Contract Law Chapter 9: Parties to Contracts

What is the effect of collective liability when performance is indivisible?

It arises when performance is indivisible.

Why is it important to interpret contracts with multiple parties as containing independent contracts?

To avoid confusing them with situations where parties share rights and duties.

What is the principle of privity of contract?

The principle that contracts primarily affect the immediate parties involved.

How can third parties become involved in a contract?

Through acting as agents, assisting in discharging obligations, or substituting into the contract. Signup and view all the answers

What is the significance of the intention of parties in determining collective liability?

It determines whether collective liability arises. Signup and view all the answers

What is the result when multiple parties are co-creditors?

They are collectively entitled to performance, but no individual creditor can claim entire performance from the debtor. Signup and view all the answers

How many parties are required for a contract in South African law?

At least two Signup and view all the answers

Can a person contract with themselves?

Only in different capacities Signup and view all the answers

What is a potential issue with self-contracting in dual roles?

Conflict of interests and abuse Signup and view all the answers

How many parties can be involved in a contract?

More than two Signup and view all the answers

What determines the share of liability or entitlement for co-debtors or co-creditors?

Parties' intentions, contract nature, and performance divisibility Signup and view all the answers

How do parties' roles change in a sales contract?

Buyer is debtor for paying price and creditor for receiving item Signup and view all the answers

What is a fundamental principle of contracts?

Contracts create rights and duties only for the parties involved. Signup and view all the answers

What is an exception to the rule that contracts only create rights and duties for the parties involved?

Creating rights for third parties with the agreement of both parties. Signup and view all the answers

What can deliberate interference by a third party in a contractual relationship constitute?

A delict. Signup and view all the answers

What is the doctrine of notice related to in contract law?

Cases where a third party acquires property in bad faith, making them liable to discharge contractual obligations. Signup and view all the answers

What is the role of an agent in contract negotiations?

To act on behalf of the principal in negotiations. Signup and view all the answers

What grants written authority for an agent to act on behalf of the principal?

A power of attorney. Signup and view all the answers

In what scenario can a principal, P, be held bound despite an agent, A, lacking actual authority?

When A had ostensible or apparent authority to represent P, which the principal created by words or conduct. Signup and view all the answers

What is the consequence for an agent, A, when acting within their authority with a third party, 3p?

A incurs no liability to 3p. Signup and view all the answers

What type of liability does an agent, A, face when making a fraudulent or negligent misrepresentation of their authority?

Delictual liability, with damages based on the third party's negative interest. Signup and view all the answers

What type of contract often includes provisions benefiting individuals not party to it?

A contract for the benefit of a third party, also known as stipulatio alteri. Signup and view all the answers

What is the result when an agent, A, exceeds their authority in a contract with a third party, 3p?

A may be liable to compensate 3p for any loss resulting from the contract failure. Signup and view all the answers

What is the significance of the Con Court's holding in Makate v Vodacom (Pty) Ltd?

The court held that misrepresentation creating an appearance of authority is sufficient to bind the principal, and nothing more is required. Signup and view all the answers

What is the key difference between mandate and true agency?

True agency involves both mandate and the power for the agent to represent the principal in legal matters. Signup and view all the answers

What is the relationship between the principal and the agent governed by?

Common-law principles of contract of mandate, supplemented by agreed-upon terms by parties. Signup and view all the answers

How is the relationship between the principal and the third party determined?

By the agent's state of mind during negotiation. Signup and view all the answers

What happens if the agent exceeds their authority when contracting with a third party?

The principal is not bound by the contract, but may be liable for benefits. Signup and view all the answers

What is the doctrine of undisclosed principal?

The agent is personally liable, but the principal can demand performance if not prejudicial to the third party. Signup and view all the answers

What is the significance of ostensible authority in agency relationships?

The principal is bound by the contract if the agent had ostensible authority, created by the principal's words or conduct. Signup and view all the answers