Contract Law and Community Property Quiz

General Principles of Contract

• Parties must reach consensus on all terms of their agreement.
• Parties must have legal capacity.
• Contract must not be entered into for an unlawful purpose.
• At the time of agreement, it must be possible for both parties to fulfill obligations.

Alienation of Land Act 68 of 1981

• Land sale contracts must be in writing and signed by the parties, or their agents with written authority.
• Leases of land do not need to be in writing, although it's good practice.

Estate Agent's Duties

• In the absence of an agreement, an estate agent is not required to draft the contract to earn commission.
• Typically, an estate agent will complete a standard preprinted contract form.

Offers and Acceptance

• A valid contract requires agreement on all aspects.
• Preliminary discussions don't constitute a contract.
• Incomplete agreement doesn't form a contract. 
• An offer must be certain.
• Acceptance of an offer must be unconditional and communicated.

Lapse of an Offer

• An offer lapses with the passage of time.
• An offer lapses if not accepted within a reasonable time.
• A period for acceptance must be specified.

Revocation of an Offer

• An offeror can revoke their offer before it's accepted.
• Revocation must be communicated to the offeree.
• If an offer is irrevocable, that must be stated in the offer.

Rejection of an Offer

• Rejection terminates an offer immediately.
• An inquiry about modifying terms is not rejection.
• A counter-offer is a rejection of the original offer.

Death of the Offeror/Offeree

• An offer terminates upon the death of either party before acceptance.

Contract formation by post/fax/telegram

• An offer can be concluded through post, fax or telegram.
• The contract is concluded when notification of the acceptance is received by the offeror.

Completion of Standard Documents

• Ensure all spaces are filled or clauses deleted.
• Use clear, plain language in completing/amending clauses.
• Initial all amendments by both parties.

Parties to a Contract

• Minors
• Unmarried males and females
• Married males and females
• Companies
• Close corporations
• Partnerships
• Trusts

Contractual Capacity

• Minors under 7 cannot contract.
• Minors aged 7+ can contract with guardian support.
• Natural guardian (for minors) can't mortgage property unless authorized.

Immovable property

• A contract for the sale/lease is valid only if the immovable property is recorded in the deeds office, otherwise it is void.
• Any party to the agreement may request details from the registering agent and/or an existing bondholder

Contracts concluded by Companies/Corporations/Partnerships

• A company is bound by contracts made by its authorised representative.
• Each partner has general authority to act in the normal course of business relating to the partnership

Partnerships

• All members need to be listed in agreement ,also indicating they are acting jointly
• Must be signed by all parters of a firm or a partner with authority

Trusts

• A trust is not a person and can't enter into contract.

• Only trustees with authority from trust document are capable of contracts.

Consideration

• The parties must have a proper value for the contract. Both parties receiving value.
• Consideration if the price is not what the property is actually worth, this doesn't make it a valid contract unless the parties agree to that specific price.

Property Transactions concluded by Aliens

• Aliens in the RSA require a valid permit to buy or rent property.
• Compliance with exchange control regulations is required for non-SA citizens.

Suspensive and Resolutive Conditions

• A condition can suspend or resolve the contract dependant on a future event.
• Time period of condition fulfillment is stated (or otherwise is reasonable).
• Circumstances may affect if condition is fulfilled.
• Parties can waive or decline a condition if it benefits one party specifically.
• Deliberate action to prevent fulfillment of a condition treats the condition as fulfilled.

Options and Rights of Pre-emption

• An option is an offer with a defined period of irrevocability.
• A right of first refusal gives priority to purchase when the owner sells in the future
• Must be in writing

Copies of Contracts

• Estate agents must provide copies to all parties.

Purchase and Sale of Immovable Property, Introduction

• Agreements of sale are regulated by the Alienation of Land Act.
• The written agreement must include details of parties, property and purchase price.

Purchase and Sale of Immovable Property: Parties and their Addresses

• Must be ascertainable, no particular form required.
• Disclosure of ownership essential if the seller is not the legally recognized owner.
• Parties must have the capacity to contract

Description of the Property Sold

• Description must clearly identify the property.
• Title deed or street addresses are used in identifying the property.
• Improvements (like structures or trees) are considered part of the property.

Purchase Price

• Agreed price is necessary.
• Price can be fixed or ascertainable.

Payment of Purchase Price

• Often a deposit is required upfront, and balance is paid on transfer
• Payment is usually made in cash or by a guaranteed method.

Insurance of the Property

• It is the purchaser's responsibility to insure the property.

Occupation and Occupational Interest

• Date of occupation is usually specified in the contract.
• Should be clearly stated or mutually agreed upon in terms.
• A seller is responsible for the property's defects occurring before the sale is confirmed.

Defects

• Common law holds the seller responsible for latent defects present at time of sale.
• Waivers of liability for defects (voetstoots clauses) are common.

Home Builder's Warranties

• Acts ensure that home builders are responsible for major structural defects.
• The act protects buyers by obliging the builder to ensure the structural integrity of the property.

Cooling-Off Rights

• Purchasers have a specific time period (usually 5 days) to back-out.
• Certain transactions are excluded from this right.

Auction Sales

• Terms can be stated in advance, and these are binding on everyone.
• The reserve price can be excluded

Electricity Compliance

• Electrical installations must comply with the regulations.
• The responsibility for the certificate of compliance can be a point of contention between buyers and sellers.

Instalment Sale of Immovable Property

• Sale is done in installments, often with a period exceeding one year.
• Purchase price and terms are stated upfront, but full transfer is delayed.
• Financial institutions are usually involved but not necessarily required (trust agreement/loan).

Lease of Immovable Property

• Lease is a temporary agreement granting the use and enjoyment of property.
• Property may be used commercially and residentially.
• The lease terms are governed by common-law, Rental Housing Act (when applicable) and regulations.

Lease of Immovable Property: Parties and their Addresses

• The parties to a lease must be easily identifiable and addressable.

Lease of Immovable Property: Description of the Dwelling

• The address or detailed description of the rental property must be included.

Lease of Immovable Property: Rental and Deposit

• The rent is usually paid monthly in advance.
• The tenant can pay a deposit to guarantee payment.
• The deposit is not the rent, landlord is not entitled to this and should be returned on due date.
• Costs are divided fairly between parties in respect of the lease.

Lease of Immovable Property: Rights and Duties

• A landlord is responsible for maintaining the property.
• The tenant is obliged to use it reasonably.

Lessee's Use and Duties

• The general rule for lessee use is a reasonable manner.
• Specific restrictions may be present in the documents.
• Lessees can't make changes or modifications to the property.

Lease of Immovable Property: Defects and Maintenance

• Landlords are obligated to maintain premises in good condition.
• Responsibility varies depending upon the lease agreement

Inspection of the Property During Lease

• Inspections need to be conducted within a reasonable manner.
• A notice is vital to conduct an inspection.

Lease of Immovable Property: Occupation & Cession

• Property access and keys are often handled.
• Subletting is not prohibited unless agreement states otherwise.

Lease of Immovable Property: Conclusion, Stamp Duty and Receipts

• Lease agreements are valid even without being written. 
• Stamp Duty is payable, calculable by the amount of rent paid over the lease.

Finance and Security

• The various forms of security include surety, pledge, notarial bonds and mortgage bonds.
• These details must be in writing to a formal contract and a full clause.

Test your knowledge on the principles of contract law and community property in South Africa. This quiz covers the contractual capacities of spouses, property ownership rights, and the implications of structural defects in real estate transactions. Challenge yourself by answering questions related to legal requirements and permissible actions for spouses under various legal systems.