Contract Law and Community Property Quiz

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Questions and Answers

Which action is prohibited for a spouse married in community of property?

Buy property under an installment sale agreement

Sell any shares or mortgage bonds forming part of the joint estate (correct)

Allow a licensee to take occupation of immovable property

Pledge movable assets belonging to the joint estate

What must be considered when determining the contractual capacity of spouses married under a foreign legal system?

The marital agreement they have entered into

The number of properties owned by the couple

The country's marriage laws where the spouse resides (correct)

The age of the spouses at the time of marriage

In which situation must immovable property be registered in the names of both spouses?

When the spouses are partners in a business (correct)

When the property is acquired by a spouse married out of community

When one spouse is a foreign national

When the property purchase is financed through a bank loan

What is true about the registration of property acquired by a spouse married out of community of property?

It can be registered in the name of the spouse who acquired it (D) Signup and view all the answers

What is required for a contract to be valid among partners in a close corporation?

It must be specifically authorized by the other partners (D) Signup and view all the answers

Which statement best describes a 'condition' in a contract?

A condition ties the contract's operations to an uncertain future event (A) Signup and view all the answers

Which of the following actions is generally permissible for a spouse under South African law?

Enter into an installment sale agreement for property (C) Signup and view all the answers

What occurs to the ownership of immovable property acquired in community of property?

It is held under joint title unless stated otherwise (A) Signup and view all the answers

What is the maximum time frame during which major structural defects must be reported to the home builder?

5 years (D) Signup and view all the answers

What must a seller do if they are aware of structural defects in a home?

Disclose the defects to the buyer before selling (A) Signup and view all the answers

What constitutes a 'major structural defect' according to the warranty?

Defects affecting structural integrity requiring significant repair (D) Signup and view all the answers

Which of the following warranties lasts for a minimum of 3 months after accepting the home?

Warranty for design deviations (D) Signup and view all the answers

Who is responsible for the costs of repairs related to major structural defects?

The home builder (C) Signup and view all the answers

Which of the following statements is false about the home builder's warranty?

It can be ignored if the seller covers the defects. (A) Signup and view all the answers

What happens if a home builder fails to rectify a major structural defect within the warranty period?

The housing consumer can seek legal action. (C) Signup and view all the answers

What is the significance of the National Home Builders' Technical Requirements?

They establish standards for construction adherence. (B) Signup and view all the answers

What is the primary duty of an estate agent regarding material defects in a property?

To disclose any known material defects to potential buyers. (C) Signup and view all the answers

When should an estate agent refrain from making statements about a property's quality?

Unless he is absolutely sure of the accuracy of his statements. (A) Signup and view all the answers

What does the voetstoots clause generally imply for buyers?

They must accept the property in its current condition without recourse. (C) Signup and view all the answers

What could happen if an estate agent makes a misrepresentation?

The buyer can set aside the contract regardless of the source of misrepresentation. (A) Signup and view all the answers

In the case of property damage or destruction before transfer, who typically bears the loss?

The responsibility may depend on the terms agreed upon by the parties. (A) Signup and view all the answers

What is the minimum warranty period for roof leak repairs from a home builder?

12 months (D) Signup and view all the answers

What should an estate agent do if they notice material defects in a property?

Ask the seller about repairs and disclose to potential buyers (C) Signup and view all the answers

If a house is re-sold during the warranty period, what happens to the warranty?

It is automatically transferred to the new owner (B) Signup and view all the answers

What must be included in a sale contract if a defect has not yet been repaired?

The nature of the defect and liability for repairs (C) Signup and view all the answers

What is required if a defect has been repaired but the seller is unsure of its permanence?

Full disclosure must be made to every prospective purchaser (D) Signup and view all the answers

What must an estate agent convey to prospective purchasers regarding a property?

Material facts that should be known to them (C) Signup and view all the answers

When must a leak be notified to the home builder under warranty?

Within the warranty period set out in the agreement (B) Signup and view all the answers

Which of the following statements about seller liability is true?

Sellers are not liable for defects disclosed in the contract (D) Signup and view all the answers

Which situation allows a purchaser to waive their cooling-off right?

The purchaser is an individual. (A), The land was purchased at a private sale. (B), The property price is less than R250 000. (D) Signup and view all the answers

What is the minimum time frame that a purchaser has to exercise their cooling-off right after signing?

Five days (D) Signup and view all the answers

What must a written notice include for a cooling-off right to be effective?

The identification of the offer or sale agreement being revoked (A) Signup and view all the answers

What happens to the money received from a purchaser if they exercise their cooling-off right?

It must be refunded within ten days. (D) Signup and view all the answers

Which of these is NOT a condition that allows a purchaser to be entitled to a cooling-off period?

The seller is a natural person. (C) Signup and view all the answers

What is the impact on an estate agent's commission if a buyer exercises their cooling-off right?

The estate agent is not entitled to any commission. (A) Signup and view all the answers

Which day is excluded when calculating the cooling-off period?

The day the offer was made or agreement concluded (B) Signup and view all the answers

What type of purchaser is NOT eligible for a cooling-off period?

A close corporation (B), A partnership (C), A trust (D) Signup and view all the answers

What form of payment is generally acceptable for rent, except in rural property leases?

Cash or cheque (A) Signup and view all the answers

What happens if a lessee pays the rent by cheque but the cheque bounces?

The lessee has not discharged their obligation. (B) Signup and view all the answers

Where must rent be paid if no agreement is reached on the payment location?

At the landlord's business or residence (B) Signup and view all the answers

What protective measure does the Rental Housing Act provide for tenants?

Protection against exploitative rentals (D) Signup and view all the answers

What is the lessor's preferential right over the lessee's movables called?

Tacit hypothec (A) Signup and view all the answers

What actions is a landlord prohibited from taking without a Court order to recover unpaid rent?

Changing door locks or disconnecting electricity (A) Signup and view all the answers

How is rent often expressed in lease agreements aside from a definite sum?

As a formula based on premises size (A) Signup and view all the answers

What must the landlord do to recover unpaid rental according to the content provided?

Obtain a Court order or tribunal ruling (B) Signup and view all the answers

Study Notes

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.

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Description

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.