COMMERCIAL LAW OF ZIMBABWE- CONTRACT, PART 1 : THE ESSENTIALS OF A VALID CONTRACT

BY

PETER L. VOLPE, BA(Lond), ~~ LLB(Cantab) of C.ray's Inn, Barrister at Law

Advocate of the High Court of Zirrbabwe Senior ~ecturer in Law, University of Zimbabwe

This is the first of a series of articles in whiah the author will present the aommercial law of Zimbabwe in a rrunner easily assimilable by students studying by aorrespondence or at teahnieal colleges, who do not have ready access to the law reports.

The author follows closely the presentation of the .subject by Gibson, Souti1 African Mercantile and Company Law and also wishes to acknowledge his indebtedness to Wille and Millin's ·Mercantile Law of South Africa; Ke:r>r, The Principles of the Law of Contract; Christie, Rhodesian Commercial Law; Kahn, Contract and Mercantile Law through the Cases; Far lam and Hatha.wtl.y, A Case Book o"n the South African Law of Contract .

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PART 1

SECTION 1. 1.1 1.2

SECTION 2. 2.1 2.2

2.2.1

2.2.2

2.2.3

2.3

2.4

2.5

2.6

SECTION 3.1

3.1

THE RHODESIAN LAW JOURNAL

TABLE OF CONTENTS

THE ESSFJ{fiALS OF A VALID CONJRACT

INTRODUCTION refinition of contract Essentials of a valid contract

COMMUNICATION OF INTENTIONS Need £or offer and acceptance Making an offer ·

a. It must define all the terms on which agreement is sought

b. It must be consistent with the­essentials of contract

The offer must be finn and deliberate with an intention of its being accepted

a. Advertisenents b. 'Feeler' c. 'Self-service' stores·

The offer must be comrm.micated to -the person with.whom it is intended that the contract should be made The offer may be .brought to an end by

a. Revocation b. Lapse c. Rejection

Accepting the offer a., The acceptance must be made during

the life of the offer b. It must be in terms of the offer

and unequivocal c. It must be consistent with the

essentials of contract d. It must be in manner prescribed by

the offeror Special terms

a. Signed documents b. Tickets, receipts and programmes c. Notices incorporated into contracts

Implied terms a. Terms implied by law b. Terms il'lplied on the facts

Agreements by condtict

CONTRACTUAL CAPACITY Agreement must be within parties' contractual capacity

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3.2 3.2.1

3.2.2 3.3

3.4 3.5 3.6 3.7 3.8 3.9 3.10

SECTION 4. 4.1 4.2

SECTION 5. 5.1

5.2

5.3

COMMERCIAL LAW OF ZIMBABWE - CONTRACT

Minors-t1:n8.ssisted contracts void except in case of

a. Enric:lurent b. Fraudulent misrepresentation c. Tacit emancipation d. Ratification e. Statutory exceptions

Assisted contracts prima facie valid Muried women subjEkt to husband's marital power cannot contra tt except in case of - a. Enrichment

b. Necessaries c. Public trader d. Authority of the court e. Statutory exceptions

Mentally ill persons Drunk persons Prodigals Insolvent uersons Alien enemies Artificial persons Illegal associations

SERIOUS INTENTION TO CONTRACT The parties rrrust seriously intend to contract Where they do not intend that binding legal relations will flow from their agreenent it is not a contract, for example

a. Agreerents of a social nature b. Those binding in honour only c. Those excluding courts' jurisdiction d. Those entered into as a jest, sar­

castic overstaterent or the like e. Those entered into for soroo ulterior

liPtive and without intending to be pound

VAGUENESS The agreerent nrust not be vague as where

a. It depends upon a condi tioli .that the promisor will be bound if he so wishes

b. The language is so uncertain that it cannot be decided what was agreed upon

c • The agreeroont is not final and there· are still teDJS to be negotiated

Fact that contract appears incomplete or uncer­tain does not render it void if the court can detennine rooani:ng on evidence before it -Where rooaning of _written contract is vague or a:nbigoous the following rules assist the court in arriving at the parties' intentions

a. Words are- given 'plain, ordinary and popular meaning unless it appears

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SECTION 6. 6.1 6.2

6.3

6.4

SECTION 7. 7.1

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THE RHODESIAN LAW JOURNAL

from the contract that parties intended them to beat different meaning, or' ordinary sense necessarily leads to absurdity, or there is evidence to show special trade usage . or that in trade or p:ace term bears special meaning

b. When contract is capable of more than one meaning the court will place that construction upon it which upholds it

c. Ambiguous clause is interpreted so as to bring it into harmony with the Ml.ole of the document

. d. Where later provision qualifies earlier, regard is had to qualification in inter-preting doclli'Tent _

e. \•!hen all the ordinary rules have been exhausted recourse may be had to rule that writing is·interpreted against the party Ml.o drew up the document; and if an insertion is made it will be interpreted against the party respon­sible for it

Where written contract is interpreted no oral evidence may be received Ml.ich contradicts, alters, adds to or varies the written terms, except where ambiguous words are used or words are used in technical or spec:.al sense extrinsic evidence is admissible to exp:ain the broad con­text in which they were used

POSSIBILITY OF PERFORMANCE Performance must be possible Relative impossibility (performance impossible

.for promisor but not everyone: does not render contract void Even in cases of absolute impossibility contract is valid if promisor has warranted that per­formance is possible If contract becomes impossible after it has been entered into it is extinguished as soon as it becomes impossible (see Super1~ing Impossibility of Pe:rformance in 4. 3 in Part 4)

LAWFULNESS The agreement must be lawful Agreements prohibited by statute

a. Prohibition referring to form of contract b. Prohibition referring to performance

Agreements prohibited by common law Agreements in restraint of trade

a. Sale of goodwill b. Trade regulating agreement c. Covenant between employer and employee..:

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7.3.3

7.3.4 7.4 7.5

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COMMERCIAL IAW OF ZIMBABWE - CONTRACT

Agreements interfering with justice a. ARJ'eement to commit, or involving

the commission of a crime or delict b. Agreement to stifle a prosecution for

crime c. Agreement allowing the parties to avoid

judicial renedies and to take the law into their own hands

Agreements derogating fram marriage a. Agreement to terminate a marriage

or in consideration of termination of a marriage

b. Agreement to promise marriage for reward.

Agreenents encouraging sexual imnxn:ality Severability of unenferceable provisions The 'relations between parties to an unlawful agreement

a. An unlawful agreement is unenforceable at law

b. A party who has fulfilled his obliga­tions under an unlawful, agreement is not, in general, permitted to reclaim what he has performed

7 .5'.1 The ex turpi oousa rule -7.5.2 The in pan deUato (or par del.iatum) rule

a. Strict application of the rule b. Relaxation c. Non-application

7. 6, Betting and wagering contracts

SECTION 8 8.1

8.1.1 8.1.2

8.1.3 8.1.4

8.2 8.3

MISTAKE The parties must be of the sane mind as to the subject matter The mistake must be one 'of fact It must concern a material fact

a. Histake as to the nature of the agreenent ·

b. Mistake as to the identity of a party

c. Mistake as to the identity of the subject matter

It must be a reasonable mistake The party setting up the mistake mus.t not be estopped from doing so Documents mistakenly signed Rectification

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CONTRACT

PART 1. 1HE ESSENTIALS OF A VALID CONrRACf

SECTION 1. INTRODUCTION

1.1 Definition of Contract

A contract is a lawful agreement, made by two or rore persons within the limits of their contractual capacity, with the serious intention of creating a legal obligation, communicating such intention, without vagueness, each to the other and being. of the same mind as to the subject matter, to perform positive· or negative acts which are possible of performance (Gibson 1977 p.9).

Coliiillercial law consists of a number of different kinds of contract The conmDnest forms are sale, lease, partnership, agency, rortgage and suretyship. To each kind of contract there are conmDn _ principles and the function of this handbook is to set out the rules 1vhich apply to all contracts. Subsequent handbooks will look at those rules peculiar to special kinds of/contract.

1.2 P,ss~nt~ls of a valid contract

The essentials of a valid contract found in the above de,finition are -

(1) The parties must co~unicate their intentions to each each other.

( 2) The agreement must be within the limits of the parties' contractual capacity. ·

(3) The parties must .seriously intend to contract.

(4) The ·agreement must not be yague.

(5) performance must be possible.

(6) The agreement must be lawful.

(7) The parties must be of the sarre mind as to the subject 'matter.

SECTION 2. COMMUNICATION OF INTENTIONS

2.1 Need for offer ~:~nd acceptance

Parties cornillunicate their intentions to each other by one party making an offer and the other party accepting that offer.

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COMMERCIAL LAW OF ZIMBABWE - CONTRAcr 13

Fo'r example -

(a) You may want to sell your house. I want to buy it. You ask me to buy your house for ~20 000 lvhich is your offer. I may agree to buy the house at that price which is my acceptance of your offer. Your offer and my acceptance constitute the agreement ..

(b) · Sometimes there is no discussion. The parties express their intentionS by conduct. When you get on a bus you offer the fare which the driver/conductor accepts by taking the money and giving you a ticket.

(c) Similarly; when you buy a newspaper .there is_ usually no discussion. You offer the price of the paper and the newsvendor accepts by taking the money and handing you a newspaper. ,, ·

The necessary agreement, whether express ((a) above) or implied ((b) and (c) above), will always manifest itself in the form of an offer and an acceptance. By making an offer, a person (the offeror) expresses his willingness to become a party to a contract according to the terms expressed; if the offer in these terms is accepted by another person (the offeree), both parties are contractually bound.

Making an offer

Before an offer can lead to a binding contract, the offer must -

a. define all the ·terms on which agreement is sought

An offer which leaves certain terms to be discussed at a later date is.. not a complete offer.

0 K Bazaars v Bloch 1929 WLD 37. O.K. ne-gotiated through an estate agent for the purchase of ~ 's shares in a property-owning company. t-1arcus, an employee of the estate agent, said to B: 'Look here, we have been arguing this matter quite long enough, close at forty-three ( 43 000) and we will take · 500 commission'. B said, "All right'. ','ihen B suggested a possible increase in the price, M said, 'Leave the matter as arranged'. Again B said, 'All right'. M then told B that a deed of sale should be drawn up by his attorney, adding ''Let the two attorneys lvrangle between therr6el ves'. M admitted that a number of matters lvould have to be discussed by the lawyers and conceded that the agreement would have to be reached on these before a deed of sale could be drawn up. HELD, the bargain between M and B was not a final and complete bargain.

b.· be aonsistent w~th the essentials of contract

The offer must be lawful,. made within the limits of the offeror's contracted capacity, made seriously with the· intention that a binding contract shall result on ~cceptance, communicated to the

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other party, not vague, and possible of perfonnance (the essential that the parties ·must be of the same mind as to the subject matter becomes relevant only after an offer has been accepted). Of these essentials consideration will be given no\v to the serious intention of the offeror and the necessity for tommunication and the other essentials will be dealt with later.

2.2.1 The offer must be firm and deliberate with an intention of its being aaaepted and not a mere invitation to do business, which is illustrated by the following cases.

a. Advertisements

Crawley v R 1909 TS 1105. A shopkeeper in Johannesburg advertised a particular brand of tobacco at a cheap price, having a placard .outside his shop on which the price was shown. C entered the shop, bought a pound of tobacco and left.. He then re-entered the shop and asked for another pound. The shopkeeper refused. C refused to leave the shop without the tobacco. HELD, the advertisement was not an offer and a contract was not, therefore, concluded when C tendered the price. Chad been rightly con­victed tmder a Transvaal Ordinance for not leaving the premises when requested.

While generally the effect of an advertisenent is that the customer is invited to offer the marked price for the article and the tradesman can please himself whether he accepts the offer, an advertisement aan amount to an offer where a 'general offer' is rrade to dt:J business with whoever shaU pei'form aei'tain aats.

B'loom v Amei'iaan Swiss Watah Co 1915 AD 100. A company, from whom diam:mds and jewellery had been stolen, by means of an advertisement in the press offered £500 for information to be given to the C .I .D. wi\ich would lead to the arrest of the thieves and the recovery of the stolen property. B supplied the informa­tion in ignorance of the offer and afterwards, having heard of it, he claimed the reward. · B was unsuccessful. .HELD, in order to establish a legal tie between the parties the information would have to be given, in consequence of the advertisement, by a person : acting on the faith of the offer.

-Lee v Amei'iaan SvJiss Watah Co 1\)14 AD 121. Mrs. Lee and several others gave the necessary information in response to the company's

1 advertisement. HELD, she was not entitled to recover as on a true construction of the advertisement it was only intended to offer the reward to the first giver of information, and she was not the first.

Car'li'll v Carbo'lia Smoke Ba'lt Co [1893J 1 QB 256. A comp3ny advertised thaf it would pay .£100 to any user of a 'smke ball' manufactured by i.t in the event of the user catching influenza. C used the smke ball but none the less caught influenza. HELD, the offer Awas a valid offer duly accepted hy C when she used the smke ball and she was entitled to fhe £100.

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COMMERCIAL IAW OF ZIMBABWE - CONTRACT 15

b. 'Peeler'

Efroiken v Simon 1921 CPD 36 7. S, a Johannesburg broker, sent E, a Cape Town broker, a telegram to the effect that he had a seller of 3 000 bags of oats, adding the terms of deli very. The Cape Town broker tried to close the deal. HELD, the telegram was not an offer and hence not capable of acceptance.

On the other hand it may not be ·a 'feeter' but a firm offer.

Brown & Co v Jaaobson 1915 OPD 42. J wrote saying "should you require a guarantee from me I am quite willing to do so .•• Trusting you agree to my proposal". B & Co replied 'We beg to state that we shall be very pleased to agree to your request in consideration of your guarantee". HELD, there was a contract of

·guarantee.

c. 'Setf-ser-Viae' stores

Pharmaaeutiaat Soaiety of Great Britain v Boots Cash Cherrtlsts (Southern) Ltd [1953] 1 All ER 482. B displayed for sale drugs, the sale of-which was prohibited under the Phannacy and Poisons Act, 1933, except under the supervision of a registered phannacist. The shop was a 'self-service' shop, the customers selecting the articles they wanted and placing them in a wire basket provided paying ,at the cash-desk at the exit.. A registered phannacist was ' on duty near the cash-desk to prevent the reooval of a drug from the shop' by a customer if he thought fit. HELD, the sale took place when the cashier aecepted payment and it was under proper supervision.

The offer 17TU.St be aommu.niaated to the person with whom it is intended that the contract shoutd be made

An illustration <>f. this is where a 'general offer' is made in an advertisenent of a reward for infonnation. Acceptance only takes place when the informant gives information after reading the advertisement. If he gives information ignorant of the advertisenent, there is no contract because an offer has not beeu communicated to him that he could accept.

See Btoom v American Swiss Watah Co (2.2;1 above).

If an offer is rrr:r.de to a speaific person, it cannot be aaaepted by a third person.

Levin v DPieprok. Properties (Pty) Ltd 1975 (2) SA 397 (An). The nane Wentzel had been inserted in a printed form as being the person to whom an offer to purchase certain ilmvvable property was addressed. When the offeror L signed the docwrent it '"as uncertain whether the property was owned by l'l or by a company in which W had. an interest. The estate agent \vho procured J~'s signature discussed with him the possibility of a company being the owner and it was arranged that in soch an event instead of L

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purchasing the land there should be dra"n up an o£fer to purchase the shares in the company and the shareholders' loan accounts. In the meantime, it .was decided to leave W's iiame in the written offer. In fact, the company proved to be the O'-ner of the property, and when the estate agent discovered this he altered the written offer so as to convert it into one address·ed to the company. W there­upon signed the docl.l!rent "for and on behalf of" the company. HELD, no valid contract of sale had been concluded. Whatever the offeror's state of mind might have been prio:r to the sigiling of the offer, once he had actually.signed it.he had made his choice and had manifested an intention to contract with Wand with W only.

Blew v SnoxelZ 1931 TPD 226. B addressed letter signed by himself to "Messrs Richard R Currie Ltd" in whieh he offered to buy certain land. l\essrs R C Ltd were not the owners of the land, but there was nothing to indicate that xhe offer was made.to any person other than Messrs R C Ltd. This offer was accepted in writin)!, signed by himself, by S who was the O\vner of the land. On the same day l\essrs R C Ltd notified B that. the owner of the land had accepted his offer. HELD, there was no completed contract since the offer 1 on the face of it was made to l\essr5 R C Ltd and could therefore not be accepted by S. . ·

An offer' may be brought to an end in the following ways

a. Revocation

Offeror may revoke his offer at any time before acceptance has. taken place. The revocation is ineffective until brought to the knowledge of the offeree. Revocation may occur by implication.

Greenberg v Wheatcroft 1950 (2} PH A56 (W). On 6 June \\1 signed a written offer to buy certain land from G, the owner. On 7 June W telephoned G's agent, revoking the offer. On 8 June G signed an acceptance on the doctunent containing the written offer. HELD,· the offer had been effectively revoked on 7 June and was no longer open for acceptance.

Union Gove1"1'1ment v Wardle 1945 EDL 177. W, a farmer, had obtained assistance from the Farner's Assistance Board. He got into difficulties and proceedings were taken against him. On 29 May he applied to the Board to retain (buy) rcvernment Stock for the full amount of debt due. On 29 June the Board 1 s Secr~tary wrote agreeing to W 1 s request. Meanwhil~, W wrote on 24 June to the magistrate, who had authority to receive the letter as the Ccvernment 1s agent, that he was unable to give a definite decision in the matter. HELD, W1s application of 29 !ltly was an offer which the rcvemment purported to accept by the letter of 29 June, but as by the letter of. 24 June W clearly, by implication, withdrew his offer this was no longer capable.of acceptance. on 29 June.

An offer may be irrevocable if the offeror binds himself by a separate contract to keep an offer open for a specific time. The offeree is said to have an option for that period and, in the

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COMMERCIAL,LAW OF ZIMBABWE -CONTRACT

event of breach of the contract by the offeror, i~ entitled to damages.

17

Boyd v NeZ 1922 AD 414. N gave R an option for four m:mths to purchas.e his £ann. Immediately afterwards N pennitted other persons to prospect' on the £ann, as a result of which the f,overn­tnent issued notice of intention to proclaim the £ann as an alluvial digging. M:lanwhile, in ignorance that prospecting was pennissible, B made arrangerents for cutting the fann into plots and selling them. Because of N' s action B had to abandon his plans and suffered. damages. HELD, B had the full period of the option for considering whether he would buy and as N had broken this agree­ment an action fOr damages would lie.

The offeree may cede the option to a third person who may then accept the offer.

Hersch v NeZ '1948 (3) SA 686 (AD). N, a usufructuary of certain farms, granted to IH and AH an option to purchase the farms, falsely representing he. had the mmer•s authority. Thereafter EH and AH ceded ,the op,tion to IH who duly accepted and exercised it on the same day, notifying N and the owner accordingly. The 0111Iler having repudiated the sale IH sood N for damages. HELD, there being nothing in the wording of the option to connote that it was given only to the optionholders personally, it lvas capable of being ceded.

b. · Lapse

An offer lapses on the death or insanity of either party, after a reasonabZe time, if not accepted within the pre8cribed time, or . if ~he in~ended performance becomes iZZegaZ or impossible 0~essels 1951 paras 240-250).

Laws v Rutherfur>d 1924 AD 261 (on appeal from SR) . Mrs R gave L a three months' option to enter into a contract to cut timber on her fann which expired on 26 July. Having heard nothing Mrs R on 27 July asked L to remove certain plant he had erected on the fann. · On 28 July by letter and 29 July by telegram L purported to exercise option. Held, as L had not notified his acceptance within the time fixed, rule nisi interdicting him from cutting timber had·properly been made,final.

Dietrichsen v DietPichsen 19ll TPD 486. A document was drawn up on 1 Noverrber 1907 stating that FJD and MHD sold part of a fann to their brother JJD. FJD and MHD signed the document but JJD did not. It was agreed that the document was to be converted into a fomal contract and typed, but when this was done FJD and MHD refused to sign the typed deed. JJD th\'ln said he "'as going to

·sign the document on 1 Noverrber 1907 but did not in fact do so until the following February nor tell his brothers· that he had signed the document until long afterwards. HELD, an offer to sell land on 1 November 1907 could not be accepted in February of the fOllowing year.. To .titrn an offer into a consensual contract,

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the offer must not only be accepted, but the acceptance must be communicated to the offeror within a reasonable time after the offer has been made. '

Ra1118gate Viatoria Hotel Co v M:m,tefiore (1866) LR 1 Ex 109. M applied.for shares in an hotel company on 8 June, but no .allot­ment was made till 23 lbvenber. On 8 lbveni>er he withdrew his application .. HELD, the allotment must be made within a reasonable time, it was not so mde, ~d the offer had lapsed.

c. Rejeation

An offer comes to an end if 'rejected by the offeree, either by COlllllliDicating an express rejeation to the offeror or by making a aounter-offer. The cotmter-offer is itself open for acceptance by the original offeror.

Watermeyer v MuPPay 1911 AD 61. W offered to sell his fann to M on certain tenns. M did not accept tmconditionally but made a cotmter-offer, stipulating a different date for the payment of a down-payment. W was not prepared to deviate from the original tenns. M then purported to accept the original offer. HELD, the original offer had come to an end on the cotmter-offer being made and was no longer open for acceptance and there was thus no contract.

Where there is a mere requthest fo£r info1'f11tltion. this is not a b .,. refusal of the offer and· e of e:r remins open for acceptance y the original offeree.

Stevenson v MaLean (1880) 5 QBD 346. M wrote S offering to sell 3 800 tons .of iron at 40s a ton. S telegraphed to M "Please wire whether you Would accept forty for deli very over two m:mths, or if not, longest time you would give". M did not reply. S then sent telegram stating they had secured his price. HELD, S 's . first telegram ought not to be construed as a rejection of M's offer but merely as an erquiry whether he would nvdify the tenns of it and M's offer was still open when S accepted it by sending the second telegram.

Bl;!t it TTTU8t be clea:P that there is, in fact, an 1.1:71Bquivoaal acceptanae. '

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ACC Bio Kafee v Raad van Kumtore Wa1'fl'badplase 1957 ( 4) SA 183 (T) • R made an offer to A by letter offering to buy certain articles for moo. A wrote in reply that it was prepared to accept the of~er but added -that the date of purchase would be acknowledged on receipt of R's cheqte. HELD, the addition neant that there was to be no sale until the cheque had been received. There was thus no unequivocal acceptance but a conditional acceptance and, there­fore, a counter-offer. lb contract had, accordingly, come into existence.

2.3 Accepting the offer

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l COMMERCIAL LAW OF ZIMBABWE - CONTRACT 19

Before an acceptance can tum a valid offer into a contract, the aaaeptanae must be -

a. made during the life .of the offer

The offer nrust be accepted before it lapses. or is revoked (a. and b. in 2~2.3 above).

b. in terms of the offer and unequivoaal

The acceptance nrust be of the terns of the offer. If it is subject to conditions, it is not an acceptance but a counter-

. offer (Watermeyer v Murray and ACC Bio Kafee v Raad van Kurotore WarmbaJplase in 2.2.3 c. above).

There nrust. be no ambiguity or clt>ubt as to whether acceptance has taken place or not.

Van .Jaarsveld v Aakermann 1975 (2) SA 753 (AD). A had given PH van J an option in writing "to purchase or sell" certain premises at a price of Rl55 000. PH van J had ceded his rights under the option to CP van J. The following month CP van J had accepted the option in writing without making it clear whether he accepted the option to purchase 9r the .option to sell. HELD, an agreement can only occur :when ·an offer is accepted in a clear and unarrbiguous manner so that there can be no mismderstanding. As CP van J had accepted the offer of both rights, his acceptance was not unambiguous

Boerne v Harris 1949 (1) SA 793 (AD). A lease of a hotel \vas entered into on 15 April 1942 for five years, with a clause allow­ing the lessee B to renew the lease for a further five years by giving notice at least six months before the end of the initial five years. Cl:f! 5 October 1946 B 's attorneys advised the lessor f•lrs H by letter that B was exercising the right of renewal as from 15 October 1946 (instead of 15 April 1947). Mrs H did not acknow­ledge receipt of the letter. HELD, the acceptance of an offer nrust be mequivocal, i.e. positive and unarrbiguous. B's letter was not: He had not exercised the right of Tenewal.

c. aonsistent with the essentials of aont:ruat

The acceptance nrus t -

(i) be lar.Jful

Where sales on a Sunday are prohibited by statute, an acceptance on a Smday of a valid offer to sell cattle made on the Saturday before would not create a contract (Brandt v Bergstedt in 7.5.2 a. below).

(ii) be made within the limits of the offeree's aontraatual aapaaity

If an unassisted minor accepts an offer from an intend­ing spouse to enter into an antenuptial contract, the acceptance is invalid and there is no contract (F:deZstein

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v Edt!flstein NO in 3.2.1 belovl).

be serious and li'Klde with the intention that a aontmat should,be created

The offer· can be accepted by express words (Stevenson: ·V MaLean in 2.2.3 c. above) or acceptance inferred from the offeree's conduct (Collen v Rietfontein Engineering Works in 2.6 below).

(iv) be aommu~ica~ed to the offeror

11Ie acceptance of an offer must be collli1IUilicated to the offeror (Dietrichsen v Dietriahsen in 2. 2. 3 b. above) . The offeree nrust show in some way h1:s intention to be bound (Co?len v Rietfontein Engineering Works below).

In rare ca.Ses this may .be taai t, for examole >vhere silence amounts to acceptance but only if in law there is a duty to speak. ·

Benoni PrcHluce & Coal Co v Gundelfinger 1918 1PD 453. B asked a broker, Kantor, to obtain matChes for them for

· innuediate deli very. K contacted G who had none at Pretoria but some on rail from Durban and was prepared to sell subject to arrival. ·K bought three cases, sent out 'bought' and 'sold' notes in identical terms to B and G whiCh did not mention that the matChes were sold 'subject t() arrival'. The matches arrived two weeks

.... later and B refused to accept them. HELD, the notes do not per se constitute a bindjng contract for they only indicate to eaCh party what the broker has done on his behalf. There is a duty on each party to scan the notes within a reasonable time and accept o.r reject them. If a party does not reject the note but is. silent, the silence is equivalent to consent.

_It seldom pays the offeror to cazyy out work rrerely on the assumotion that the offeree wants it done. It is always adVisable to get consent first.

Skywork (Pvt) Ltd v Peter Scates (Pvt) Ltd G-5_.210-78. PS da.rraged his plane while leased to the police and in terms of the lease sent it to S for repairs. In addi-tion to repairing the crash damage, S knowing that the plane's certificate of airworthiness was due for renewal1 wrote toPS offering to do tte necessary.check 3 for a lapour charge of $1 201J plus parts and materials. PS never replied and never gave S an express mandate to do a check 3. Nevertheless,. S assumed that. PS would have wanted the plane to undergo its check 3 with them arid went ahead and did it without his authority. In fact, PS did not ~Vant S to r:.O the work as a friend of his would do· it for Sl oao obtaining spares at cost and without Charging for labour. HELD, PS had not accepted S's offer and was not. liable on their bill for $3 292,67. However, he ·ha.d been enriched to an a!lDunt of· $1 773,26 and should pay this.

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(v) not be vague

If an agreement is so incomplete or uncertain that its meaning cannot be determined by a court on the evidence before it, ·the contract is void for vagueness (Levenstein v Levenstein in 5 .l and 5. 2 below) •

(vi) be made with both parties of. the same mind as to the subject matter

If the acceptance is not in fact an acceptance of the offer made because the minds of the offeror and offeree do not meet as to the material terms of their agreement,

-the contract is void for mistake (section 8 below) .

.(vii) be posr;ible of performance

Where a person sells another a portion of a lot in a township, both parties thinking the lot capable of sub­division when in fact it is not, performance of the contract by the seller is impossible and there is no contract (Wilson v Smith in 6 .1 below) •

,d. in ·the manner prescribed by the offeror

The manner in which aceeptanee is to be made be expressly presaribed by the offeror. If the acceptance not made in the manner prescribed, there is no contract.

Laws v Rutherfu:rod 1924 AD 261 (on appeal from SR) . Details of 'this case are given in 2.2.3 b. above. The option also stipulated that L's acceptance or refusal should be notified by registered letter to Mrs Rat the Post Office, Umtali. L's appeal failed on this ground too. Innes CJ said that,· 1vhen the acceptance .of an offer is conditioned to be made within a time or in a mann~r prescribed by the offeror, then the prescribed time limit and manner.should be adhered to.

Eliason v Henshaw (1819) 4 Wheaton 225. This American case is often quoted by English and South African authorities. An offer by E to buy flour from H was brought to H by wagon. In terms of the offer, H was. required to send his .acceptance to E by means of the wagon. H, thinking he could reach E more quickly by post, accepted by letter which arrived after the wagon. HELD, the acceptance was invalid and there ••as no contract.

The offeror may prescribe a manner of acceptance which amounts to a waiver of his right to notification of aeceptanee. Acceptance of an offer made by advertisement was held to have taken place on 'the perfprmance of an act without need for noti fica.tion to the advertiser (CarlilZ ~Carbolic Smoke Ball Co in 2.2.1 above).

The offeror cannot impose a term in his offer that he will treat silence as an a~ceptanoe.

Fel thouse .v Bindley (1862) 11 CB (NS) 869. In the course of

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bargaining about the purchase of a horse, F wrote to its owner, his nephew, saying "lf I hear no more about him, I consider the horse to be mine at £.-yJ 15s". The nephew did not reply. Some weeks later the nephew instructed B, an auctioneer, to sell his farming stock. B did so, including the horse, and was sued by F for

-damages on the grounds that the horse was his. HELD, there was no contract to pass the property in the horse to F.

The manner of acceptance may be impliedly prescribed by the offeror. This 'is the position where an order for certain goods at a certain price is sent to a person at a distance and nothing is said as to the manner of acceptance. The offer is accepted at the time of the dispatch of the goods on the grounds that the offeror impliedly waives his-right to notification of acceptance and impliedly pre-scribes the manner of acceptance. '

R v NeZ 1921 AD 339. N was the holder of a bottle-store licence at Dieve Draai in the Transvaal, but had no licence to sell liquor in the Cape. Armstrong sigiled an order for liquor \Vhich he handed to N's servant, Basson, at Home Rule in the Cape. B took the order to N at Dieve Draai. . N accepted the order, appropriated two t bottles of liquor to A attaching a label with A's name on it to 1

one of the bottles and had B deliver the bottles to A at Home Rule. ' N was convicted of selling liquor in the Cape without a licence. His appeal was allowed on the ground that the contract was concluded at Dieve Draai when he dispatched the liquor.

A similar position arises UJhere the offemr authorises O:t' indicates ~ the post (which he may do. impliedly as when he himself uses the post to send the offer). A contract cones into being \Vhen the letter of acceptance is posted.

Kerguelen Sea Zing and Whaling Co· Ltd v Corrmissioner of Inland Revenue 1939 AD 487. In a tax case the point of decision was whether certain income was Cl.erived from a source within the Union by virtue of a contract made within the Union. The contract related to the sale by K of whale oil to Unilever Ltd. The negotiations took place in London between representatives of Unilever Ltd and of K. Contracts were C.raWil' up and signed in London by the representatives. The original contracts after execution were retained by Unilever J,.td. Two copies signed by Unilever Ltd's representatives were brought to Cape Town, where they were signed by two directors of K. These contracts were then returned to London. HELD, a contract concluded by the interchange of letters of offer and acceptance through the post was made \Vhere the letter of acceptance was posted. The following case was approved and Kotze JP'cS formulation of' the rule adopted.

(1) Cape ExpZosives Works Ltd v South Afriaan OiZ and Fat I~ustries Ltd (2) Cape Explosives Works Ltd v Lever Brothers (South Africa) Ltd 1921 CPD _244.

Each of 'the defendants wrote and sent by post to CiiW Ltd at Somerset West, Cape, a letter containing an offer to sell glycerine,

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COMMERCIAL LAW OF ZIMBABWE - CONTRACT 23

SAO & FI Ltd from ~lmore in the Transvaal and LB (SA) Ltd from Durban. Letters of acceptance were posted in Somerset West. In actions on contracts, the defendants objected to the court's jurisdiction on the ground that the contracts were not entered into in the Cape but in the Transvaal and·Natal respectively, where the letters of acceptance were received by the defendants. HELD, the contract was made when and where the offeree posted the letter of acceptance. Kotze JP laid down the ru1e as follows: where in the ordinary course .the post office is used as the channel of communication, and a written offer is made, the offer' becomes a contract. on the posting of the letter of acceptance.

This rule also applies to offer and aaaeptance by telegram but not by telephone and telex. In the case of instantaneous com­munications, as distinct from mailed communications, the contract is only complete when the acceptance is received by the offeror.

Yates v Dalton 1938 EDL 177. Y telegraphed an offer to hire D's cafe to D's agent, Schoeman, who at 9.40 the next morning tele­graphed an unqualified acceptance. An hour and a half later, S received a telegram from Y cancelling the offer. HELD, the position taken up py the parties in collllOOn, that the effect of S's wire dispatched at twenty minutes to ten was to create a binding contract between the parties, is in accordance with the decision o~ the Gape Provincial Division, Cape Explosives Works Ltd v South Afriaan Oil and Fat Industries Ltd.

Tel Peda Investigation Bureau (Pty) Ltd v Van Zyl 1965 (4) SA 475 (E). VZ who resided and carried on business in East London, sued in the Mlgistrate 's Court, East London, for payment by TPIB (Pty) Ltd of Johannesburg of amounts due to him for investigations he had carried out. The company challenged VZ's contention that the whole cause of action was within the jurisdiction of the East London Court. The company had made its offer over the telephone

· from Johannesburg to VZ at East London, where VZ had accepted it. HELD, where the telephone is used to make an offer, the offeror is not authorizing a method of acceptance which will be binding on him whether or not he is made aware of the acceptance. In the present case the acceptance was conveyed to the company in Johannes­burg· and the contract was therefore concluded there.

Where the rule applies, once the letter of aaaeptanae is posted the aontraat is aona ludBd, even though the letter does not reaah the offeror.

Household Fire and Carriage AaaidBnt Insuranae Co v Grant (1879) 41 LT 298 •. G applied by letter for 100-shares in the insurance company, paying a deposit o£ ls per share and agreeing to pay a further 19s per share within twelve months of the date of allot­merit: The shares were du1y allotted, but the letter of allotment went astray in the post and never reached G. The company went into liquidation and the liquidator sued for the unpaid balance on

·the shares. HELD, as soon as the letter of acceptance is· delivered to the Post Office, the contract is made as complete and final and

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absolutely binding as if the offeree had put his letter into the hands of a messenger, sent by the offeror himself as his agent, to deliver the offer and receive the acceptance. How then can a casualty in the post unbind the parties or lml'llake the contract?

The question of revocation needs to be considered in ,the case mailed communications. It is c~ear that revocation of the must be communicated to the offeree before the letter of acceptance is posted (2.2.3 a. above). It is not at all clear whether the offeree can revoke his letter of acceptance once it has been posted, e.g. by a speedier means of comnunication.

A to Z Bazaars ·(Pty) Ltd v Minister of Agriculture 1975 (3) SA 468 (AD). Having decided to expropriate the company's property for · public purposes the Hinister sent by post an offer cif R38 000 as compensation. The company posted a letter to the lvtinister accept­ing the offer. A few days later the company repented of' its decision and dispatched a telegram withdrawing its acceptance. The telegram was received before the letter. The judge of first instance said he could, on the authority of the decisions in the Cape Explosives Works and Kergeulen Sea7;ing & Whaling Co Ltd cases, come to no other conclusion than that the contract w~ com­pleted on the posting of the letter of acceptance. The Appellate Division reversed his decision by resolving the issue upon an interpretation of the relevant statute and found it unnecessary to decide whether the rule, that a cont~act is concluded by post upon the mere posting of a letter of acceptance, necessarily entails ~he corollary that revocation by a speedier communication is not possible. But Jansen JA did cast come doubt on the corollary when he said it was difficult to shut one's eyes to the many criticisms raised against the principle.in the Cape Explosives Works case, nor was it at all clear that the principle, mainly conceived for the protection of the should necessarily preclude the possibility of neutralization of a posted acceptance before its receipt by the offeror ..

2.4 Special. Terms

Where an offer is made subject to special terms the offeree wil.Z not be bound by_ them unless he has exppessl.y or impliedly accepted them. This is illustrated by the. following cases:

a. Signed docwnents

In general the effect of signing a contract is that the party signing is bound. This rule is applied not only when the person signing studies the doct.nrent but also when he signs carelessly or recklessly and when he fails to avail himself of an opportunity to study provisions incorporated by-reference.

George v Fairmead (Pty) Ltd 1958 (2) SA 465 (AD). G, a hotel guest, signed an hotel register which contained contractual terms some of which he completed by filling .in blank spaces but the rest· of ":hich he did not read. One clause exempted the proprietor

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COMMERCIAL IAW OF ZIMBABWE CONTRA.CT 25

from liability for loss caused by theft. Certain clothing belonging to G was stolen and he sued the hotel company. HELD, G was bound by the terms because he knew he was signing a con­tractual dOcument.

Bhikhagee v Southern Aviation (Pty) Ltd.l949 (4) SA 105 (E). B, an exper;i.enced businessman, lvho was accompanied by a friend who could ~ad the document but was not asked to, signed a flight ticket, all of it in a language (English) he could not understand. Bad weather preve~ted the completion of· the journey in time, and B had to inake alternative arrange~rents. The company sued him for the fare. HELD, B was bound by the conditions.

Burger v CSAR 1903 TS 571. B through his agent delivered a box of law books to Johannesburg station for carriage to Grahamstown. The agent and a Railways official signed a consignment note 1vhich stated on the face of it that it was issued subject to the traffic regulations in force. These regulations limited liability in the case of loss· or damage. B read the note before the good.'l left Johannesburg but did not make himSelf acquainted with the regula-tions.. The goods were lost in transit and B sued for their value. HELD, B was bound by the. regulations.

But the party signing wi.H not bound if he has been misled as to ~e ~reaning of the 1vords to which he was signifying his assent.

· Curtis v Chemical Cleaning and Dyeing Company Ltd 1951 (1) All ER 631 (CA). C, when delivering a dress to a company for cleaning, was asked to sign a docUirent which contained a clause that the dress was accepted on condition that the company was not liable £or .any damage hows9ever arising. C asked why she had to sign it and was told the company would not accept liability for damage done to beads and sequins on the dress. She si.gned without reading the whole document. HELD, the company's assistant had made the misrepresentatio~ innocently, but nevertheless .as Chad relied on it, she was not bound by the wider indemnity contained in the docUirent.

Shepherd v FaneZl's Estate Agency 1921 TPD 62. S, who wished to sell his qusiness had gone to the estate agency, being induced by a newspaper advertise~rent of the agency: "Our liDtto: no saie, no charge". He was giv~n a dOcument to sign which was in direct conflict with the advertise~rent, namely that the agency would have the sole selling right and would receive co~ssion if

·the business was sold within three liDnths, whether through the agency or .not. S 's attention had not been drawn to the fact that the terms of the advertisement were being departed from. HELD, S was not bound by the condition.

M:ms v Union Meat Co 1919 AD 268. M signed a memorandum which contained a guarantee, without reading or understanding it, on the representation of the company's representative that he was merely aclrnowledging receipt of a cheque. HELD, M was not bound by the memorandum. ·

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The defence to an action based on a written contract that a person signing did not appreciate the contractual nature of the doctunent when he signed it is Jmown as the defence of non est factum (it is not his deed) in English law or justus eno:ri (reasonable mistake) in Roman-Dutch law, and it may also avail against a third party who claims to have acquired rights flowing from the contract pro­vided the person signing has not been careless or negligent (Musgro & Watson v Rotta in 8.2_below).

b. Tickets, receipts and progrummes

lfuere agreement has taken place in the nonnal manner and the - offeree has been given a ticket or recej,pt by the offeror which

contains written matter purporting to contain terms of the agree~ ment, the offeree wiU be bound by those terms_ if he was aware or ought to have been aware at the time of aaceptanae that the offer wa~ subjeat to them. ·

Dyer v MeLrose Steam Laundry 1912 TPD 164. D was in the habit of sending articles to a laundry. On each occasion, when the laundry returned the articles they attached a printed list of the prices charged for each item, and the number of articles returned. The -list had a notice at the foot stating that articles were washed subject to conditions printed on the back.- On the back one condition limited liability for articles lost. The list was used by D to check the articles returned with the number sent and she_ never read the notice or conditions. On one occasion, not the first time of dealing with the laundry, articles were lost. HELD, ·· in the absooce of proof by the laundry that D Jmew of the condi­tions, they had not .done what was reasonably sufficient to bring the conditions to her notice and she was not botmd by them.

M::lst hitmdties and cleaners require the. customer to sign a doctunent limiting their liability on handing in the article. But even in this situation the customer is not botmd if misled as to the reason for her signing (Curtis v ChemiaaZ CLeaning and Dyeing Company Ltd in 2.4 a. above).

The. prinaipZe foUoikd in Dyer v Melrose Steam Latmdry had been set down in the foUCMing aases:

CSAR v James 1908 'IS 221. J purchased a return ticket having on it the words "Issued subject to the rules and regulations contained in the tariff books". One of the regulations provided tl}at forwar journeys must be commenced .on the date of issue. The tariff book could have been seen by J on application to the ticket clerk. J read the words on the ticket, but did not read the regulationS. The return half contained the words ''Available as advertised on poster bills". J, after reading the' ticket, asked the clerk for how long it was available and was told two months. HELD, J was bound by the regulations and was not entitled to use the forward half of the ticket after the date of issue. ''Here the defendant accepted the ticket", said Solomon J, ''knowing that there were con­ditions attached to it, and in that way he assented to be botmd by

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COMMERCIAL IAW OF ZIMBABWE - CONTRACT 27

the rules and regulations which were referred to at the back of the ticket." The clerk's statenent referred to the return half and did not constitute a representation that the forward half was available fOr two months.

CSAR V McLaren· 1903 TS 727. M left a hold~all at the Pretoria station cloakroom and received a ticket on which the words ''The department is not responsible fOr any article exceeding the value of £.5" were printed in red ink diagonally across the ·ticket and partly covered by the clerk's entry of the description of the package. M knew there was printing on the ticket but did not know this printing contained any terms limiting liability.. His attention was not directed to the printing, nor was there any notice calling attention to i't. The package was lost and M sued for its val.ue. · HELD, applying the n.Ues laid down by Lord Herschel in Richardson and Spence & Co v Rowntree [1894] AC 217, Innes CJ said: " ..• there is no doubt 1;hat [M] knew there was some printing on the ticket, but he did not know· that that printing referred to any conditions and he could.be hardly expected to know that, when he saw the clerk writing in the middle of the ticket the description of t'he package . . . . He would natumlly think that where the clerk wrote on the ticket there was a. blank space . . . Then, did the Railways do what was reasonably sufficient to give M notice of the conditions? In my opinion they did not." ·

The approach of the courts in ticket cases therefore is to ask: Did the .person who received the ticket know that there was printing or writing on it? If so, did he know that the printing or writing contained provisions of, or references to pro\risions of, the con­tract in question? If these questions are answered in the affir­mative the provisions are part of the contract. If the questions, or even only the second of them, is. answered in. the negative a third question is asked: Did the person giving the ticket do what was reasonably sufficient to give the other notice of the conditions?. If yes, the provisions are part of the contract; if no, they are not part of it.

'In determining what is 'reasonably sufficient', Innes CJ in CSAR v MaLaren draws a distinction between documents which a man might reasonably suppose to contain conditions and documents which a man cannot be reasonably held to suppose contained c~nditions.

Fro~ks Ltd.v Dent and GOodWin (Pty) Ltd 1950 (2) SA 717 (C). D, a~ting as shippers for F, .had by verbal agreenent stored three bales of material in their warehouse which were stolen. D argued that a monthly warehouse invoice rendered F contained con­ditions limiting their liability. F's managing director said he had not been aware of these conditions nor had his attention been drawn to them. HELD, the docurrents containing these conditions were not ones' in which a reasonable person would expect to find conditions limiting liability of a bailee, nor had D taken the steps necessary to bring them to F's notice.

Chapelton v Barry UDC [1940] 1 All ER 356. C hired a deck-chair

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from the cotmcil and paid 2d in return for which he was given a receipt. ' When sitting down on the chair the canvas gave way and as a result C was injured. The receipt contained printed words excluding the liability of the cotmcil in such cases. HELD, C was not botmd by the printed words. He '"as justified in assuming his ticket was no rore than a receipt.

Where the pl'inting appears on a prograJTIJ71e which can only be obtained by. payment, the offeree will not be bound unless reasonably sufficient notice has been given to him. ·

Roseveare v Auckland Park Sporting Club 1907 TI-l 230. R paid to . enter a racecoUTSe. His identity was mistaken, he was ordered to leave, escorted to the turnstiles and ejected. The owners of the course contended that a clause printed inconspicuously at the end of the programme entitled the stewards to eject any person whose presence they did not desire. The progranure could be obtained only on payment and this was the only notice to the pub+ic of the conditions. HELD, the notice was not sufficient to bind a person who had not read the term.

c. Notices inoor,porated into contracts

Similar pl'inoiples apply when relianoe is placed on a provision of the contract which is posted up in a prominent position, such as the fl?tice "Cars garaged at owners' risk".

Kemsley v Car Spray Centre (Pty) Ltd 1976 (l)·SA 121 (SEC). K contracted with the company, a car repairer, to have repairs done to his car. In the workshop there were two large notices which read "Vehicles and goods stored and driven at owner's risk". ~ was aware of the fact that his car was in the company's possession at "owner's risk". While in the compaJ1y' s possession the car was involved in anoth~r accident when being driven by the company's servants and the manager tmdertook to repair the damage. While in the company's possession fOr this purpose, the car was stolen and later recovered in a damaged condition. HELD, when the company tmdertook to repair the damage caused in the accident wh-ile the car was being driven by its servants, a new contract had been entered into. The burden was on the person who wished to impose the owner's risk clause to draw it properly to the attention of the other party and in the peculiar circumstances of this case it was for the company, in offering to repair the car, to draw K 's attention to the fact that they would only do so subject to the car remaining at owner's risk. This they had not done.

Eeea v /Jiva:ris 1947 (1) SA 753 (AD). D, who conducted a garage and service station, had verbally contracted with E to store a lorry at ·the risk of E for all causes, such as fire and theft, comprised in the term owner's risk. There was a notice "All cars driven and garaged at owner's risk" on the wall which D had shown E. He did not object to it and seemed to know all about it. The lorry .v ... s dama.ged in a fire. HELD, the effect of tlie owner's risk clause, in the present contract, was to freeD from liability. In

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regard to the question whether E understood the notice, it was not necessary £or D to prove that at the time of the contract E understood correctly all the consequences in law that would flow from an agreement that the lorry wa;; to be stored at owner's risk.

2.5 Implied terms

Usually offer and acceptance are made in express terms whether written or verbal. But the agreerrent so made may be subject to implied or unexpressed terms. Such terms may be implied by U:aJ or implied on the facts.

Alfrl!ld McAlpine & Son (Pty) Ltd v Transvaal Provincial Adminis­tration 1974 (3) SA 506. (AD). This case is being quoted not for the· facts, but for Corbett JA 's discussion of the expression "implied terms". The judge says the expression denotes two distinct concepts. Pirst, it is used to describe an unexpressed provision of the contract which the law imports therein, generally as a matter of course, without reference to the actual intention of the parties. The intention of the parties is not totally ignored. Such a term is not normally implied if it is in conflict with the express provisions of the contract. But it does not originate in the contractual consensus; it is imposed by the law from without, often where it is by no means clear that the parties would have agreed to incorporate it in this contract. Secondly, "implil')d term" is used to denote an unexpressed provision of the contract which derives from the comm:m intention of the parties, as inferred by the court from the express terms of the contract and the surrounding circumstances. CoimiDn intention comprehends not only the actual intention but also an imputed intention. In other words, the court implies nbt only terms which the parties must actually have had in rnirid but did not trouble to express but also terms which the parties, whether or not they actually had them in mind, would have expressed if the question, or the situa­tion requiring the .term, had been drawn to their attention.

Examples of both kinds of implied terms, and th'e principles followed in implying or not implying them, are given belo1v

a. Term? implied by lauJ

Corbett JA says ready examples of such terms are to he found in the law of sale, e.g. the seller's implied guarantee or 1varranty against defects; in the law of lease the similar implied under­takings by the lessor as to quiet enjoyment and absence of defects; and in tne law of negotiable instruments the engagements of drawer, acceptor and indorser as imported by the Bills of Exchange Act (our ss 53 and 54). Such implied terms, the judge states, may derive from the cornrron law, trade usage or custom, or from statute.

Some such implied terms cannot be varied by. the parties, e.g. the terms implied by the Hire-purchase Act that the buyer shall have and enjoy quiet possession, the seller is not and lvill not be

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precluded from passing ownership; and the goods shall be free from any charge or encumbrance jn favour of any third party (s 11(1)), but most may be, e.g. the comm::m law rule as to the passing of the risk of the thing sold.

Mmy of these tenns are examined elsewhere in this and other hand­books and no more need be said now except for a few words on trade usage.

Tr>ade Usage

When .persons enter into an agreement tmder circumstances which are governed by a particular usage, then that usage must be considered part of the agreement whether the parties knew of the usage or not, tmless they have expressly agreed to exclude it. The requirenents of a trade usage are that it must be notorious, certain, reasonable and not contrary to positive law (see qo~tts v Jaaobs below where these requirements were satisfied).

Golden Cape Fruits (P.ty) Ltd v Fotoplate (Pty) Ltd 1973 (2) SA 642 (C). G, which carried on a mail order business for the deli very of gifts overseas, decided to have an advertising brochure printeil. G engaged the services of F, a specialist photoli tho­grapher, who· prepared the· necessary plates ·for· submission to the printer. After the brochures had been printed, an error in the plates was discovered which made the brochures tmsuitable for use. G sued P for R900 wasted printing costs. F argued th.at there existed a trade usage that, once rough proofs of the plates had been submi tte.d to and approved by the customer, the photoligho­grapher's 'obligations ~der·the contract would be fulfilled by deli very of plates in accordance with the rough proofs. The . mistake was of such a.kind that it would not have been obvious even to an expert and the expert checking required for its detection would have taken considerable tine. HELD, F had failed to prove that the trade usage in fact existed and that, even if it did, it applied to photolithographic plates and to error of the kind in question. fualing with the requirements for establishing a trade usage, Corbett J observed that, putting the position at its

·lowest, the evidence had to be clear, convincing and consistent, it had to amount to sonething !OOre than nere opinion and instances of the usage having been acted upon had to be provided to establish the fact of its existence; no rule could be laid down as to the number of witnesses required, for this depended very much upon the nature of the usage in question, the character and quality of the \'ji tnesses and the extent to which their evidence was challenged by other evidence, but in the nature of things, the court would not readily act upon the evidence of a single witness, even if uncontradicted.

Coutts v Jaaobs 1927 EDL 120, J, a farner, sent wool to-C, wool­brokers, asking that they should "do the best for ne". After a small amount had been sold J, dissatisfied with the failure to sell the rest, telegraphed "Hand over my wool immediately to. Fascowool". C refused to do so tmless he was paid certain

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transfer charges which he claimed. J considered these excessive but paid them to ·release his wool and then brought action to recover the am:nmt. HELD, J could not recover because it was proved that the chaFges had been operative' for many years. Wit­nesses from different firms said that the usage had been in operation. for 28,. 25 1and 24 ,years ~spectively and _C· sfid his finn had certamly rehed on the usage smce 1917 ••hen ah agreement to this effect had been entered into at an Interport Conference of wool traders. Customers were informed of the charges by circular.

b. Terms implied on the facts

Elite Electriqal COntractors v The Covered Wagon Restaurant 1973 (1) SA 195 (RAD) . O'IR, a restauranteur, hi red EEC, proprietor

. of a small electrical business, to do the electrical work involved in moving a stove and other electrical appliances from one part of his kitchen· to another. Because of difficulty in making an advance estimate of the cost of work of this kind, no finn quota­tion was given and the parties agreed that EEC would proceed on this bas is ; Having duly completed the work EEC contended there had been an implied agreement that CI'IR would pay a fair and reasonable price for the materials supplied and services rendered. HELD, .the implied tenn relied upon by EEC was valid and enforce-. able. The tenn implied in any particular contract will depend upon the circUmstances surrounding that contract and iit is not a matter to be decided by reference to other cases.

West End Diamonds Ltd v Johannesburg Stock Exchange 1946 AD 910. An official quotation in respect of the conpany' s shares was granted in 1922. The company was voluntarily wound up in 1941 on the ground of insolvency and the Stock·Exchange deleted its name from the official lisL After a lapse of nearly four years the company applied to have its name re-instated. HELD, it is an implied tenn of a contract between the Stock Exchange and the

. applicant for an official quotation that the Stock Exchange is entitled to remove the company's name from its official list of quotationS when it is being wound up on the ground of insolvency. The tenn in question, of course, cannot be implied unless a con­sideration of the tenns of the contract and of the circumstances leads to the· conclusion that an implication necessarily arises that the parties must have intended that the suggested tenn should exist.

~arnabas Plein & Co v Sol Jacobson & Son 1928 AD 25. S & Son gave an estate agent, B, a mandate to find a purchaser for a certain business. The amount of c<~mmission 'was first mentioned some months later when B agreed to a commission at less than the usual tariff rate as the purchaser he had found would not pay the full amount asked. The sale was subsequently concluded at a price higher than expected, though still less than .the full price. HELD, there was no implied tenn that B .woUld recover commission at the full tariff rate but he was entitled to a 'reasonable remuneration. Stratford JA quoted Reigate v Union Manufacturing Co (below) where 'Scrutton 1J said, 'You must only imply a tenn if it is necessazy

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in the business sense to give efficacy to the contract; that is, if it is such a term that you can be confident that if at the time the contract was being negotiated someone had said to the parties "what will happen in such a case?" they would have replied "of course so and so. We did not troub~e. to say that, it is too clear."' Stratford .JA went on to say, ' . t • • The true view appears to.me to be that you have to get at the intention of tne parties in regard to ·a matter which tbey must have had in mind, but which they have not expressed. And for this purpose all circumstances surrounding and relating to the contract must be regarded.'·

Reigate v Union Ma~facturing Company (Ramsbottom) Ltd [l918] 1 KB 592. A company agreed to appoint R sole agent in the U.K. and elsewhere for seven years in consideration of his subscribing £1 000 in shares of the company and introducing to the company certain new classes of goods to be manufactured by them. The , company became insolvent, .passed resolutions for voluntary winding up and ceased to do business through· R. HELD, the agreement was to employ R as agent for seven years, and a term could not be implied to the effect that the company could terminate the agency at any time by ceasing to carry on business.

Phillips v Bulawayo M2rket and Offices Co (1899) 16 SC 432 (on appeal from SR). · P agreed in writjng to erect a proscenium and · drop-curtain to fit a stage in B's market hall, in consideration of P having the use of the drop-curtain for advertising purposes for two years. HELD, it was an implied condition of the .contract , that B would, with due regard to their interests as owners of the property, give reasonable facilities for the holding of appropriate public entertainments in the hall during the two years . De Villiers GT adopted the view of the Court of Appeal in Hamlyn & Co v Wood & Co (below). that "such an implication of a term in a contract ought to be made only where it is necessary .in order to give the transaction. such efficacy as both parties must have intended it to have, and to prevent such failure of consideration· as cannot have been 1vi thin the comtemplation of either party."

Hamlyn & Co v Wood & co [1891] 2 QB 488. W, who ;vere brewers, agreed in writing to suoply H all the grains made by W for ten years. After five years W sold their business. HELD, a term could not be implied that W would not by any voluntary act of their own prevent themselves from continuing the sale of· grains to H for ten years. The court ought not to imply a term unless there arises fiom the language of the contract itself, and the

' circumstances under ;vhich it is entered into, such an .inference that the parties must have ·intended the stipulation J.n question that the court is necessarily driven to the conclusion that it must be implied. · ·

See also Greenfield Engineering Works (Pt;y) Ltd v NKR Construction (Pty) Ltd 1978 (4) SA 901 (N) in 2.5 in Part 4.

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2.6 Agreements by conduct

Conduct aan take the ptaee of written and spoken words in the ease of both offer and acceptance or in the ease of the one or the other. In deciding whether there is an intention to contract the test is objective not subjective. This intention is determined from the manner in which the person concerned conducts himself.

The rule in Freeman v Cooke (1'848) 2 Ex 654, as stated in Smith v Hughes (1871) LR 6 QB 597 in the following ••ords, was approved in Cotten v Rietfontein 'Engineering Works and Levy v Banket Hotdings (Pvt) Ltd (below). "If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he \vas assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the rnn thus conducting himself would be equally bmm.d as if he had intended to agree to the other party 's terms."

Levy v Banket Hotdings (Pvt) Ltd 1956 R & N 98. B was successor in title to a partnership to which L had sold a business in Banket and leased the plot on which the business was situate for five years. B alleged a verpal agreement between L and.the partnership to grant an option to renew the lease fOr a further five years. L denied this despite the fact that he accepted £600 proffered in terms of a letter ;..hich unequivocally stated that the money was consideration for the option to renew. HELD, L's conduct gave rise to an inference that he had agreed. to grant an option to renew the lease. Cotlen v Rietfontein Engineering Works (below) applied.

Col.Zen v Rietfontein Engineering Works 1948 (1) SA 413 (AD). After. some correspondence regarding the supply of a pump and a Fairbanks Mlrse engine, C wrote .to R: "Enclosed please find my cheque in part payment of pumping plant." R paid the cheque for £150 into its banking account but did not reply to the letter. Later R supplied a different type of pump which proved unsatis­factory and C repudiated the contract. HELD, treating C's letter as an offer, R did by its conduct-accept the offer. It did not reply in writing that it accepted, but it paid C's cheque into its banking account. Its conduct in so doing and its retention of the proceeds of the cheque, coupled with the fact that it failed to notify C that it did not accept his offer, was a sufficient indication to C that it had atcepted.his proposals.

The rule in Freeman v Cooke is also illustrated by Benoni Produce and Coal. Co v Gundel.finger (in 2;3 c.(iv) above) and the cases below.

EZZisons El.eetneat Engineers Ltd v Barel.ay 1970 (1) SA 158 (RAD) . E, a cpmpany engaged in the manufacture of refrigeratbrs, sued B for the cost of repairing his deepfreeze refrigerator manufactured by E. E based its claim on a verbal agreement between B and one of E's directors that B would, pay if the damage had been caused by a fault in B 's lighting plant, othe:rWise E would pay. B denied that this verbal agreement had ever taken·place but admitted that

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it '"as the tacit- agreement. HELD, ·,vhere a customer takes a machine which requires repairs to a finn skilled in such repairs in order that the finn may repair it, and nothing is said about price or about what repairs might or might not be necessary, then a tacit contract comes into.being between the customer and the finn under which the custol!l!?r agrees to pay such charges· for the repairs as are reasonably necessary. If the finn is also' the manuf*cturer .and there is a guarantee in terms of which the manu­facturer agrees to make good any repair.occasioned by any defects in the machine itself, then the tacit contract is that if any repairs are occasioned because of the fault of the customer, the customer will pay ·for them but if because of some fault in the machine itself, then the finn will pay for them.

I Pieters & Co v Salomon 1911 AD 121 (on appeal from SR). P, having undertaken to pay Berger's creditors, including S, the amounts of their. respective "accounts" against B, requested them to send in their statenents of account. S sent in a statenent showing the sum of £490 to be owing to him, and P without raising any objection to this amount, confirmed, the undertaking previously given. HELD, although P had previously to the undertaking been led by an examination of B's books to believe that £345 was owing by B to S, and may really have intended to ·pay that sum only, P must be held to have undertaken to pay s the amount which by its course of dealing with him it had led him reasonably to believe would be paid. When a man makes an offer in plain and unambiguow language, which is understood in its o"rdinary serise by the person to whom it is ~!~dressed, ·and accpeted by him bona fide in that sense, then there is a concluded contract. Arrt unexpressed reservations hidden in the "mind of the promisor are in such cir­cumstances irrelevant. He cannot be heard to· say that he rreant his promise to be subject to a condition which he omitted to rrention, and of which the other party was maware.

The rule will not be applied where there was a mutual-mistake,. the parties honestly attaching different rreanings to words in a

· contract which are not self-explanatory.

Diamond v· Kerniok 194 7 ( 3) SA 69 (AD) Con appeal from SR) . · K sued D for agent's commission in respect of the sale of certain lots in a township, alleging that he was entitled to "7-t-~ straight .commission" on the purchase price of the lots. D con­tende.d that the commission was payable only on payrrents actually received by the seller. HELD, in the absence of evidence that the expression "straight commission" had a well-known rreaning am::mg persons in the kind of business concerend, there appears to have been a mutual· mistake, that is, each party was mistaken as to the other's intention, though neither realised that his promise was misunderstood by the other. This is not a case where the court can apply. in favour of K the well-known principle' in Smith v Hughes.

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SECTION 3. CONTRACTUAL CAPACITY

3.1 Thf! agreement must be made within the limits of. the parties' aon­traatrua l aapaai ty

While the general rule is ·that every· person is able to contract · freely within the limits of the la'"• the folloWing are persons of

limited contractual capacity whose power to enter into binding agreements is subject to S!Jecial rules -

(1) Minors

(2) Mitried women subject to the mu;itaLpower of their husbands

(3) ~nta:lly ill persons

(4) Drunk persons

(S) Prodigals

(6) . Insolvent persons·

(7) Alien enemies

(8) Artificial persons

(9) Illegal associations

The restrictions of the contractual capacity of each of these are dealt with below •. In addition they may be subject to certain disqualifications under various statutes, just as persons who have been convicted of crime are. Discussion of these disqualifica­tions is considered unnecessary in this book.

3.2 Minors

A minor is an unmarried person under> the age of 21. He is under the custody and lawful authority of a guardian whose ·duty it is to maintain the minor until he can maintain himself, administer his property and assist him in contracting. The guardian is normally a.natural guardian, Le. the father or the 100ther where the father is dead, a court has awarded the sole guardianship to her, or the child is illegitimate, but may be appointed by a deceased natural guardian's will or by the High Court (the upper guardian of a child).

Contracts made by a minor are considered under two heads : those made without the guardilpl's assistance and those made with the guardian's assistance·or made on the minor's behalf by the guardian.

'3.2.1 . Unassisted aontraats

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As a general rule, a aont:ro.at made by a'mino!' UJithout the gua!'dian 's ass is tanae is void as fa!' as the minoi' is aonae!'lwd and valid as fa!' as the othe!' pa!'ty is conael'lled. ·

The authority for this proposition ts tt.e Dutch jurist, Voet, quoted in Edelstein v Edelstein NO below:

"From the principles of the law it is clear that a minor who contracts without the assistance of his guardian can render others under an obligation to himself, but does not himself become obliged to them ... [as] en the minor's side a contract entered into without ~~e assistance of his guardian is ipso jUPe (by the law itself) null and void."

The effect of what the old authorities C:escribed as a "limping" contract has been summarised as follows (Boardroom 1976) . A minor who contracts without his guardiar. enjoys the best of both worlds. He binds the other party to him but does not bind him­self to the other party. The option of t!'eating the aont!'aat as void O!' valid Pests with the mino!' (o!', mo!'e pPeaisely, his

· guai'dian UJho aats fo!' him}.. If the mir:.o!' eleats to t!'eat the aontraat as valid, he aan aompel the otl:e!' party to perfom,; he will then also have to fulfil his own part of the contract. If the minor pPefers to treat the aont:ro.at as void, the other party aannot aompel him to perform his part of the bargain; a minor who has already performed can recover from the other party what­ever he has paid or delivered, but he may not keep what he has received tmder the contract because this would unjustly enrich him at .the other party's expense. He must restore it, though not necessarily in full (see Enrichment below).

Edelstein v Edelstein NO 1952 (3) SA 1 (AD). A female minor whose parents were divorced (the mother was awarded custody but the father remained the natural guardian) entered into an ante~ nuptial contract with E. Later in 1918, she and E were married with the implied consent of her father, who was informed of the proposed marriage and did not object. In 194 7 E died leaving over£100 000 and the wife, considering the marriage to have been out or community of property because of the antenuptial contract, accepted certain benefits under E 's · will . In 1949, when she consulted her legal advisers with a view to drawing up her own will, the validity of the antenuptial contract was questioned and she sought an order declaring the marriage in community of pro- ; perty. Of the parties cited as respondents, only the Commissioner for Inland Revenue opposed the order to avoid losing £33 000 death duties. HELD, by TPD, the wife was bound by ·the antenuptial contract on the ground that, while it had excluded community of property and profit and loss, 'it had cor.ferred benefits on her through promises in it of marriage settlements by E. HELD, by . AD, a minor is not bound by an unassisted contract even one to his benefit. The minor may elect to hold the other party ·bound, in which event the minor will also have to perform his obligations. But should the minor choose to escape the contract, he is bound only to the extent of his enrichment. FurtheTilJ)re, unlike an

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COMMERCIAL LAW OF ZIMBABWE - CONTRACT 37

ordinary contract, an ~tenuptial contract cannot be ratified by a minor on attaining maJority as this would amount to an imper-

. missible alteration of the matrironial proprietary regime. The wife was granted the order that the marriag~ was in community of property.

A minor may acquire without his guardian's assistance a perfectZy vaZid-obZigation,which is sometimes.not contractual even though it arises in the course of attempting to contract, in the following circumstances

a. Enrichment

Where a minor is unjustZy_enriched in terms of an unassisted contract, the contract remains void and he is not bound by it but he is under an obZigation to make restitution to· the other party to the extent to which he has been enriched; he .is not obliged to restore whatever he has received pursuant-to the contract, but only so nruch as still remains in his possession at the time of the action or the surrogates of such residue (EdeZstein v EdeZstein NO above). In other words, where necessaries are supplied to a minor, he incurs an obligation to pay their value; property pur.chased with money, or the proceeds of property, originally received must be yielded up; roney spenf on neces­saries which would otherwise have had to b~ paid for out of the minor's estate has to be accotmted for. He is not liable for depreciati_on or destruction of property, or_ for roney squandered or lost. ·

Tanne v Foggitt 1938 TPD 43. F a minor, without his guardian's consent, entered into an agreement with T, the principal of a business college, to attend typing classes for two weeks in March and the whole of April. He paid for the March lessons but then stopped attending and refused to pay the April account. HELD, F benefited from the contract only to the extent of the lessons actually received and·, those lessons having been paid for, there was no further obligation on him.

For more details of the doctrine see the chapter on Enrichment in WiUe's PrinaipZes of South African Li:Iw (1977).

b.- FmuduZent misrepresentation

Where a minor f:muduZentZy misrepresents his age or pretends he has been emancipated and so decei~s another person, who is induced to contract with the minor believing him to be of age or emancipated.the minor incurs an obZigation. This obligation is not aont:mctuaZ for the contract is void and the minor is not bound by it, but de UctuaZ because fraud is· a delict and the minor is bound to make good to the other. party any loss he has suffered as a result of the fraud. .M:lreover, the minor is preaZuded from obtaining the remedY of restitution by which he would otherwise be entitled to reclaim whatever he has paid or delivered in pursuance of the agreement.

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LoUhJ v MJ & H Trust (PtyJ Ltd 1975 (4) SA 268 (T). L, a minor aged 20 years had bought a mtor cycle from M, paying R338 on accm.mt of the price. Subsequently repenting of the transaction, L had repudiated it on the ground of his minority and returned the .mtor cycle. He then sued for iepa:~JT~ent of the R338. . M argued that he was an orphan and self-stnporting, from which it had legitimately inferred that L was tacitly emancipated and possessed of contractual capacity. M also counterclaimed for RZ98 to cover missing parts, which he sa,id had been stolen because of L's negligence, and for two o·Jtstanding instalments. HELD by magistrate, L had made the false representation alleged and was therefore bound by his purchase, could not recover the R338 and had to pay the outstanding instalments and RZ98 for parts stolen through his lack of care. HELD by TPD, the magis­trate had' erred in giving j udwrent for t1e outstanding instalments because "the true view is that a minor's contract is void even if he misrepresented his contractual capacity, either by holding himself out as being of age or by preten:ling that he had become emancipated". His rejeCtion of L 1 s claim for repayment of the R338 had been correct but for the wrong ·reason; it was not because the contract was binding on L that he could not recover his payrttent but because the remedy of restitution was denied him by reason of his fraud. Finally, L had riot been proved negligent and was not liable to pay the R298 for missing parts.

c. Taai t ernnaipation

Where a minar is taaitZy · emanaipated he :!an inaur a binding aon­t:t>aatual obligation within the field of ~is emanaipation. Tacit emancipation occurs when he is allowed by his guardian to carry.on business, or any other occupation, on his own behalf. While some authorities are of the view that emancipation terminates minority, the courts have mre usually limited the capacity of the emancipated minor to the business in which he is engaged. All the authorities are reconcilable if the view is takep that a minor is tacitly eman-cipated to whatever extent his guardian ~as impliedly agreed; in other words, he could contract to the extent emancipated, i.e. to the extent to which the guardian 1 s consent has been given in advarice (Gibson 1977, p 31 footnote) . Whether tacit emancipation has taken place or not, and the extent of it, is decided on the facts of each particular case. ' ·

G:t>and Prix Motors WP (Pty) Ltd v Swart 1976 (3) SA 221 (C). , S, while an 18 year old student nurse in Cape Town, bought a mtor car on hire-purchase. Her_mther. heard of this purchase only five weeks later, and her father neV):!r came to he~r. of it at all because he had Psserted his family and disappeared some five years previousl Far from ratifying this transacttion, S 's mther upbraided her daughter for her folly and refused to sign the forrrs which the hire­purchase company sent her. After three mnths S returned the vehicle to G and sued for the return of R571 which she had by then paid off on it. G argued that S was bm.md by the contract because she had been tacitly emancipated and-counterclaimed for R219 as damages for breach of contract. HELD, it was true S lived in the

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COMMERCIAL LAW OF ZIMBAilWE - CONTRACT 39

nurses's horre and spent her salazy as she pleased; so independent was she that her mther did not even know how rrruch she earned. But the mther's attitude was irrelevant because it was only the minor's guardian who could confer contractual capacity upon her. When S's parents had been divorced and S placed in her mthe.r's custody, her father had remained.her guardian. His abandonment of S could not be construed as an act of emancipation. S had lacked the capacity to purchase the mtor car and was entitled to set the contract aside and recover the mney she had paid. Since G had not established a claim on ·the basis of unjust· enrich­rent (see a. above) the magistrate's judgment ordering G to repay the R571 with interest and costs was confirmed.

Dickens v Daley 1956 (2) SA 11 (N). Daley, a minor aged 20, gave a cheque as rent for Dickens' house, which Jl:lley 's mther

, and :Stepfather had agreed ·to hire. At the time and for the previous twelve years Jl:lley had been living with his mother and stepfather; he was contributing a sum to his mther for board and lodging; he had been in employment as a clerk for four years; he. had had nothing to do with his father, his guardian, who had exercised no rights of control over him and whose only action in relation to him was to sign an affidavit to enable him to obtain a passport. TWo and a half years before he had opened up a banking account without his father's assistance, which he operated unassisted. HELD,.Daley was liable on the dishonoured cheque drawn by him.

Venter v De BurghersdoPp Stores 1915 CPD 252.· V, a minor living with his parents, had had· a few transactions in the sale or exchange of a· horse, had once offered some sheep for sale, had a snall number of sheep which ran with. his father's stock on his

·father's property but whose wool had been kept separately from that of his father's sheep, had on two occasions bought ,a bicycle and made other purchases for his own use, owned a horse, saddle and bridle. ·He assisted his father in dam-making work and 'was paid by his father for doing so but on no fixed 'scale. He was unmarried and had no furnfture and his father clothed him and gave him pocket-money. . HELD, the evidence· was insufficient to establish emancipation and V could not be sued for the price of a bicycle.

Dama v Bera 1~10 TPD 928. B, an Indian girl nearly 21 years old, had been earning her living as a .servant for some four or five years. She lived.with her parents but retained cohtrol of her income and paid a certain sum to them for board and lodging. HELD, B was tacitly emancipated and could .sueD, her enployer, for wages due.

d. Ratification

Where a minor contracts without his_ guardian's consent the contract may be subsequently ratified by the minor on attaining majority, either expressly qr by conduct.

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. Stuttaford & Co v Oberholzer 1921 CPD 855. 0 bought a J!Ptor cycle from S on hire-purchase while still a minor. After attaininl his majority shortly afterwards he continued to use the 100tor cycl( but when sued for the iMtalrrents due he set up his minority at the time as a defence to the action on the contract and tendered the return of the 100tor cycle against ::-epayment of what he had pai< He still continued to use the 100tor cycle and trea't it as his own. HELD, 0 had ratified the contract. ·

e. Statutory Exceptions

A minor is entitled to contract on his own behalf under tl;le following statutes -

Ineu:runce Act (Cap 196) s 37 provides a minor who has attained the age of 18 years may, without his guardian 1 s consent, effect

·a life JX>licy upon his own life and pay the premiums as they fall due, 'but he shall not without his guardian 1 s consent pledge, cede or surrender the JX>licy while he is a minor.

Poat Offiae Savings Bank Aat (Cap 249)· s 9 provides deposits.made by or on behalf of a minor may be repaid to him after he· has _attained the age of 7 years in every respect as if he were of full age,.

Building Societies Act (Cap 189) s 19 provides a minor over the age of 16 years may be a member of or depositor with any building society and may, without'his guardian's consent or assistance, execute all necessary docurrents and generally have all the privi­leges and obligations attaching to members or depositors.

Assisted contracts.

A minor is bound by contracts made on his behalf by his guardian or made by himself~ith his guardian's assistance given at the

·time, beforehand or afterwarde.

Van Dyk v SAR & H 1956 (4) SA ~no (W). VD, now a major, applied to set aside a contract of service entered into with SAR & H \men a minor on the ground that he did not have his father's assistance. VD's father, though not physically present when VD had signed the attestation form, had s · a consent in unconditional terms agreeing to his son jo· g the Railway Police Force. HELD, VDTs father had given his consent in unequivoca~ terms and such consent was good assistance, oofficient to make the contract binding. It was not necessary for ·the father to know all the terms of the contract, e.g. that VD was bound for a minimum period of three years; it was sufficient if he gave his mind specificall) enough to the contract to know the type of contract his ward was entering into and he was assenting to.

Skead v CoZonial Banking & T1'ust Co Ltd 1924 TPD 497. S, ·a minor, with his guardian's consent, signed a promissory note for £Sf in payrrent of the firs~ premium in a: twenty-year endowrrent .

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assurance policy for r:r;o in favour of S, the note to become due eight days after he attained his majority. At the tim S con­templated marriage and the policy was considered the best mans of his saving mney. After the due date S was questioned by CB & T, the holder of the note, and replied that he had no ft.mds to pay it. HELD, S was liable because as the contract had been made with the consent of his guardian acting bona fide and · reasonably, it was prima facie binding on him, and as it was not to his prejudice when made, this prima facie conclusion was not displaced. ·

But the minor is only prima faaie (on the face of it) liable (Skead 's case above) and, if the aontraat is to the minor's prejudiae· he may obtain an order setting it aside, in whiah aase the guardian may be personat.l.y liable.

Wood v Davies 1934 CPD 250. The father and natural guardian of 'W, a minor who had inherited a sum of 100ney, bought on his son's behalf a house then worth £1550ifor .&1750, payable in instalments. Until majority, instalments were paid out of interest on the inheritance. On W attaining majority a considerable sum was still owing and the instalments would absorb a large portion of the interes.t. W, tmtil majority, had'lived in the house with his parents. On attaining majority W sued for cancellation of the sale and return of instalmnts paid with interest. HELD, there was serious and substantial prejudice to W, he was entitled to restitution and the contract should be cancelled. But D, the seller, wa.S to be given credit for a sum of roney representing the value of the use of the house during the period in which W

.lived in it with his parents .

The guardian's aonsent may be e;r;p~ss or taait, or may be implied from the faat that the guardian with fuZZ knowledge of the trans­aation raised no objeation.

Ex. parte Bt.ignaut 1963 (4) SA 36 (O). B, a minor whose parents were divorced, and her husband had agreed to execute an ante­nUptial contract.· Before the execution B had informed her father, in writing, of the intended marriage and the tenns of the contract. In an application for the post-nuptial execution and registration of a notarial agreement having the effect of an antenuptial con­tract, the father had offered no objection. HELD, as the guardian had knowledge of the tenns of the agreement and offered no objection, he had impliedly consented to the execution of the agreenent.

A guardian need not aonsent to the aontraat before it is made; it is suffiaient if, knowing of the terms, he gives his aonsent ·after the event and so ratifies the aontraat.

Fouahe v Battenhausen & Co 1939 CPD 228. F, a minor, had bought a car from B in tenns of a hire-purchase agreement. At the tine of the agreement he had falsely told B that he was of age. He told his father 1111 the material tenns of the ·contract the day

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after entering into it. The father later told B's representative that he was satisfied. On being sued :fur the return of the car and arrear instalments, B pleaded that the hire-purchase contract was unenforceable because of his minority, and counterclaimed for cancellation of the contract and'return of a car he traded in. HELD, F's father, though he was not at first aware of the precise terms of the contract, subsequently approved of it with full know­ledge· of all its material terms. This confirmation is of the same effect as if he had originally interpos~d his authority.

3. 3 Marned· women subjeat to the mali tal. power of their husbands.

Un.der South African law persons either marry without an apte­nuptia~ contract in which case they subject themselves to the connron la:w regime of cornnu.m.ity of property, cornnu.m.ity of profit and loss and the marital power' or enter into an antenuptihl contract before their marriage excluding these connron law conse-quences. · ·

In Zimbabwe every marriage since 1 January 1929 between spouses whose matri.oonial domicile is in Zimbabwe is out of cOlllllli.Iliity of property by virtue of section 2 of the Married Persons Property Act (Cap 178).

Marriages in cornnu.m.ity of property may still be ~et with in Zimbabwe: a few were entered into before 1 Jan).IB.ry 1929 and commtmity, Of property has not been excluded by notarial' deed under s 3 of the Ml.rried Persons Property Act; some haye been solemnised after 1 January 1929 and the spouses have by an . instn:nrent in writing expressed a wish to be exelllflt from the pro­visions of s 2 of the Act; others have been entered into without an antenuptial contract between spouses whose matrimonial .domicile was in South Africa; still ot.Jlers were .celebrated in South Africa without antenuptial contr!fet between spouses who have moved to Zimbabwe.

Full details of marriage ·in commtmi ty of property can' be found in WiZ.Ze 's P:rinaipZ.es of South Af:riaan £a1;) (1977 p 10~ and :ful).

The contractual capacity of .a married woman subject to the husband marital power is dealt with below.

Ma!'l'ied women subjeat to the ma:ritaZ. power of their husbands have l.imi ted power to aontmat. The wife's capacity is similar. to that of a minor under the guardianship of her husband. She has no power to ·enter into any aontraat and bind herself, or her husband, without the knowledge or aonsent of her husband, unless suah aontraat is subsequently ratified by him. If she purpo!'ts to do so, the contract· is void.

There are the foZ.Z.owing airaUlliBtanoes where the joint estate aan inoUr. an obligation th~ugh _the aat of the wife -

a. En:riahment

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If the wife purports to contract and the joint estate is enriched, the husband in his capacity as aJministator of the joint estate will incur an obligation based on the law of unjust enrichment.

t

Karsten v ·Forster 1914 CPD 919. F, sued K, a woman· rnrried in community of property, for r: 50 which K had agreed to pay F in consideration of his signing a certain option for the sale of a farm. K pleaded that the contract was void because it was signed by ·K, who was rnrried in community of property, and the husband had not consented. HELD~ K and her husband had undoubtedly been enriched by the sale of the farm, which would not have taken place

~ if F had not been induced to sign the option, and the husband was bound by the contract.

b. NecessaPies

AZZ wives,· whether marPied in or out of aommu.nity of property, are entitled to make aontraats for household neaessaPie~ without referenae to thei1' husbands.. (CZar* & Co v Lynah and Reloomel v Ramsey below).

WhePe the maPPiage is in aominunity of property, the joint estate is bound and only th.e husband in his capacity as its administrator may be sued during rnrriage. If the rnrriage is dissolved before the debt is paid, the trader can sue the husband for the whole debt or the wife for half, a husband who pays the whole debt recovering half from his ex-wife.

Whe!'e the mapriage is out of aommunity, husband and wife are jointly and severally liable to the trader, which means he can sue either husband or wife for the whole amount. If he coliects payment from the husband, that is the end of the rntter. But if he chooses to sue the wife, or if she pays voluntarily, the wife has a right of recourse against the husband for his pro rate share of the debt, determined according to -the relative means of the spouses.

When the parties are living ·togeth~1', even a notifiaation to a s1.-pplier that the husband has withdrawn his wife's right to pledge his aredit has ·no legal effect. (Clark & Co v Lynah below). ·

It is no defenoe. to a supplier's alaim fop the husband to argue his wife had no need to buy on c;red:it.

Cla!'k & Co v Lynah 1963 (1) SA 183 (N). C sued L for Rl22 owed in respect of necessaries of life and household necessaries sl..I]Jplied to his wife. HELD, the wife has power to bind her husband in respect of all those matters reasonably incidental to that-organized family establishment, whether the articles furnished are consumed or used by the husband or the wife, their children or their servants or anyone else who is living with them either permanently or temporarily as part of the joint establish­ment of the marriage partners. A notification to a supplier that

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the husband has withdrawn his wife's right to pledge his credit has no legal effect so long as the wife and husband continue to live in, or during any period when they subsequently re-establish, a common household. The hu5band in an action for an am:>unt owed in respect of necessaries supplied to his wife cannot rely on the fact that his wife has been provided with sufficient ftmds to make it unnecessary for her to buy on credit.

Where a wife abuses her rights her husband can tenninate her authority to pledge his credit by obtaining an interdict from the court.

Traub v Traub 1955 (2) SA 671 (C). A Nife was not short Of any reasonable necessity or luxury but was incurring debts which annunted to gross extravagance and prodigality. HELD, the husband should be granted an interdict restraining his wife from binding his credit.

If the wife is living apart from her husband owing to his fault she can bind his credit, but not where the common household is broke~_up by the wife's conduct.

Gammon v McCZiaoe 1925 CPD 137. G met his wife on the way out to settle in South Africa and married her soon after arrival. l'bt long after settling in Graharnst(lWI1 he gre• tired of her and forced her to return to cape. Town where she bought necessaries. HELD, a husband is botmd to support his wife who left him owing to his miscondUct and is liable to pay for necessaries supplied to her.

Bing and Lauer v Van der Heever 1922 TPD 279. B & L, dentists, sued V der H for £46 in respect of dental services rendered to his wife after she had unlawfully deserted him. HELD, a husband is not liable for necessary dental services rendered.to his wife after she has unlawfully deserted her husband and is living apart from him.

If, after the common household has broken up, the husband - adequate Zy provides for his wife and nctifies a supplier that he

is. doing so and will not pay for necessaries supplied to her, the supplier cannot sue the husband for the cost of necessaries supplied after receipt of the notice.

Macnaught v Caledonian Hotel 1938 TPD 577. M and his wife. had lived- at a hotel. After leaving M notified the hotel that he would no longer accept liability for board and lodging supplied to his wife as he had made provision for her els~here. HELD, where a husband maliciously deserted supplies his wife adequately with necessaries and gives notice to a tradesman that he is doing so and that the tradesman is not to look to him for paynent of any expenses incurred by his wife, the tradesman is not entitled to recover from the husband the price of necessaries subsequently supplied· to his wife. ·

If, although the marriage has actually been dissolved, the husband

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comports himsel-f as if the marriage stil-l- exists, he wil-l aontinue to be Uabl-e.

Thompson v Mockl St'eam',Lauruiry Ltd 1926 TPD 674. After divorce, T hired a house in which he, his children and his fonrer wife, in the capacity of manageress of the household, lived, to outward appearances as a married couple with children. The fonner wife pledged his credit for laundry work. HELD, Twas liable on implied agency, namely authorization of his former wife to pledge his credit for household necessaries.

Whether artial-es bought by a wife are neaessaries or> not is for the coU:r>t to ckcick and in &aiding it has regard to the soaial standing and means of the parties and theii' habits of l-ife in the past.

Retooniel- v Ramsay 1920 TPD 371. Ramsay, a doctor with a fair practice, intending ta be absent for about eighteen ronths from his wife, supplied her With sufficient clothing and·a ronthly allowance and forbade her to pledge his credit. During his absence she bought on credit so1re twenty yards of crepe de chine and about ten yards of silk which she used to make dresses and blouses for herself and the children. Reloomel sued the doctor for the cost. HELD, there is nothing unreasonable in the wife of a well-to-do doctor purchasing silk material for dress material, especially if we ·consider the fact that his wife had bought such material before at the saJre shop and it was paid for by her husband. Reloomel was prima facie entitled to succeed in his claim. It makes no difference in a claim for necessaries whether the husband and wife are married in conmn.mi ty of property or not; in either case it is the duty of the husband to pay for the upkeep of the household. · ' ·

c. Pub Uc tmde:r>

A married woman openly aarrying on any r>etail or' whoZesate trade may validly aontroat in all matters aonneated with suah trade and may consequentl-y bind hersetf and her husband and sett artd bU:r>den the stoak of the business (Grotius 1.5.23).

Smith and,Walton (SA} (Pty} Ltd v Holt .1961 (4) SA 157 (D). The facts of this case are not important. What is important is that Wessels J. in the course of his judgment said: "It appears to be established law that where a woman married in col1111lllllity of property carries on business as a public trader she is deemed to be acting as her husband's agent in every transaction entered into by her

· in connection with that business. It is equally clear that the assets and liabilities of the business do not fall outside the joint estate of the parties so as to form part of a separate es.tate." ,·

Van Heerden v Bothavilte Liaenae Certifiaate Board 1954 (1) SA 489 (O). After the licensing board had refused to grant VH a certifi­cate for a licence for a second retail butchery ~wing to his having

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been convicted of certain offences, his wife who was married in conum.mi ty of property applied in her name with his cons·ent for a· certificate. This was refused. HELI, where a woman married in community of property sets herself up as a public trader she is to be regarded in relation to her trade, as her husband's agent. The board was entitled, in ·considering her application, to take into accotmt the character of her principal who by virtue of the marital power could exercise control over her.

The husband's oonsent to the t~ding may'be withdnxwn.by him o~ te~inated by his insa~ity.

Tucke~'s F~esh Meat Supply (Fty) Ltd v Echakowitz 1958. (1) SA 505 (AD). E, a woman married in community of property, had with her husband's consent carried on the business of a butcher. When her husband became insane, she was appointed his curator bonis with powers' to be exercised subject to the Master's approval. Subsequently, she passed a mortgage bond in favour of T. HELD, E in carrying on business as a public trader was acting as her husband's agent and her agency had tenninated on her husband's 1 insanity. She did not have the power to pass the bond without the Master 's approval, which had not been obtained.

CheniZZe Indust~ies v Vo~ste~ 1953 (2) SA 691 (0). Again the facts are tmimportant. Horwitz J however. states in his judgment that where a woman trades as a public trader, the husband can withdraw·his consent, even in the absence of reasonable grotmds therefor, and, provided the withdrawal is brought to the notice of creditors and persons contracting wi. th her, such withdrawal has the effect of relieving the husband, and the joint estate as such, from liability on contracts ente~ed into by the wife thereafter with persons having knowledge of the withdrawal.

A public t~de is one in which the wife indicates to the pubZic, expPessZy o~ impZiedZy,. that she is open to do business with any p81'SOn, WhateV81' the business 01' pPofession earned on.

GrobZer v Schmilg and Freedman 1923 AD 496. The wife of G, a fanrer, sold vegetables and fruit grown by herself, and poultry and eggs produced on the farm. G.was an old man and the owner of another farm to which he often had occasion to go. The wife did a good deal of fanning and other b·.1iness . S and F sued the wife, who was married in community of :;Jroperty, on . three promissorj notes .signed by her without G's assistance, claiming that she was a public trader and as such liable on the notes. HELD, she was not a public trader. De Villiers JA said: "To carry on fanning operations is a private business, whiC:l is nobody's concern but that of the farmer, and the mere fact of selling the produce of the farm does not convert the private ·:msiness into a public one."

HiZZ & Co v McClure 1909 Til 212. · '1-1 was a woman married in community of property who carried on business as a boardinghouse keeper. HELD, she was a public trader.

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d. Authority of the court

Where a husband is absent from the country, or unreasonably withholds his consent to his wife's contracts, the court may authorize her to contract, either specially or genepQZly.

47

E:c parte Kamfer 1918 CPD 2. K was absent from the cmmtzy aud his creditors were pressing for payment COURT appol.nted K's wife, to whom he was married in coll111llll1.i ty of property, as curator bonis of K's estate, with all the powers of a general agent.- Arry bonds s.he might wish to pass. should be subject t;o the Mister's approval.

For a similar appointment on the husband's insanity see Tucker's Fresi Meat Supply (Pty) Ltd v Echakowitz in c. above.

e. Statutory E:caeptions

A woman married in community of property can contract mder the following statutes -

Insurance Act (Cap 196) s 39 provides a married woman may effect and own a life policy, hold acquire and dispose of any ~nterest in a life policy' hold and dispose of any moneys' or any asset acquired with those moneys, accruing from any interest in a life policy, in all respects as if she were a single woman of full age and capacity •.

Post Office Savings Bank Act (Cap 249) s 10 provides a 'married woman, whether mder marital power or not, may be a depositor and without assistance execute all neceisazy documents, give all necessazy acquittances and enjoy all the privileges and be liable to all the obligations attaching to depositors.

Building Societies Act (Cap 189) s 19 provides a married woman, " whether mder marital power or not, may be a member of or depositor

with any building society, and may, without her husband's consent or- assistance, execute all necessazy docurrents and generally have all the privileges and obligations attaching to members or depositors.

3.4 Mentally Ill Persons

A contract mads by a mentally ilt person is void if at the time of the agreement he could not understand and appreciate the transaction into which he entered or if his consent was motivated or influenced by an insane delusion caused by mental disease.

Lange v Lange 1945 AD 332. At the time of his marriage L mder­stood the nature of the contract and appreciated the nature of the obligations he was mdertaking, but he was already suffering from mental disease and his volition in entering into the marriage was influenced by auditozy hallucinations caused by the disease. HELD, the marriage should be declared null and void ab initio (from the

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begirming) . It is not necessary to prove that a person, owing to mental disease, did not tmderstand or appreciate the nature of the contract; proof that his consent was m:>ti vated or influenced by an insane delusion caused by mental disease is sufficient. ·

Pheasant v Warne 1922 AD 484. In an action for specific perfor­mance of a contract for the sale of land, the issue was whether the seller W, when he authorized his agent to conclude the sale, was tmder a mistake as to the price to be paid. HELD, there was no mistake but, in view of certain evidence which indicated W might be mentally ·incapable of binding himself by contract, the case was remitted to the trial judge so that W might be given an opporttmi ty of raising this defence. J, court must determine whether a pers.on' s mind was such that he could tmderstand and appreciate the transaction. The onus of establishing defective m.entali ty was upon the person relying upon it. ·

MOZyneaux v NataZ Land and Colonisation Co Ltd [1905] AC 555 (PC). The,compa:lly sued M, executor of Henry Cowey, for .£4 600 being the '

, am:>tmt of a m:>rtgage bond in their favour passed by virtue of a power of attorney executed by. HC at a ·time when he was insane. The company and its manager were unaware of HC's insanity. HELD, a contract rnde by an insane person is void.

Whether or not a mentaZZy iZZ person aouZd understand'and appreciat~ the transaation is a matter> of fMt in ?Jhiah .the aourt ?JiZZ aon­sider aU the relevant evidenae.

Uys v Uys 1953 (2). SA 1 (E). U met his future wife. at a cafe in Port Elizabeth and continued their association at a cinema in the evening~ He told her that he was the owner of a farm ·in the Free State and was finding difficulty in managing it himself. He said he wished to rnrry her to have help in hi~ farming operations. . U 's proposal was accepted and the marriage took place the following morning. What he had said was tmtrue and immediately after the marriage he alarmed his wife by conduct of a peculiar nature. On an action for nullity of marriage, evidence was led which indicated that U was not able to appreciate the obligations which he had tmdertaken, even though he might .well have tmderstood that he was entering into a rnrriage cerem:>ny. HELD, the marriage should be set aside and declared null and void and of'no effect.

Prins Zoo's Curatore v Croffor-d and Prins Zoo 1905 TS 669. P, who had been declared of unsotmd mind by order of court, married C in community. At the date of the marriage the order was still in force but P was as a fact of sotmd mind and entered into the contract voltmtarily'and fully tmderstanding its significance. HELD, the marriage was valid.

A mentaZly ilZ per-son may inaur an' obligation on the grounds of enrichment (Wessels 1951 paras 701, 702) • ·

(

Molyneu:r v Natal Land arid Colonisation Co Ltd (supro). Sir

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Henry de Villiers 'says, "The Roman-Dutch law, while denying the capacity of an insane person to bind hin5elf by contract, recog-nises the equity of allowing a person who has in good faith .

~ expended money on behalf of a lunatic have his expenses recouped. A person may, for instance, becone nBgotioru!n gestor (manager of another's affairs) fOr a lunatic, and, although·he acts in such a case without any mandate whatever, he can recover all sums legitimately expended on behalf of such lunatic." ·

Where. a 'person has been declared mentally disordered or defective under the Mental Health Act (Act 23 of l976), the order operates while in force so as to create a rebuttable presumption that he is mentally ill and any contract made by him will be void unless it be proved that at the time he was i;n full possession of his faculties or his state of mind was such that he was able to understand the nature of.the'contract and appreciate properly the duties and responsibilities created by it (Prinstcio's Curators v Crofford and Ppinsloo above).

3.5 Drunk persons

Where a person enters into a contract while so drunk that he does not know he is entering into .a contract or has no idea of the terms, the contract is void but not if the drurik person is merely more easily persuadable or more willing to conclude the contract.

Van Mitzinger v Badenhorst 1953 (3) SA 291 (T). B alleged that through his mediation a5 an estate agent VM sold a plot with houses to ·a certain Naude. VJ.-1 argued that as a result of the influence of liquor he did not know that he had signed the con­tract of sale and did not know what stood in the contract. HELD, there was a valid contract; drunkenness in order to nullify a contract, must be of such a nature that the person concerned was not only more easily able to be convinced or more willing to con­clude a contract, but he did not know that he had entered into a contract·or had no notion of its provisions.

A drurik person can incur an obligation on the ground of enrichment.

3.6 Prod;igals

A prodigal, who is a person declared by the court to be incapable of managing his affa:i,rs as a result of a propensity to squander his assets, cannot contract with regard to his_ property and if he does so the contract is void, but apart from his property he is entitled to contract freely.

CiZUe v CiUie 1938 CPD 513. A wife. alleged that her husband, to whom she had been previously married but from whom she was now divorced, was squandering his assets and was almost continually under the influence of liquor. HEIJJ, an order should be granted declaring C a prodigal, interdicting him from dealing with his property and appointing a curator bonis to his property.

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Mitchell- v Mitahell & Others 1930 AD 217. · M had been declared incapable of nianaging his affairs and curators bonis had been appointed by the court. · Thereafter M Hithout the curators' consent married. HELD, a curator bonis deals with the estate of a person tmder curatorship and not with his person. In his personal relationship to <!lthers not affecting his estate the curator has no right to interfere. If he chooses to marry, the curator cannot interfere except in so far as it relates to his property. Where the persen under curatorship has not been declared a lunatic, the curator has no locus standi to upset his marriage merely because marr~age eritails maintenance.

If a prodigal aontmats without his aumtor 's aonsent the aontraat may be subsequently mtified by the aumtor.

Phf:l Morkel Ltd v Niemand 1970 ( 3) SA 455 (C) . N, ·who had been declared a prodigal, bought goods on hire-purchase from PM. I'Yhen N failed to pay the instalments due, PM sued him for the full balance. · The question of law arose whether the agreement was susceptible to ratification by N's curator. HELD, contracts entered into by a prodigal are equally capable of ratification by ~ his curator as in the case of a minor's contracts.

3. 7 Insolvent persons

Insolvency :i5 the condition of a persor. when his financial positio11 reaches the stage· that he is unable to pay his debts or his liabi­lities exceed his assets. In :Such an event the condition of the debtor may be officially recognized by the law for the protection not only of his creditors, but also of other persons. The Insolvency Act (Cap 303) provides that the court may, at the instance of the debtor himself or of his creditors. grant an order sequestrating the estate of the debtor. The effect of a sequestration order is that the debtor becomes statutorily inspl­vent and all his property is placed under the control of a trustee who realises it and distributes the proceeds among the various creditors in accordance with the Inso:vency Act. The insolvent becomes subject to legal disabilities anq these continue until his estate has been finally distributed and he has been· rehabilitated.

The .following restriationit are plaaed on the insolvent's freedom of aont:ruat - · ·

(a) An insolvent may not contract in such a way as to purport to dispose of any property of his insolvent estate (s 37 (2)(a) of the Insolvency Act).

(b) He may not without the written consent of his trustee enter into any contract whereby his estate is likely to be adversely affected (s 37(2) (b)).

(c) He may not without the written consent of his trustee have any interest in, or be employed in, the business of a trader who is a general dealer or a manufacturer (s37(3)).

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If the ~nsoZ.vent aontraats in breaah of these provisions, the aontraat is not void but remains vaUd until. set aside by the trustee. ·

51

FairUe v Raube:nheimer 1935 AD 135. F recovered in the magistrate's court IJX)ney lent to R when insolvent. The defence of insolvency at the time of contracting was not raised until the appeal was heard by the Transvaal Provincial Division and that court, bound by _previous decisions that such a contract. was void and unenforceable, reversed the judgment of the magistrate. HELD, the fact that an insolvent has entered into a contract without his trustee's consent does not render such a contract void but nerely voidable at the instance of the trustee. It is, therefore, not co!Trpetent for a defendant sued . on a contract to raise for the first tine on appeal the defence that he·was ·insolvent when he entered into the contract and his trustee had not consented thereto in writing. ·

Apart from the provisions above, the faat' that a person entering into any aontraat is insolvent shall not affeat the validity of that aontraat (s 37(2)). ·

Also, UJhere an insolvent UJi thout his trustee's aonsent aUenates property aaquired after sequestration to a person who was not aUJare and had no reason to suspeat that the estate was sequestrated, . the alienation shaZ.Z. be va'lid (s 40(1)).

3.8 Alien enemies

' ".

An alien enemy is a person residing or carrying on business in enemy territory and any aontraat made UJith him in times of war is void as public polfcy requires that the State should not be hampered in its prosecution of the war nor the enemy in any way assisted.

Farf::,enfabriken Bayer AktiengeseZ.Z.sahaft v Bayer Pha:tm:J. (Pty) Ltd 1963 (1). SA 699 (FC). FBA, a company in Western Germany whose predecessor in title had the right in terms of a letter dated before the war to obtain from BP retransfer of a trade mark and goodwill on demand,. applied to the High Court in Southern Rhodesia for an order directing BP to' transfe:l:' the trade mark. This was refused. HELD, on appeal to the Federal Suprene Court, the contract tended to increase the resources of the enemy or cripple the resources of the subject and had accordingly been abrogated by the outbreak of war. The principles of law. were the same in Southern Rhodesia as in England and were summarised as follows·. There was no general proposition that a state of war avoided contracts between subjects and enemies. Public policy required that the Crown should be unhanq:>ered in its effort to win a war; therefore contracts which infringed security, or which were of economic advantage to the enemy or which economically inhibited Her Majesty's subjects were contrary to public policy and weT$ destroyed by abrogation on the on the outbreak o£ war. Exe~uted contracts we.re not affected by these considerations . Executozy contracts, that is contracts

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which :-cqui:-ed further ·perforrna:ncP- by one or both parties, were abrogated if they were of a type in which either- such further performance necessitated intercourse w1th the enemy, because o:: the _?Ossib~e security dangers inhewnt in such intercourse, oro ~.e per:t:·Jnnance of further services or the fulfilment of futt1re roligations b:· the parties l'll.l.ght hamper the war effort by benefit. tc .._, ..... enef!!Y or detri.nent to tlds catmtry.

' hero an .enemy aubjeat r-eaidsa in Zimbabwe, he has ft U aontroatuaZ -.mpaaity : .:ul any aontr-aat mzds with him ia vaUd unZeaa bad as

, a.q11inst rubZi~ poZiay. His internment appears to make no ,1ifference unless perfonnance becomes impossible as a result (see Supervening Impossibility of Perfonnance in 4. 3 e. in Part 4 below) .

Hoah v SaobZe 1916 TPD 642. H, an enemy subject resident and canying on business as a tanner and leather merchant in the Union at the outbreak of war, was thereafter interned. After his internment he in the course of his business sold and delivered goods to S, a British subject resident in the Union. HELD, the contract of sale was valid and H could institute an action in respect of such contract.

3.9 Ar-tificial- pePSons

The contractUal capacity of artificial (juristic) persons is too involved a subject for. full treatment in this handbook and reference slnuld l:)e made to Tett and Oladwick 's Rhodesian Company LaJ,; (1976 p 49 and fol). In principle an artificial person's contractual capacity is determined by its constitution. If it is created by special statute (Cold Storage Commission or Air Zirnbabw1 reference IIDJSt be ma.de to that statute; if by Royal 01arter (ilrit: South Mrica CoJillany) to that 01arter. If it is a company regis­tered under the Companies Act (Cap 190) , its contractl,lal capacity is determined by the objects clause of its rnenDrandurn of associati• either expressly there conferred or such as ma.y fairly be regarded as incidental to, or consequential upon, the specified objects.

If an ar-tifiaiaZ per-aon enter-a into a aontroat whiah it haa no aontroatuaZ aapaaity to mzke, the aontroat ie void and aannot be rotified. ·

Re Jon Beaufor.te (London) Ltd [195 3] 01 131. A company, which wa authorized by its rremorandurn to· cany on business of costumiers arl gown-makers, embarked on the· business of making veneered panels an erected a factm:y for this purpose. The coJ1llany later went into liquidation. Three creditors, a firm of builders who constructec the facto:ry, a finn who supplied veneers, and a finn who supplied coke, all proved in the liquidation. The liquidator rejected their claims. HELD, their claims were rightly rejected on the ground that the contracts were ultra vires (beyond the company's , powers).

Evans v BPUnnsP Mond and Company Limited [1921] 1 01 359._ BM had

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been fonned to acquire and carry on a business of chemical manu­facturers. Its objects clause after stating this main object, went on to pennit the company to do "all such business and things as may be incidental or conducive to the attairunent of the above objects". BM resolved to give £100 000 to such universities as were selected for the furtherance of scientific education and research. E, a shareholder, sought an injunction (interdict) to prevent payment of the money on the ground that it was ultra vires the m!9JIDrandtml. HELD, BM had discharged the burden of proving that the expenditure was conducive to, and indeed necessary for, its continued progress as· chemical manufacturers.

London County Council. v Attorney Ge'l'le:mt [1902] AC 165. LCC had power to run tranways. It ran omnibuses to feed the traJmYays . HELD, this was outside its powers. '

Foster v London, Chatham and fuver Rait Co [1895] 1 QB ·111. c.'r::l railway company acquired land under a special statute for the purposes of its railw~y and constructed the line on arches. Tho company let the space under the ardies as shops and workshops . Irate neighbours objected because of the noise and rubbish and clained it was ultra· vires. HELD, the letting was valid as beir,g fairly incidental to the powers of the company.

Ashbury Railway Carriage and Iron Company v Riche [1875] LR 7 HL 653. The nenvrandtml gave the company power to make and sell railway carriages • The· directors entered into a contract to purchase a concession for constructing a railway in Belgitml. The articles gave express power to the Company to extend its business beyond the memorandUm by special resolution. The company passed a special ·resolution tq ratify the purchase. HELD, the purchase was ultra vires the memorandtm1 and, even if every share­holder had been in the room and had endorsed and agreed to it, the contract was voiq.

· There seems to 9e no reason why the equitabw rutes as to unjust enriahment shoutd not a:ppty to the rights of the parties in any uU:m vires transaction (Tett and Chadwick 1976 p 51) •

3.10 Itlegat assoaiations

An itlegat association has no toaus standi in judiaio (right to appear and be heard) and any contract- m:xde by it is void and unsnforceab le.

But under the doatrine of unjust enrichment a rerrv;;dy ties against its·merribers who have derived benefits at the expense of others or to which they were not entitkd and any person trading with an iUegat association or with its merribers has a 'liability to pay for bene~ts received by 'him.

Wakefield v ASA Seede (Pvt) Ltd 1976 (4) $A 806 (R). A body kncwn as the Hybrid Seed Association of Rhodesia had entered into an agreenent with ASA Seeds in tenns of which members of the

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association would grow and produce certain types of seed M"lich would then be sold and delivered to ASA Seeds. . The JJ'embers of the association then instituted an action through W, whom they had appointed as their representative for the purpose, against ASA Seeds for the pa)"JJ'ent of $85 000 which they claill'ed was payable in terms of the contract. One of the defences raised by ASA Seeds was that the association should have been registered in terms of s 7 of the Companies

1 Act (cap 190). 'This had not

been done and it therefore had no legal status, and this JJ'eant further that it had no contractual capacity and the contract was therefore void. HELD, the contract was void and tmenforceable but, notwithstanding the fact that the goods were supplied in terms of an invalid contract, the meinbers of the association were entitled to claim payment individually for the goods supplied by instituting a claim·based on tmjust enrichment.

SECTION 4. SERIOUS 'INTENTION TO CONTRACT

The parties must seriousl-y intend to aont:ru.at

Legal systems have developed various means by \offiich the parties are Pequir'ed to indiaate the eeriowmees of their intention to aontPaat -

(a) The Roman Z{]l;) required, in addition 'to agreell'ent,- 'causa' (perhaps best rendered as enforceability) which took four fonns : one party delivering a thing to the other; a creditor making an ent:ry in his accotm.t .books relating to a debt owed him by another; the agreement being expressed orally in a.particular form, namely question and answer; agreement alone being sufficient in a few limited cases. An agreement rot falling into these four forms was not enforceable by action.

(b) The Roman-~tah ZGLJ~ l-ffiich developed from the reception of the Roman law into the Netherlands, refused t<_l adopt the subtleties of ·~usa' and adopted the tule that, provided the agreement had resulted from any reasonable C(\USe (not to be confused with 'causa'), it was binding in law.

(c) The EngU.sh laLJ applies the doctrine of 'consideration'. Consideration is a cotm.ter-perforiliance or quid pro quo (soll'ething for soll'ething) for eve:ry promise made and is necessa:ry for the validity of eve:ry simple contract (not sealed covenants). The origin of the doctrine is obscure and it appears to have grown up quite independently of the . concept of 'causa' in the Roman law. It was, at lEias t, influenced by it and the two ~ave been confused.

(d) The South Afriaan ZGLJ was for soll'e years uncertain. · In the cape courts. tmder. the influence of English law ideas, it was thought that· when the Roman futch writers spoke of · 'causa' they meant 'corisideration' in the English sense.

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This view was rejected in the Transvaal and the matter was one of considerable legal controversy tmtil 1919, when· the Appellate Division decided in favour of the Transvaal view that consideration is not essential to a binding contract in South African lC'M but it is sufficient that the agreement

· be seriously and deliberately made with the intention of creating a.binding contract. (Conradie v Rosso~ below). . .

Conradie v Rosso~ 1919 AD 27~. In an action for damages, C alleged that R had given him an option to buy his farm for some £4 ooo and had wrongfully cancelled the option. R argued that the allegation was bad in law, in not stating that consideration had been given for the option. HELD, the Cape Provincial Divi­sion's decision being reversed, R's argurrent should be disallowed. ''We are agreed", said Solomon ACJ, "tipon the general rule that agreements seriously and deliberately made are enforceable at law •.. it follows as of course that consideration in the sense of the English law is wholly foreign to the conception of a con­tract tmder Farnan-Dutch law, and is quite unnecessary for the purpose of creating a binding obligation."

These principles were restated by Corbett AJA in Froman v Robertson 1971 (1) SA 115 (AD), the facts of which are unirnpo.rtant. The judge says, " ... these authorities clearly establish (i) that the requirement of justa causa or reasonable cause is suffi­ciently satisfied if the promise is made seriously and deliberately and with.the intention. that a lawful obligation should be estab­lished, and (ii) that in determining 'whether a promise is fotmded

. upon justa causa or reasonable cause the ground or reason for the promise should be examined."

4.2 Where the parties do not intend that binding legal relations will flow f1'011! their agreement, the agreement is not a contract. Examples are given below -

a. Agreements of a social nature (an offer to take a friend to ltmc;h and accepted. by him) because it is not intended that legal rights and duties should flow from them.

b. Agreements binding in honour only

Robinson v Randfontein Estates Gold Mining Co Lt(/. 1921 AD 168. Robinson claiJTed he had obtained a right of pre-emption in respect of a certain farm. It appearec;l that he had helped the owner regarding the beacons on the farm and the owner and his wife had then said, "If ever we sell the farm you shall have the voorkeur­recht (right of pre-emption) as far as the purchaSe is concerned." The owner's executor, asked why t:}le lreirs when they decided to sell the farm approached R' s representative, replied, "because my father had promised him, and so we kept the word of our father." After the bargain had been concluded, R's representative wished the executor to sign a writ.ten tmdertaking conferring a right of pre-emption over the second half. The executor repliedr ''Mt .

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father's word was good enough for you, and I give my word of honour also; if I want to sell the second portion also I will give you notice." HELD, this assurance amoooted to a general promise binding on honour and conscience rather than a definite contractual undertaking enforceable at law.

c.

d.

e.

Agreements excluding the jurisdiction of the courts (an agreement which is not entered into as a fonnal or legal agreement and shall not be subject to legal jurisdiction in the law courts). ·

Agreements entered into as a jest, saraastia overstatement or the like (a colllllDn statement as "for two 'f')ins I lvould punch him on the nose", referring perhaps to· an employer, cannot be turned into a contract by giving the offeror two pins). · •

Agreements entered into for some ulterjor motive and without inteneing to be bound inter se (amongst themselves) by its terms.

Kilburn v Estate Kilburn· 1931 AD 501. K had before his marriage ( passed and registered a notarial bond for £500 upon all his pro­perty in favour of his wife, purporting to secure a stnn of £500 which K had verbally promised to pay his wife. The promise was not serious and K had no intention of paying his wife the stnn. 'The. whole intentlon of the spouses was that the wife should claim the sum :.f and when K went insolvent. HELD, there was no obliga-tion and the wife cOUld not claim on the bond. ·

SECTION 5 • ~GUENESS

5.1 The agreement must not be vague

An agreement must not be so vague that its meaning aannot be ascertained by a aourt.

Carthew-GabrieZ v Fox and Carney (PvtJ Ltd 1978 (1) SA 598 (RAD). CG1 had been employed by F and C, a:il estate agency business, in terms of a written agreement of employment which provided that, when CG ceased to be employed by F and C, "he shall not either directly or indirectly be employed in or by nor have any interest ' of whatever nature in any business conducting a business in any way sjmilar to that of ,the company for a period of four months from tlhe date of ceasing employment with the company and within an area of Rhodesia in which the company. is carrying on its business. The parties agree that the restraint is reasonable both as. to time and area". CG resigned and commenced business as an estate agent in offices just aroood the corner from F and C 's offices in Salisbury. F and C sought and obtained an inter­dict from the General Division restraining CG from conducting the business of an estate agent within the nnmicipal bol.mdaries of

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