Introduction to the Theory of Law & Law of Contract
ASSIGNMENT NUMBER CL2
PART A
INTRODUCTION TO THE THEORY OF LAW
&
PART B
LAW OF CONTRACT
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Introduction to the Theory of Law & Law of Contract
PART A: INTRODUCTION TO THE THEORY OF LAW
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Introduction to the Theory of Law & Law of Contract
TABLE OF CONTENT
PART A: INTRODUCTION TO THE THEORY OF LAW 2
QUESTION 1 5
ANSWER 1 5
Relevance of Legal Conviction of the Community in South African law 7
QUESTION 2 9
ANSWER 2 9
Hence the four types of capacities are as follows: 11
Name of the cases, where Capacity exists or Does not exists: 12
QUESTION 3 14
ANSWER 3 14
Comparison between Real Right and Personal Right (that is right arises from Conclusion of Contract) 18
QUESTION 4 20
ANSWER 4 20
QUESTION 5 23
ANSWER 5 23
Distinction between Onus of Proof and Evidentiary Burden in the context of civil litigation 25
PART B: LAW OF CONTRACT 27
QUESTION 1 28
ANSWER 1 28
First Circumstance 29
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Second Circumstance 30
Third Circumstance 31
QUESTION 2 32
ANSWER 2 32
Impossibility at the time of conclusion of contract:(Initial Impossibility) 33
Impossibility after contract signature 34
QUESTION 3 37
ANSWER 3 37
QUESTION 4 39
ANSWER 4 39
Mora Debitoris 40
Mora Creditoris 42
BIBLIOGRAPHY 45
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QUESTION 1
What does the expression “legal convictions of the community” mean?
What is the relevance thereof in South African law?
ANSWER 1
Bois et al (1100:2011) while clarifying what legal conviction of the community
state as follows:
“The reference to the ‘legal convictions of the community’ is better
understood as an acknowledgement of the fact that the court, in
exercising its judicial discretion to decide the wrongfulness issue, must
be sensitive to the boni mores of society.”
Hence the legal conviction of the community can also be understood as the
acknowledgement of good moral values of the community by the court, while
exercising the judicial discretion.
The Department of Water Affairs, Republic of South Africa in one of their
presentation “The Presumption of negligence” states that:
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“The five requirements (or elements) necessary for delictual liability are: 1.)
Conduct 2.) wrongfulness 3.) fault (intention or negligence) 4.) causation 5)
Harm.”
Hence it can be seen that one of the requirements of delictual liability is
wrongfulness, which need to be proved for a person to have committed a
delict. For any conduct to be wrong, it must be legally wrong, just being
morally wrong is not enough. However, in case if there does not exists any
law with respect to particular issue, in that case the court asks, though there
does not exist any law with respect to particular issue, but whether the
conduct of the person is considered unreasonable, based on the legal
conviction of the community? Whether the community would have considered
the issue as just, not only morally wrong but legally wrong too.
Bois et al (1097:2011) also stated that:
“Negligent conduct giving rise to damage is …. not actionable per se. It is
only actionable if the law recognizes it as wrongful.”
Just that the conduct is unreasonable does not make it wrongful due to other
reasons attached to it. The reasonableness of conduct must be established
objectively.
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Hence legal Conviction of the community is the guide to the court, to decide
what is wrong and illegal, when there does not exist any written legal guide.
Relevance of Legal Conviction of the Community in South African law
The changing values of the society, changing technologies and developments
create legal uncertainty and the law must adopt these changes in order to
remain effective. Kleyn & Viljoen (15:2011) while referring one case where the
court using the legal convictions of the community referred as follows:
“In Clarke v Hurst 1992 4 SA 630 (D) the court had to decide if a wife may be
appointed as her husband’s curator with the power to make decisions about
his medical treatment. The man was terminally ill, in a permanent vegetative
state and was unaware of his surroundings. There was no previous decision
in which a court allowed passive euthanasia. Justice Thirion, however, found
that the legal convictions of the South African community do not regard the
stopping of medical treatment as unlawful if a person is being kept alive
artificially. Accordingly, he granted the wife’s application. A 1997 discussion
paper of the South African Law Commission recommended that this position
should be confirmed in legislation.”
Further Kleyn and Viljoen (15:2011) referred that in another case of Van Erk v
Holmer 1992 2 SA 636 (W) the court decided that due to changing social
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environment, the natural father’s inherent right extended to the child born out
of marriage.
Hence, we can see that where there is no previous decision exists to guide
the court, the South African court could guide them self based on the legal
conviction of the community about the subject matter in taking decision, which
is in accordance with the legal conviction of the community is lawful. In the
previous two referred cases too, the South African court took the decisions
that the wife can be appointed as her husband’s curator with the power to
make decisions about his medical treatment and in another case South
African court decided to extend the natural father’s inherent right to the child
born out of marriage.
Hence we can see that the South African courts time to time guides
themselves with the legal conviction of community.
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Question 2
Explain the concept of “capacity”. In your answer address the different
types of capacity and name 3 cases where capacity exists or does not
exist.
Answer 2
Concept of Capacity has been defined by different legal experts and they are
as follows:
Bhana, Bonthuys & Nortje (75:2010) while defining the capacity states as
follows:
“In order to form the necessary animus contrahendi and to reach consensus
all the parties to the contract must have the necessary contractual capacity.
This means that they must be able to understand the nature of a contract
and the consequences of entering into a contract.”
Bois et al (146:2011) while defining capacity states that:
“The only capacity common to all persons is legal capacity in it narrow sense:
every legal subject, irrespective of his or her personal attributes, has the
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capacity to have rights and duties, although the extent of this capacity and
the particular rights and duties proposed at a certain time by virtue of this
capacity may vary from one person to another. On the other hand, not all
persons have any or all of the other capacities. So, for example, infant
(children below the age of 7 years) and insane persons have no capacity to
perform juristic act or to litigate, while these capacities are subjected to
certain limitations in the case of minors above the age of 7 years.”
Hence capacity of a legal subject could be understood as his/her capacity to
contract, ability to understand nature and consequences of contract. But the
extent of legal capacity may vary from person to person. People having
mental illness, are in intoxication, minors less than 7 years of age does not
have contractual capacity and a person declared prodigal by court have
limited contractual capacity.
Kleyn & Viljoen (109:2011) while defining legal capacity states as:
“Legal capacity is the capacity to be the bearer of rights and duties, in other words
to be legal subject.”
Hence the legal capacity of a legal subject determines his capacity to bear
right and duties.
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In addition Kleyn & Viljoen (109:2011) while defining capacity and its type
states as follows:
“Positive law provides legal subjects with the ability to participate in legal
activities. Such abilities are called ‘capacities’ and we differentiate between
four types of capacities.”
And Plessis & Hees (134:2009) while defining capacity and its type states as
follows:
“…., a legal subject needs certain basic “juridical means”, or capacities as
they are known in legal parlance, in order to participate in (the) “legal reality”.
In private law four such capacities are relevant, namely: legal capacity, the
capacity to act, the capacity to be a party to civil proceedings (locus
standi in iudicio) and accountability. These capacities mean that a legal
subject can participate in private law activities.”
Hence the four types of capacities are as follows:
1. Legal Capacity: It is the legal subject’s capacity to be the bearer of
right and duties to be subject in legal activities.
2. The Capacity to act: That is the capacity of a legal subject to perform
juristic acts such as signing contracts of purchase and sale, drawing up
wills, marriage etc. Different factors such as age and mental health
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determines individual capacity to act. A child less than 7 years of age
does not have capacity to act. Minors between 7 to 18 years have
limited capacity to act.
3. The Capacity to be a part of civil Proceeding: The legal subjects have
a capacity to be part of legal proceeding as plaintiff or defendant.
Minors can appear in the court only with assistance of his parents or
guardian.
4. Accountability: The accountability is the capacity to act lawfully and to
be held liable for unlawful act. Insane people can not be held liable for
unlawful acts.
Name of the cases, where Capacity exists or Does not exists:
Edelstein v Edelstein 1952 3 SA 1 (A): Here it was stated that
the minor, through out his/her minority does not have capacity to
contract.
Dhanabakium v Subramanian 1943 AD 160 167: It was stated
that minor do not have capacity to contract without assistance of
his guardian subjected to certain qualification.
Buttar v Ault 1950 4 SA 229 (T) 239: It was stated that an
unassisted minor don’t have capacity to accept the donation
until he has reached the age of puberty.
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Spangenberg NO and Another v De Waal (15226/2005) [2007]
ZAGPHC 233 (18 October 2007): It was stated that a person
who does not have proper mental capacity can not institute a
matrimonial action without the assistance of the Curator ad
Litem
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Question 3
Ownership is a real right. Discuss what is meant by this statement and
compare the extent and characteristics of such a right with a right which
arises from the conclusion of a contract.
Answer 3
Study material of Association of Arbitration (Introduction to Theory of Law)
states that:
“Rights in property are referred to as real rights. Real rights attach to things
and are enforceable against the whole world. The most extensive of all the
real rights is the right of ownership. Possession, mortgage, pledge,
servitudes and liens are other real rights.”
Bois et al (427:2011) states the following:
“Real right or proprietary rights are those rights that a legal subject has with
regard to a particular item of property. Unlike personal rights, which concern
the relationship between parties to a contract or delict, real rights establish an
almost direct relationship between the holder of the right and the property.
In order to identify the basic characteristic of the real rights, real and personal
rights need to be distinguished clearly. Then the various categories of real
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rights can be identified and the criteria for the recognition of new categories
explained. Only real rights with regard to land are registerable in terms of the
Deeds Registries Act.”
And Bois et al (470:2011) further states that:
“Ownership, in contrast to limited real rights like servitude and mortgage, is
potentially the most extensive private right that a person can have with
regard to property. In principle, ownership entitles the owner to deal with his
or her property as he or she pleases within the limits set by law. The
comprehensive right of ownership embraces not only power to use (ius
utendi), to enjoy the fruits (ius fruendi) and consume property (ius abutendi),
but also the power to possess (ius possidendi), to dispose of (ius
disponendi), to reclaim property from anyone who unlawfully withholds it (ius
vindicandi) and to resist any unlawful invasion of property (ius negandi). The
list is not necessarily complete, for if an owner grants all the list entitlements
to a third party, ownership is suspended only to the extent of the powers
granted and, once the grant is extinguished, ownership automatically
becomes unencumbered again, demonstrating the ‘elasticity’ of ownership
and why ownership is sometimes called a reversionary right’.”
Hence based on thought of different educational experts, we can see that real
right is the right associate with property/things. The right related to ownership
of any property is also related to right associated with things, and hence
ownership is considered as a real right. Ownership establishes direct relation
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between owner and things/property. In case of real right of ownership of land,
the lands are registerable under deeds of registries act. This registration
allows the real right with respect to land/property to be legally secure. Further
right of ownership is associated with things such as land or home and this
right can be enforced against the whole world (against any one).
In addition Kleyn and Viljoen (112:2011) define real rights as follows:
“Real rights are the rights with respect to things, for example ownership.”
Hence we understand by the statement “Ownership is a real right” as the right
rights associated with respect to property/things. Hence the meaning of the
statement “Ownership is a real right” can be understood as ownership of any
thing such as house or car, gives the owner a real right that is his/her right to
use it, sell it, lend it, give it on hire, may dispose it, reclaim from anyone who
unlawfully withhold it. Further ownership is considered to be most extensive
rights among all other real rights. It is also noted that regarding ownership, if
owner of the house grants power of attorney to A for renting his house to
anyone for the duration of 5 years, till he (owner) is outside the country. The
ownership of A has been suspended only for renting the house, as he has
given this power to A, and A can not do any thing else then giving the house
to any one on rent. Further after 5 years, that is expiration of power to rent, A
looses the authority to rent the house and the owner gets the authority to rent
again.
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Plessis & Hees (142:2009) states the following:
“The right of ownership (or ownership, in short) is real right – the only (real) ius in
re propria or ius in re sua (a right to one’s own thing). All other deal rights are
limited real rights or iura ius in re aliena (rights to the things of others). Examples
of such rights are:
the right of a pledge to movable property (in otherwords a pledge);
the right of a bondholder to immovable property;
the right to lessee of fixed property to that property;
a right of way; and
the right(s) of a usufructuary.”
Here we can see that Plessis & Hees also supported the statement and views
stated earlier that the ownership is the most extensive real right among all
other real rights.
Right arises from conclusion of Contract is personal right. Under a
contract one party is obliged to carry or not to carryout particular things for
another party, which gives another party personal right. For example in a
sales contract, buyer has right against the seller, that the seller will deliver the
goods on time to buyer.
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Comparison between Real Right and Personal Right (that is
right arises from Conclusion of Contract):
Real Right Personal Right
Right related to Property/Things. This is concern with the relationship
between parties to contract or Delict.
Real right can be enforced against
large number of people, in case of
ownership; it could be against whole
world too.
Personal right can be enforced again
parties to contract or third party who
is engaged with the contract due to
any reason.
It established direct relationship
between holder of the right and the
property.
It talks about the relationship
between parties.
Real right refers to a right that is
attached to a thing rather than a
person.
A right that is based on one's status
as an individual and does not derive
from property.
Right to use it and/or sell it and/or
lend it and/or give it on hire,
depending upon type of real right.
In case of personal right for example
in case of sales agreement, for buyer:
Right to receive goods as per
agreement. Get warranty or
Guaranty, Servicing from the
suppliers as per Conditions of
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Contract.
For seller: Right to receive payment
as per agreement.
Elasticity: Part of real right could be
passed to other for a certain period
and after that period that rights come
back to the real right holder.
This is not as flexible as real right.
Only real rights with respect to land
are registerable in terms of Deeds of
Registries Act.
No need of registration in terms of
Deeds of Registries Act.
Example: Ownership, Servitude,
Mortgage, right of way, rights of
bondholder to immovable property,
right to lessee of fixed property, use,
pledge, usufruct, habitation and
predial servitude
Example: Contract or Delict
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Question 4
Give the meanings and respective importance of the ratio decidendi and
obiter dictum of a case.
Answer 4
The South African court follows the precedent system that is standing by with
the previous decision taken by other courts. However every word in the
judgment is not binding.
Plessis and Hees (240:2009) states that:
“According to the stare decisis rule, court A:
Is either absolutely obliged to follow the judgment of court B;
Or follows the judgment of court B because A can find no fault with it;
Or allow itself to be persuaded by the arguments of court B”.
Hence we can see that precedent system rules allow court A to consider the
decisions made by court B. The decision could be obligatory or persuasive.
Plessis and Hees (240:2009) while defining what is binding in the judgment of
a court states that:
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“In a judgment a court normally makes finding on two kinds of issues – in other
words, two kinds of questions are answered:
Factual issues or question of fact, and
Legal issues or questions of law”.
A factual issue generally differs from case to case and is unique to a specific
instance. Hence the facts of one case can not be relevant to another case.
But at the same time the legal issues of one case could be relevant to another
case. A fact in a particular case is not binding in another case, but the courts
finding in respect of question of law of once case could be binding in another
case, in case if there is a significant similarity between the aspect of two
cases. This statement is substantiated by the statement of Plessis and Hees
(241:2009) which is:
“A court’s answer to the question of fact in a particular case cannot be
binding on a latter court; its answer to a question (or questions) of law
does, however, have binding force”.
Further it is to be noted that all decided by one court in previous decision is
not binding to the other court. Kleyn and Viljoen (60-61:2011) states that:
“Everything mentioned by a court in its judgment does not create a
precedent”
and
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“Only ratio decidendi creates a precedent”.
And further defines obiter dicta and ratio decidendi as follows:
“Obiter dicta (the singular is obiter dictum) likewise do not create a
precedent. Obiter dicta literally mean ‘remarks in passing’. These are the
judge’s casual remarks concerning the law. They are not directly relevant and
applicable to the case before the court. It is not necessary for the court to
take them into account in order to reach its decision. The judge’s views
on a hypothetical case will, for example, be obiter dictum. Obiter dicta are
not binding, but they can sometimes have persuasive force.”
Hence ratio decidendi (reason for decision) is the legal principle
applied by the court to the material facts to reach the decision which is
binding. Obiter dicta that is remarks in passing made by the court is
not binding but persuasive evidence and as stated above courts
answer to the question of fact in a particular case is not binding but it
has persuasive evidence and is considered Obiter dicta.
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Question 5
Define the concepts of “onus of proof” and “evidentiary burden” and
distinguish between them in the context of civil litigation.
Answer 5
Factoidz website states the followings:
“He who alleges must prove is the foundation of the evidentiary burden.
This must be distinguished from the burden of proof. The burden of proof
never changes; an accused must be found guilty beyond a reasonable
doubt, the plaintiff must prove on a balance of probabilities that the event
occurred according to his/her version. The evidentiary burden shifts from
party to party.”
Hence evidentiary burden is burden on the parties to provide evidence to
prove his case, while burden of proof burden on plaintiff that he/she must
prove on a balance of probability that, what he/she was alleging is right.
In a court case the plaintiff presents evidence to provide that what he is
alleging about defendant is right and he can prove this based on the evidence
he is presenting. At this stage the burden to present evidence (evidentiary
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burden) to prove his allegation lies with the plaintiff. Here it is to be noted that
these evidence presented by the claimant is subjected to cross examined by
the defendant and in case plaintiff failed to present his evidence in support of
his allegation, there will be no case against defendant. Further in case the
evidence presented by the plaintiff is not enough to substantiate his case, the
defendant may not choose to present his case based on insufficient evidence
presented by the plaintiff and in this case he may force the judge to take the
decision, if he wants to dismiss the case or want the defendant to present his
evidence/case.
During cross-examination the burden of evidence (evidentiary burden) to
prove innocence shifts from plaintiff to defendant. At this stage the defendant
cross-examine the witness/evidence presented by the plaintiff and present his
evidence to prove that he/she is innocent and at this stage he/she/defendant
is responsible for presenting evidence to prove him/her innocent. Hence at
this stage the evidentiary burden lies with the defendant.
Plessis and Hees (101:2009) has stated about the onus of proof as follows:
“To be successful in court, a litigant has to prove his case. In a civil
case the nature of the dispute determines on whom the burden (or
onus) of proof rests: the one who avers must prove and the one who
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denies must disprove. It is thus not necessarily always the
plaintiff/applicant who bears the onus.”
and Kleyn & Viljoen (131:2011) stated about the onus of proof as follows:
“The burden of proof (onus) in a criminal trail also differs. In a civil
case the onus is on the party that alleges. This will usually be the
plaintiff. In a criminal case the state initiates the prosecution, thus
the state carries the burden of providing the guilt of the accused.”
Hence the onus of proof can be defined as burden on the party who averts
must prove that other party was at fault. Generally the plaintiff has the
burden/onus of proof that what he alleges is right. In case of criminal case the
burden/onus of proof lies with the state to proof that guilt has been committed
by the accused.
Distinction between Onus of Proof and Evidentiary Burden in the context of civil litigation
Onus of Proof Evidentiary Burden
The burden of proof never changes.
The plaintiff must prove on a balance
of probabilities that the event
occurred according to his/her version
Evidentiary burden shifts from party
to party. In a civil court case, if
plaintiff alleges something about the
defendant. Then the burden to
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Generally the onus is on plaintiff in
civil cases.
In case the plaintiff fails to provide
evidence, he will be said to fail to
discharge his burden/onus of proof.
provide the evidence lies with the
plaintiff, but during cross-examination
and while defending, it is
responsibility of the defendant to
provide the evidence to prove he
(defendant) is innocent.
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PART B: LAW OF CONTRACT
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Question 1
List 3 circumstances which may render a valid contract voidable.
For each of the 3 circumstances above, explain what requirements must
be satisfied before a party will succeed in having the contract voided.
Answer 1
Bois et al (772:2011) while defining the voidable contract stated as follows:
“A voidable contract is one which is valid, that is, it comprises all the
elements necessary to constitute a contract, but which one of the parties
is entitled to rescind because of some cause or defects which existed before
or at the time the contract was concluded. The chief of these causes are as
follows: (1) misrepresentation; (2) duress; (3) undue influence; and (4)
commercial bribery”.
Hence voidable contract is a valid contract and it has got all essential of valid
contract but the consensus obtained is based on improper method that is
defective and hence innocent party is entitled to rescind the contract due to
those defects that is (1) misrepresentation; (2) duress; (3) undue influence;
and (4) commercial bribery.
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Based on the above mentioned explanation the three circumstances which
may render a valid contract voidable:
First Circumstance:
If A gets the consent of B for purchase of B’s car to A, based on undue
influence, which weaken B’s power to resist. In this case B is entitled to
rescind the contract, because of the undue influence made by A, before the
contract concluded.
Requirement that the party should satisfy before succeeding in contract
voidable:
If B wants not to rescind the contract then for him to succeed in making the
contract void he has to do the followings:
1. Give notice to A that since he has taken his consent based on undue
influence before signing the contract, he is not continue with the
contract that is going to sell his car to A, and due to that undue
influence he (B) considers the contract between A and B voidable.
2. However if the A goes to court to force B to sell his car to A bases on
the contract. B needs to prove that A has unduly influenced him/her to
take his consent to sell his/her car to B. B need to provide evidence to
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court to substantiate that he has been unduly influenced by A to sell his
car to A, before contract signing.
Second Circumstance:
If, one party by providing false information about the condition/quality of
goods, sold to another. Until the person who purchased the goods, does not
rescind the contract, the contract is valid. There is no necessity of a court
order to declare the contract is rescinded.
Requirement that the party should satisfy before succeeding in contract
voidable.
If one party (party A) provided false information about his car, that the car is
2005 model, while the car is actually 2000 model (where one of the basis of
sale is that car is of 2005 model). Based on this information the other party
(party B) purchased the car from party A. When party B comes to know that
the car he purchased is of 2000 model, not 2005 model as stated by Party A.
The party B can rescind the contract by sending notice to party A that since
the information (model of the car) based on which the car was sold by party A
and purchased by party B, was a false information, provided by Party A to
Party B to sell the car. The party B does not accept the goods provided and
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claim back his money. If the party A does not returns the money to party B.
The party B can go to court and by providing evidence claim the money from
party A. Parties A and B may agree, that Party A will supply party B another
car of Model 2005.
Third Circumstance:
If A signs a contract to sell his 5 car to B for an amount of R 40,000, by
paying a bribe of R 2000 to agent (C) of B. But just after contract signature B
comes to know that A has paid bribe to his agent C (who was providing
suggestions to B on purchase of the Car from A) for getting this contract. The
contract of sell of car is voidable at the option of B.
Requirement that the party should satisfy before succeeding in contract
voidable:
Just after coming to know about the information of bribe by A to C that is his
agent. B can give notice to A stating that, since he has fetched the contract by
providing bribe to his agent C. Hence B does not accept the contract and
consider the contract as void. If A goes to court, B has to provide evidence to
prove that A has paid bribe to C to get the contract.
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QUESTION 2
One of the requirements for a valid contract is “possibility”. Discuss
this requirement, providing examples of each type of impossibility with
the consequences thereof.
ANSWER 2
Different educational experts has stated by possibility as follows:
Bois et al (753, 754:2011) while defining possibility of performance states as
follows:
“The contract must be possible of performance. If, at the time of
conclusion of the contract, performance is impossible on either side, the
agreement is a nullity and accordingly creates no binding obligations:
impossibilium nulla obligation est.”
.
Similarly Christie and Bradfield (97:2011) also states while referring another
court decision that:
“By the Civil Law a contract is void if at the time of its inception its
performance is impossible: impossibilium nulla obligation.”
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Whereas Bhana, Bonthuys & Nortje (2010:16) while defining possibility states
that:
“At the time of conclusion of the Contract, it must be objectively
possible to perform in terms of the contract. If it is impossible to
carryout the terms of the contract, the contract will be invalid. If the
performances in terms of the contract are possible at the time of the
conclusion of the contract, but subsequently become impossible, the contract
is fully valid, but special rules apply to determine who must perform and who
bears the risk of impossibility.”
Based on above-mentioned view of educational experts, it was understood
that if performance is impossible at the time of conclusion of the contract, the
contract is void/invalid and it does not creates any obligation to the parties of
the contract. Further there is two cases of impossibility one is impossible at
the time of conclusion of contract and another one is impossibility after
contract signature.
Impossibility at the time of conclusion of contract: (Initial
Impossibility):
If the performance of the contract is impossible at the time of making the
contract, the contract is void and the party to the contract is not liable to
perform their duty under the contract. This is also called initial impossibility
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and the party to contract is discharged from their responsibility from the
beginning of the contract. However for a performance to be impossible in this
cases four things need to be satisfied. That is impossibility must be absolute,
must be absolute as opposed to relative, must not be the fault of both party
and the principle must give way to the common contrary intention of the
parties.
If the parties by mistake form a contract and which they realize that it is
impossible to perform, the contract is void since the time it was form. Christie
& Bradfield (2011:340) supporting this statement states that:
“Common mistake will render the contract void ab initio only if it leads the
parties to make a contract which is impossible of performance, such as a sale
of res extincta.”
Impossibility after contract signature:
If the performance of the contract becomes impossible after the contract
signing due to force major (situation/power which can not be controlled by
ordinary individual) or casus fortuitus (inevitable accident) then the parties of
the contract is discharged from their obligation. However if the contract is
becoming impossible due to own fault of the party to the contract, then the
party is not discharged from the liability of the contract. For example: If A has
given his house to B on lease, but due to B’s fault fire broke in to the house
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and it is impossible for B to use the house, B still has to pay the lease amount
to B as the impossibility is due to his fault.
But in case of sales of goods, if seller sells a good and dispatches to buyer’s
location and if the goods get destroyed during the transit, the buyer must
make the payment.
Partial Impossibility: If there is a divisible contract and one part of the
contract becomes impossible. In that case, one can accept part performance
or cancel the contract.
Material Impossibility: This occurs where the obligation is to deliver
property, and the property is destroyed before delivery. If the destruction is
due to vis major the obligation of the debtor is discharged; but not if it is due
to the fault or negligence of debtor. For example:
Another case is that if A has obligation to perform any services for B, however
due to vis major or by death or due to sever illness A was not able to perform,
B is still discharged from his performance due to impossibility of the
performance.
Another case of impossibility is that state prevents the party of contract not to
perform. For example A has to deliver the goods to B who is living in another
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country and B has to pay. However in between the war broke up between
countries of A and B and there is state order from A’s state not to have any
business relation with country of B. In this case the performance of A became
impossible due to state order and hence he is discharged from his
performance.
If the impossibility of performance is due to the risk taken by the debtor, the
debtor is not discharged from performance.
Just becoming the performance difficult or change in commercial
circumstanced does not make performance impossible. And further if the
debtor is once discharged from his performance due to impossibility, it does
not entitle him/her to make a new contract and insist on making performance
on new term.
Legal Impossibility: Those contract which are legally impossible, such as
contract to perform illegal or immoral acts or invalid contract. The parties to
the contract are discharge from liability from the beginning of the contract.
Physical Impossibility: If the contract is physically impossible, for example
constructing a big multistory house by one person in one month. Due to this
physical impossibility of performance, the parties to contract are discharge
from the liability from the beginning of the contract.
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QUESTION 3
One of the essentials of a contract is agreement or consensus.
In the following scenario, describe, in no more than one sentence for
each step, what is happening on the path to consensus.
(a) The employer issues a set of documents seeking a contractor to
build a hotel.
(b) A contractor responds, quoting a price to do the work on certain
terms.
(c) The employer accepts most of the terms, but rejects others.
(d) The contractor withdraws all of the terms to which the employer
objects, but increases the original price.
(e) The employer issues an order to the contractor to commence work,
but quotes the original price.
(f) The contractor moves onto site to start work.
ANSWER 3
(a) Employer requests an offer based on some defined conditions, from
contractor with an intention to create contract.
(b) Contractor submitted a Conditional offer for acceptance to the Employer
with an intention to create contract.
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(c) Employer revised the initial conditions of the request for offer, considering
acceptable terms proposed by contractor and requested offer from the
contractor with an intention to create contract.
(d) The Contractor and Employer comes to same understanding of most of
the essential terms, except price.
(e) By issuing order Employer expresses his agreement and expressed
common understanding of all terms of the revised proposal but rejects the
change in Price (quotes same price).
(f) By moving to work on site the Contractor expresses agreement to the
issued order by his conduct, which leads to the mutual consent (same
mind or understanding) of the parties about change in requirement
with original price (essential or material factors of the agreement).
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QUESTION 4
Explain the concept of “mora” in South African law. Include in your
discussion the meaning, different types, and application of mora.
ANSWER 4
Bhana, Bonthuys & Nortje (215:2010) while defining mora states as follows:
“Mora happens when performance is not made on time.”
Hence the term mora means delay or default in performance, while
performance is possible to be carried out. Under a contract a person is said to
be in mora, when he/she does not perform under stipulated timing in the
contract. However if the duration for the performance is not stated in the
contract, party to the contract must demand the performance to be done in a
reasonable time, and after that reasonable time, if other party fails to perform,
he/she will be said to be in mora.
Where the timing was stipulated in to the contract the mora is named as mora
ex re and where the timing was not stated in to the contract but the
performance was demanded by one party from another party by stipulating
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reasonable time, in this case the party who fails to perform is in mora, and
this mora is named as mora ex persona.
Further Bois et al (858:2011) while defining the forms of breach states:
“The breach may take one of the following forms, each of which will be
discussed in turn: mora debitoris; mora creditoris; positive
malperformance; repudiation; and rendering performance impossible.”
Hence it can be seem that mora debitoris and mora creditoris are the forms of
breach, that is mora is of two types that is mora debitoris and mora creditoris,
which is further divided in to two types that is mora ex re and mora ex
persona as stated before.
Mora Debitoris:
It is defined as the late performance by a debtor, where the performance of
the debtor is due, enforceable under contract and possible for debtor to
execute. For example A has a valid contract with B, where A has to delivery a
car to B, before 31st of January 2012, however by 1st February 2012, A fails to
deliver the car to B, whereas there was nothing which was preventing him to
perform the contract, that is to deliver the car, and B was ready to receive the
car. In this case A is said to be mora Debitoris.
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Mora ex re: In the above-mentioned case, if the date of delivery was
mentioned in the contract and A fails to deliver the car by 1st February 2011,
A is in mora ex re.
Mora ex persona: In the above-mentioned example, if the date of delivery is
not mentioned in the contract, in that case B has to give reasonable notice to
A to deliver the car. If after passing the reasonable time, A fails to deliver the
car, though there was nothing to stop him from performance, A is in mora ex
persona.
However in case where the contract does not state timing but the debtor
knows that the performance needs to be made urgently. For example calling
an ambulance from a hospital in case of emergency, if the hospital does not
sends the ambulance within reasonable time, the hospital is said to be in
mora.
As the mora is an ongoing breach of contract, when the party to contract fails
to perform, after the deadline stipulated in the contract or reasonable duration
notified to the party, the party is in mora and will remain more until he
performs the contract. If during the time when party is in mora, and the
performance becomes impossible, the party will remain in mora and failure to
perform will be considered as breach of contract and debtor may have to
face consequences of breach of contract.
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Since, during mora if one party does not perform, he will be under breach of
contract. Other party has right to Specific Performance or Right to Damage or
Right to Cancel the Contract on basis of mora. The party can elect either
specific performance or cancellation but not both together, yes damages can
be claimed alone or either with specific performance or cancellation, if
applicable. For cancellation the party needs to satisfy few specific
requirements before canceling, such as the court directed specific
performance to the party in mora and again he fails to perform by the time
provided. Other party can cancel the contract. Or if the contract provides
provision of termination under certain circumstances and those circumstances
has been fulfilled, the party can cancel the contract.
Mora Creditoris:
In a contract both parties has right and duty, if the creditors does not provide
co-operation, which is required under the contract, so that debtor can fulfill
his/her obligation, creditor is said to be in mora. For example, the debtor
came to deliver the car (as per agreed specification) to creditor on agreed
date but creditor was not there to receive the car, though there was no
forced circumstances which was making him/her not to be present there to
accept the car, hence creditor is in mora from next day.
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Introduction to the Theory of Law & Law of Contract
Since in this case creditor has obligation to receive on due date, debtor is
performing as per contract, however creditor failed to perform (receive), there
was no case of maior or casus fortuitus and performance was possible.
Hence the creditor is in mora
The day the party becomes mora creditor and if other party is in mora
debitoris, he comes out of mora. Further from the day creditor is in mora,
he/she is responsible for damage or impossibility of performance, the surety
for the debt is released and he/she becomes liable for payment of interest on
the debt.
In this case debtor has an option for specific performance, cancellation of
contract or damage.
The party can elect either specific performance or cancellation but not both
together, yes damages can be claimed alone or either with specific
performance or cancellation, if applicable. For cancellation the party needs to
satisfy few specific requirements before canceling, such as giving reasonable
notice to creditor or if the time is essence or if there is a provision in the
clause to cancel.
In case of mora creditoris too, when there if timing is clearly stated the
creditor does not perform he is in mora ex re and if debtor gave him
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reasonable time and even after this reasonable time, the creditor does not
perform he is in mora ex persona.
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BIBLIOGRAPHY
Anonyms (Time not stated). The presumption of negligence [online]. Website:
Department Water Affairs, Republic of South Africa. Available from:
http://www2.dwaf.gov.za/webapp/Documents/ForestFire/192.168.10.11/
nvffa.nsf/
1974327a06c616da42256dff0046dc16/4cebe8548525b66a42256dfe0074bee
d/$FILE/Presumption%20of%20negligence.ppt#283,1,The presumption of
negligence [Accessed 07 August 2011]
Anonyms (Time not stated). The Evidentiary Burden [online]. Website:
factoidz. Available from: http://factoidz.com/the-evidentiary-burden/
[Accessed10 August 2011]
Anonyms (2011). Introduction to the Theory of Law. South Africa: Association
of Arbitrators, Southern Africa
Bhana, Bonthuys and Nortje (2010). Business Transactions Law. 2nd
Impression. South Africa: Juta Law
Bois, Bradfield, Himonga, Hutchison, Lehmann, Roux, Paleker, Pope, Merwe
and Visser (2011). Wille’s Principles of South African Law. 9 th Edition. South
Africa: Juta Law
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Introduction to the Theory of Law & Law of Contract
Christie & Bradfield (2011). The Law of Contract in South Africa. 6 th Edition.
South Africa: Lexis Nexis
Kleyn and Viljoen (2011). Beginner’s Guide for Law Students. 4 th Edition.
South Africa: Juta Law
Plessis and Hees (2009). An Introduction to Law. 3rd Edition. South Africa:
Juta Law
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