g., "I accept, but only if..."),
it’s not valid and is considered a counter-offer.
2. Made by the Offeree:
o Only the person to whom the offer is made can accept it.
3. Offeree Must Be Aware of the Offer:
o The offeree must know about the offer and its terms.
4. Serious Intentions to Be Bound:
o The offeree must intend to create legal obligations by
accepting the offer.
5. No Formalities Required (Generally):
o Acceptance doesn’t need to follow any specific formalities,
unless the law or parties require it (e.g., writing or signing).
Reservations and qualified is basically when they make a
counteroffer and do not accept the offer as is
Legal Consequences of Acceptance:
Acceptance means the offeree fully agrees to the offer without
any reservations.
This creates consensus (a meeting of the minds) and forms a valid
contract, provided all other requirements for a contract are met.
Once accepted, the offeror cannot revoke the offer, except in
specific cases related to the time and place of contract conclusion.
Time and Place of Contract Conclusion:
Determining the exact time and place where a contract is concluded is
important because it affects:
1. Parties' Status: Their age, mental capacity, or financial status
(e.g., insolvency) at the time of conclusion.
2. Applicable Laws: Which statutes or legal principles apply to the
contract.
3. Rights and Duties: When obligations (e.g., payment) and rights
(e.g., interest) start.
4. Jurisdiction: And determining jurisdiction in case of disputes
Where legal disputes will be handled (e.g., which court has
authority). Only an issue if the offeree and offeror did not conclude
the contract in the same town
Challenges with Time and Place:
If parties are in different locations (e.g., one in Durban and the
other in Pretoria), it can be unclear where the contract was
concluded.
For example, if an offer is accepted via email, the contract is usually
concluded where the acceptance is received (the offeror’s
location).
