Podcast
Questions and Answers
What must a creditor do to place a debtor in mora when no time for performance is stipulated in the contract?
What must a creditor do to place a debtor in mora when no time for performance is stipulated in the contract?
A debtor automatically falls into mora when they receive a letter of demand from the creditor.
A debtor automatically falls into mora when they receive a letter of demand from the creditor.
False
What is perpetuation of obligation in the context of mora debitoris?
What is perpetuation of obligation in the context of mora debitoris?
It is the continuation of the obligation due to the debtor's failure to perform on time.
A debtor falls into mora when a creditor sends a demand and the _______ period passes.
A debtor falls into mora when a creditor sends a demand and the _______ period passes.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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What are implied terms in a contract?
What are implied terms in a contract?
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Ex lege implied terms are those that are imported into a contract by custom or trade usage.
Ex lege implied terms are those that are imported into a contract by custom or trade usage.
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What must be considered when determining implied terms in a contract?
What must be considered when determining implied terms in a contract?
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In contracts of lease, it is not necessary for a tenant to stipulate the duties of the __________, as the law provides what their obligations are.
In contracts of lease, it is not necessary for a tenant to stipulate the duties of the __________, as the law provides what their obligations are.
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Match the following concepts to their descriptions:
Match the following concepts to their descriptions:
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What happens if A delays taking delivery of a house after B has completed the building and an earthquake destroys it?
What happens if A delays taking delivery of a house after B has completed the building and an earthquake destroys it?
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Positive malperformance occurs only when the debtor performs without fault.
Positive malperformance occurs only when the debtor performs without fault.
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What can an innocent party do in the case of negative malperformance?
What can an innocent party do in the case of negative malperformance?
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What can the holder of a right of first refusal do upon a unilateral declaration?
What can the holder of a right of first refusal do upon a unilateral declaration?
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If delivery is _____ and defective, it is considered both positive malperformance and mora.
If delivery is _____ and defective, it is considered both positive malperformance and mora.
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What are naturalia in the context of a contract?
What are naturalia in the context of a contract?
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A party can claim both specific performance and cancellation as remedies at the same time.
A party can claim both specific performance and cancellation as remedies at the same time.
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What is one of the means of enforcing an order of specific performance in cases of non-compliance?
What is one of the means of enforcing an order of specific performance in cases of non-compliance?
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Which of the following is NOT a remedy available to the aggrieved party?
Which of the following is NOT a remedy available to the aggrieved party?
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Incidentalia refers to the essential terms of a contract.
Incidentalia refers to the essential terms of a contract.
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What is the primary basis for incidentalia in a contract?
What is the primary basis for incidentalia in a contract?
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A party may claim specific performance and _____ as an alternative.
A party may claim specific performance and _____ as an alternative.
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Fault is always required for positive malperformance.
Fault is always required for positive malperformance.
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The ____ rule states that a party who signs a written contract is bound by its terms regardless of whether they have read or understood them.
The ____ rule states that a party who signs a written contract is bound by its terms regardless of whether they have read or understood them.
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What can the aggrieved party do if the other party's performance is defective?
What can the aggrieved party do if the other party's performance is defective?
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Match the type of remedy with its description:
Match the type of remedy with its description:
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What is required if a plaintiff wishes to cancel due to non-fulfillment of specific performance?
What is required if a plaintiff wishes to cancel due to non-fulfillment of specific performance?
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Which of the following can be true for new naturalia recognition by courts?
Which of the following can be true for new naturalia recognition by courts?
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Surrogate damages are recognized in contract law according to ISEP.
Surrogate damages are recognized in contract law according to ISEP.
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Express terms can only be oral and cannot be written.
Express terms can only be oral and cannot be written.
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What type of damages must the aggrieved party claim if surrogate damages do not exist?
What type of damages must the aggrieved party claim if surrogate damages do not exist?
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What does the caveat subscriptor rule protect?
What does the caveat subscriptor rule protect?
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Which of the following must be included in section 49 requirements?
Which of the following must be included in section 49 requirements?
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A term that excludes liability for gross negligence is always permissible in a contract.
A term that excludes liability for gross negligence is always permissible in a contract.
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Who bears the burden of proof to show that a contract term is fair?
Who bears the burden of proof to show that a contract term is fair?
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The total contract price agreed upon by Software Deluxe and Client was _______.
The total contract price agreed upon by Software Deluxe and Client was _______.
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What was the total estimated cost to Software Deluxe for completing the contract?
What was the total estimated cost to Software Deluxe for completing the contract?
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The freelance software expert intends to claim R100 000 in loss of profit from the Client.
The freelance software expert intends to claim R100 000 in loss of profit from the Client.
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What type of equipment was Software Deluxe supposed to supply to the Client?
What type of equipment was Software Deluxe supposed to supply to the Client?
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Study Notes
Law of Contract
- Notes are from textbook and class lectures
- Flashcards are provided at the end of each section
- Semester 2 cases are covered
- Practice questions on damages are included
Breach of Contract
- Mora Debitoris: A debtor's delay in performance
- Mora Creditoris: A creditor's delay in performance
- Positive Malperformance: Performing defectively
- Repudiation: Clear intention not to perform the contract
- Prevention of Performance: Preventing the other party's performance
Mora Debitoris
- The debt must be due and enforceable
- A fixed time for performance must be stipulated
- Failure to perform by the agreed time without lawful excuse is required
- The performance must still be possible
- Parties expressly or impliedly stipulate a time for performance
- Debtor is automatically placed in mora (ex re), without creditor intervention
Mora Ex Persona
- No stipulated time for performance
- Creditor must place debtor in mora
- This is done through a letter of demand
- Creditor does not need to allow a reasonable time period before demanding performance
Mora Creditoris
- Creditor's obligation to cooperate is necessary
- Creditor must take whatever action towards performance is possible without cooperation
- Creditor must accept the performance tendered
- No fault required unless caused by vis maior or casus fortuitus
Perpetuation of Obligation
- A consequence that arises due to a breach of mora
- Supervening impossibility of performance
- BUT if the debtor was in mora, their obligation to perform is not discharged unless they demonstrate that performance would have been impossible even if made timely
- If this is not demonstrated, the debtor is liable, as stipulated in the contract
Rescission
- The creditor has an election to cancel or affirm the contract
- Depending on the wording of the cancellation clause
- Creditor may be entitled to rescind even if the breach is not material
- In absence of a cancellation clause, creditor may cancel if breach is sufficiently serious
- Contract will be rescinded; parties will return performance, and claim restitution
Time is of the Essence
- Parties have specifically agreed it is (express lex commissoria)
- Parties have tacitly agreed (tacit cancellation clause)
- Creditor has made time of the essence by sending the debtor a notice of rescission
- Time is almost always of the essence in mercantile contracts
- Limited period of marketability or perishables
Notice of Rescission
- Creditor can make time of essence with a notice to rescind
- Notice is given to the debtor
- Reasonable time to comply and must be clear and unambiguous
Notice of Rescission vs. Demand for Performance
- Notice of rescission informs the debtor of the creditor's option to rescind
- A demand for performance asks the debtor to perform
- Notice of rescission and demand for performance can be combined
Positive Malperformance
- Refers to the content of the performance
- Occurs when the debtor performs incompletely or defectively
- Can include positive (performance made wrongly) and negative (failure to refrain from doing something)
- Fault not strictly required, but there are cases where intention was to be responsible for certain performance
- Remedies available except for cases of negative performance, the innocent party may apply for an interdict
- If the creditor accepts the defective performance as partial, then may claim damages that are equal to the difference in value between proper performance and the actual performance
- Aggrieved party can refuse to perform until the other party remediates the defects
Right to Cure
- The party in breach does not have a right to cure the performance before the aggrieved party exercises their right
- Exception of lease agreements
- If the premises become defective after the agreement, the lessee may not cancel it until the lessor has been given a chance to repair
Remedies for Breach of Contract
- Self-help is not allowed, there are legally recognised remedies
- Remedies determined by the parties
- Cancellation clause (Lex Commissoria): Gives a party right to cancel
- Penalty (Forfeiture) Clause: Full amount is payable to obviate proving damages
- Acceleration Clause: Makes outstanding balance immediately due
- Interest Clause: Regulates payable interest if debtor defaults
- Restitution Clause: Regulates what is restored if the agreement is cancelled
Ex Lege Remedies
- Aiming for enforcement or fulfilment
- Specific performance
- ENAC
- Interdict
- Withdrawal, cancellation, termination
Specific Performance
- Court orders a party to perform as specified in the contract
- Available when the debt is due and enforceable
- Court has the equitable discretion to refuse
- Breach is not required
- Equitable discretion allows the court to refuse performance
Damages
- Monetary compensation for damages resulting from breach
- Damages may supplement a claim for specific performance or cancellation
- Trivial damages are excluded
- Causation is required
Burden of Proof
- Responsibility for proving loss is usually held by the aggrieved party
- Exception for proving mitigation falls on the party in breach
- Party bearing the burden also carries the risk of persuasion
- Proving damages, including reasonable costs of mitigation
Calculating Damages
- Difference Theory: Difference between the aggrieved party's current position and what it would be if the contract had not been breached
- Concrete Approach (Anglo-American): Includes expectation interest, reliance interest, and indemnity interest
- Mitigation: Aggrieved party required to minimize losses (duty to mitigate)
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Description
This quiz explores key concepts in contract law, focusing on debtor and creditor responsibilities. It covers topics such as mora, implied terms, and the implications of delays in contract performance. Test your understanding of these vital legal principles!
