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Questions and Answers
Which of the following best describes 'animus contrahendi' in the context of contracts?
Which of the following best describes 'animus contrahendi' in the context of contracts?
- The location where the contract is signed.
- The preliminary negotiations before an offer is made.
- The physical exchange of goods or services.
- The intention to create legally binding obligations. (correct)
An offer can be validly accepted by someone other than the person to whom it was made.
An offer can be validly accepted by someone other than the person to whom it was made.
False (B)
Briefly explain what is meant by the 'lapse of offer'.
Briefly explain what is meant by the 'lapse of offer'.
Termination of offer due to various reasons, such as expiry of time.
For acceptance to be valid, it must ______ to the terms of the offer.
For acceptance to be valid, it must ______ to the terms of the offer.
Match the acceptance requirements with their descriptions:
Match the acceptance requirements with their descriptions:
In general, can silence be a valid form of acceptance?
In general, can silence be a valid form of acceptance?
Freedom to contract always implies a duty to contract.
Freedom to contract always implies a duty to contract.
Why is it important to determine the time and place of a contract's formation?
Why is it important to determine the time and place of a contract's formation?
The theory that stipulates a contract is concluded when and where the acceptance is sent out is known as the ______ theory.
The theory that stipulates a contract is concluded when and where the acceptance is sent out is known as the ______ theory.
Match the theory to its meaning
Match the theory to its meaning
In the case of Cape Explosives Works Ltd v SA Oil and Fat Industries, which theory was applicable in determining when the contract was formed?
In the case of Cape Explosives Works Ltd v SA Oil and Fat Industries, which theory was applicable in determining when the contract was formed?
In the case of A to Z Bazaars v Minister of Agriculture the expedition theory was applied.
In the case of A to Z Bazaars v Minister of Agriculture the expedition theory was applied.
What initial action does the holder of an option have when there is a breach of the option?
What initial action does the holder of an option have when there is a breach of the option?
If a party breaches an option, the holder of the option has the choice to uphold the contract and claim damages, or alternatively, they can ______ the contract.
If a party breaches an option, the holder of the option has the choice to uphold the contract and claim damages, or alternatively, they can ______ the contract.
Match the following
Match the following
Which of the following describes a pre-emption agreement?
Which of the following describes a pre-emption agreement?
The requirements for options and pre-emption contracts are the same as general contract requirements.
The requirements for options and pre-emption contracts are the same as general contract requirements.
According to the content, what constitutes a mistake in contract law?
According to the content, what constitutes a mistake in contract law?
A mistake that causes a party to enter into a contract which they would not have entered otherwise is called a ______ mistake.
A mistake that causes a party to enter into a contract which they would not have entered otherwise is called a ______ mistake.
Match the mistake type to its correct description
Match the mistake type to its correct description
What is the effect of a non-causal mistake on a contract?
What is the effect of a non-causal mistake on a contract?
In the event of a causal mistake, the contract is always valid.
In the event of a causal mistake, the contract is always valid.
According to the content, what is the result of a mistake in motive?
According to the content, what is the result of a mistake in motive?
If both parties have the same essential mistake, this is known as a ______ mistake.
If both parties have the same essential mistake, this is known as a ______ mistake.
Match each description with its corresponding type of essential mistake
Match each description with its corresponding type of essential mistake
What are the Week 3 content topics?
What are the Week 3 content topics?
An option allows the holder to demand the other party to enter into a second contract.
An option allows the holder to demand the other party to enter into a second contract.
In the case of contract of sale of land, when does the contract conclude?
In the case of contract of sale of land, when does the contract conclude?
In case of breach of an option, the holder has a right to ______ or cancel a contract.
In case of breach of an option, the holder has a right to ______ or cancel a contract.
Match the following definitions of a mistake
Match the following definitions of a mistake
What is the relationship between Justus error and the reasonable reliance theory?
What is the relationship between Justus error and the reasonable reliance theory?
The Justus says that when a mistaken party wants to bound it is Justus error.
The Justus says that when a mistaken party wants to bound it is Justus error.
In the absence of mistake as a consensus, what other points can influence the consensus between contractual parties?
In the absence of mistake as a consensus, what other points can influence the consensus between contractual parties?
When concluding contracts via mail, sending of the mail with acceptance concludes the contract thanks to ______.
When concluding contracts via mail, sending of the mail with acceptance concludes the contract thanks to ______.
Match
Match
How does the court combine 2 approaches, the Justus error and reasonable reality theory?
How does the court combine 2 approaches, the Justus error and reasonable reality theory?
Option is a right to first refusal.
Option is a right to first refusal.
What is pre emption about?
What is pre emption about?
If it's a material and essential mistake, then the contract is
If it's a material and essential mistake, then the contract is
Condition means
Condition means
Flashcards
Acceptance
Acceptance
An affirmative reply by the offeree with the intention to create legally binding obligations, on the terms set out in the offer.
Animus contrahendi
Animus contrahendi
The intention to create legally binding obligations.
Corresponding to the Offer
Corresponding to the Offer
The acceptance must correspond to the terms of the offer, without any changes or conditions.
Acceptance by Whom?
Acceptance by Whom?
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Ways to Accept
Ways to Accept
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Lapse of Offer
Lapse of Offer
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Pacta de contrahendi
Pacta de contrahendi
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Option Contract
Option Contract
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Breach of an Option
Breach of an Option
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Pre-emption agreement
Pre-emption agreement
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Mistake
Mistake
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Causal Mistakes
Causal Mistakes
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Non-causal Mistakes
Non-causal Mistakes
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Mistakes of Motive
Mistakes of Motive
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Essential Mistakes
Essential Mistakes
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Common Essential Mistake
Common Essential Mistake
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Unilateral mistake
Unilateral mistake
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Mutual Mistake
Mutual Mistake
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Information theory
Information theory
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Study Notes
Acceptance Defined
- The offeree provides an affirmative reply
- It has the intention to create legally binding obligations
- It is on the terms set out in the offer
Requirements for Acceptance
- Acceptance must be made with animus contrahendi, meaning the intention to contract
- It must correspond to the offer's terms
- The acceptance must be communicated to the offerer
- Acceptance must be made by the person to whom the offer was made
- It needs to be expressed in the prescribed manner
- It must occur before the offer terminates
Acceptance by Silence
- Acceptance is generally oral or written, but can be inferred from conduct
- The offeror cannot force the offeree to act positively
- A general rule states there is no acceptance by silence except in cases of legal duty or a special relationship
Common Law Modified
- The Electronic Communications and Transactions Act 25/2002 is noted
- The National Credit Act 34/2005 is referenced
- The Consumer Protection Act 68/2008 is mentioned
Duty to Contract
- Freedom to contract includes the freedom NOT to contract
- Anti-discrimination legislation, such as the Promotion of Equality and Prevention of Unfair Discrimination Act 4, might create a duty to contract if the refusal is discriminatory
Time and Place of a Contract
- Knowing the time and place is important
Theories on When and Where a Contract is Formed
- Declaration theory
- Information theory
- Expedition theory
- Reception theory
Case Law on Time and Place
- Cape Explosives Works Ltd v SA Oil and Fat Industries 1921 CPD involved a determination of jurisdiction and applied the expedition theory
- A to Z Bazaars v Minister of Agriculture 1975 recognized the use of the expedition theory but did not apply it because personal delivery of acceptance was required
Pacta de Contrahendi
- A preliminary agreement to envisage the conclusion of a contract in the future
- The main contract is envisaged
- Pactum de contrahendo involves two contracts
Options
- Options have a definition, effect, requirements, duration, and legal implications
Breach of an Option
- The holder of the option has a choice to uphold the contract by accepting the main offer and claiming damages
- Alternatively, they can cancel the contract, accept the breach, and claim damages
Pre-emption Agreements
- Pre-emption agreements involve definition, requirements, and legal effect
- There must be certainty or be ascertainable, formalities, and consider the precedent set in Hirschowitz v Moolman
Mistakes
- An error in comprehending facts, the meaning of words, or the law
- Such errors cause one party or both to enter a contract without understanding the obligations or results
- Such a mistake can entitle one or both parties to a rescission (cancellation) of the contract.
Classifications of Mistakes
- Causal vs. non-causal mistakes
- Essential vs. motive mistakes
- Common, unilateral, and mutual mistakes
Causal vs Non-Causal Mistakes
- Whether the mistake affected the party's decision to enter the contract
- Causal mistakes affect the decision to enter the contract or the terms
- Non-causal mistakes don't change the decision to contract
Essential vs Mistakes of Motive
- Mistakes of motive only affect the reasons for a party's decision but don't negate animus contrahendi
- Essential mistakes relate to the parties, terms, or binding nature of the contract
Types of Errors
- Error in negotio: Mistake of the nature/terms - Essential mistake
- Error in persona: Mistake of the identity of the parties - Essential mistake
- Error in nomine: Mistake of the name of the party - Non-causal mistake
- Error in corpore: Mistake of the thing which is the object of performance - Essential mistake
- Error in qualitate: Mistake of the qualities of the object - Mistake in motive
- Error in substantia: Mistake of the material of which the object is made - Mistake in motive
Types of Essential Mistakes
- Common: Both parties make the same mistake, which is causal for both
- Unilateral: One party makes a causal mistake
- Mutual: Both parties make a causal mistake, but the mistake is different
Effect of Mistakes
- Has no effect when mistakes are non-causal as they are irrelevant
- Mistakes in motive also have no effect
- Contract is invalid for essential mistake
Relationship between Justus Error and Reasonable Reliance Theories
- Both theories result in an invalid contract if the non-mistaken party knew about the mistake, should have reasonably known, or caused the mistake
- Justus error applies when the mistaken party won't be bound
- Reasonable reliance theory applies when the non-mistaken party can enforce the contract
Reconciliation
- Courts generally use reasonable reliance unless there is third-party interference, in which case they use Justus error
- However, in Slipknot Investments, the court said reasonable reliance should still be used if the third party wouldn't affect the non-mistaken party's reasonable belief that compliance was met
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