Contract Law: Duress and Its Effects

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What is the legal effect of a contract induced by duress?

The contract is unenforceable due to lack of consent.

The contract is valid and enforceable.

The contract is voidable at the option of the threatened party. (correct)

The contract is void.

What is the definition of duress (metus)?

A reward offered to the public for finding a lost item.

An invitation for others to make offers on a project or service.

Unlawful pressure used to induce someone, without their free will, into a contractual agreement. (correct)

A formal agreement to enter into a future contract.

Which of the following is NOT a requirement for duress to be proven?

The threat must be made by a party with the authority to enforce the contract. (correct)

The coercion must affect the victim's will.

The threat must be directed at the life, bodily integrity, or property of the victim or their immediate family.

The threat must be serious enough to affect a reasonably steadfast person.

What is a pacta de contrahendo, as described in the text?

A preliminary agreement to enter into a future contract. (C) Signup and view all the answers

Which of the following examples best illustrates the concept of duress?

A person threatens to damage someone's property if they don't sign a contract. (B) Signup and view all the answers

What does it mean for a contract induced by duress to be 'voidable'?

The victim can choose to cancel the contract. (B) Signup and view all the answers

Which of the following elements MUST be present for duress to be proven?

The threat must be serious enough to affect a reasonably steadfast person. (A) Signup and view all the answers

Why does the law consider a contract induced by duress to be valid, even if it is voidable?

The law recognizes that the victim still consented to the contract. (C) Signup and view all the answers

What constitutes an unlawful threat that could be considered duress?

Threatening to reveal embarrassing personal information unless a contract is signed. (A) Signup and view all the answers

Which scenario is an example of duress involving a threat to property?

A landlord threatens to evict a tenant unless they agree to a new lease with higher rent. (C) Signup and view all the answers

Which element is NOT a requirement for Aquilian damages in cases of duress?

The contract must be voidable for breach of contract. (C) Signup and view all the answers

Which type of mistake involves both parties having the same incorrect belief about a contract?

Common Mistake (C) Signup and view all the answers

Which scenario is NOT an example of duress?

A worker threatens to quit their job if their employer doesn't increase their salary. (C) Signup and view all the answers

What is a key distinction between 'imminent' and 'inevitable' threats in the context of duress?

Imminent threats are immediate, while inevitable threats may occur in the future. (A) Signup and view all the answers

Which of these scenarios exemplifies the doctrine of Quasi-Mutual Assent?

A business partner signs a contract based on a verbal agreement, even though the formal contract was not complete. (D) Signup and view all the answers

What is the main difference between a 'commercial bribe' and 'undue influence' in the context of contract formation?

Commercial bribes target agents, while undue influence targets vulnerable parties. (B) Signup and view all the answers

According to the Shifren Principle, what is the outcome of an oral variation to a contract with a non-variation clause?

The oral variation is void and unenforceable. (C) Signup and view all the answers

What happens to a contract if its performance becomes objectively impossible at the time of contracting?

The contract is void ab initio (from the beginning). (C) Signup and view all the answers

Which of these is NOT a consequence of an impossible contract?

The contract can be rescinded by the aggrieved party. (C) Signup and view all the answers

What happens to a contract if its terms are uncertain and cannot be made certain?

The entire contract is void, regardless of whether the obligation is severable or not. (C) Signup and view all the answers

What is the primary purpose of the Consumer Protection Act (CPA) according to Section 3(1)?

To promote fair business practices and protect consumers from unfair conduct. (D) Signup and view all the answers

Which of the following is NOT a fundamental consumer right outlined in Chapter 2 of the CPA?

The right to claim compensation for any breach of contract. (D) Signup and view all the answers

Which of these examples illustrates a situation where the Consumer Protection Act (CPA) would be relevant?

A business charges excessive prices for essential goods during a natural disaster. (B) Signup and view all the answers

Which of the following statements accurately reflects the purpose and intent of the Consumer Protection Act (CPA)?

The CPA aims to establish a level playing field for all consumers, regardless of their financial status. (A) Signup and view all the answers

In the context of contracts, what does 'capacity' refer to?

The ability of a party to understand the terms of the contract and its consequences. (A) Signup and view all the answers

What is the primary remedy for a breach of contract?

Damages (A) Signup and view all the answers

Which of the following is NOT a key element of delict?

Duty of care (C) Signup and view all the answers

What is the primary difference between "patrimonial damages" and "non-patrimonial damages" in delict?

Patrimonial damages are awarded for financial losses, while non-patrimonial damages are awarded for non-financial harm. (D) Signup and view all the answers

Which of the following is a key difference between contract and delict?

Contracts involve a pre-existing relationship, while delict involves a wrongful act. (A) Signup and view all the answers

Which of the following is an example of a 'non-patrimonial damage' that could be awarded in a delict case?

Emotional distress caused by a defamatory statement (D) Signup and view all the answers

In the context of contract law, what is 'specific performance'?

A court order requiring the defaulting party to fulfill their contractual obligations. (A) Signup and view all the answers

Which of the following is NOT a key element necessary for a successful delict claim?

The conduct must be intentional. (D) Signup and view all the answers

Which of the following transactions is NOT covered by the CPA?

A business-to-business transaction involving goods and services. (A), A credit agreement between a financial institution and an individual. (B) Signup and view all the answers

Which of the following is NOT a fundamental consumer right protected by the CPA?

The right to a refund for any product. (C) Signup and view all the answers

Which body is responsible for investigating consumer complaints and enforcing compliance with the CPA?

National Consumer Commission (D) Signup and view all the answers

Which of the following actions can the National Consumer Tribunal take to enforce the CPA?

Impose monetary penalties on businesses breaching the Act. (C) Signup and view all the answers

What is the primary objective of the CPA?

To promote fair business practices and protect consumer rights. (D) Signup and view all the answers

Which of the following scenarios would be covered by the CPA?

A person purchasing a new car from a dealership. (C) Signup and view all the answers

Which of the following is NOT a key point to remember about the CPA?

The CPA requires that all businesses have a dedicated consumer relations department. (A) Signup and view all the answers

Which of the following is a direct result of the implementation of the CPA?

Increased consumer awareness of their rights and protections. (B) Signup and view all the answers

What is the minimum requirement for a suretyship contract to be valid?

It must be in writing and signed by the surety. (A) Signup and view all the answers

Which type of contract requires registration at the Deeds Office to be enforceable against third parties?

Antenuptial Contract (C) Signup and view all the answers

Which of the following contracts is not required to be in writing to be valid between the contracting parties?

Antenuptial Contract (C) Signup and view all the answers

What is the minimum requirement for an executory donation to be valid?

It must be in writing, signed by the donor, and witnessed by two people. (C) Signup and view all the answers

According to the Electronic Communications and Transactions Act, when can a legal requirement for a document to be in writing be met by a data message?

For all types of contracts except for the alienation of land, long-term leases exceeding 20 years, and certain other contracts involving land. (C) Signup and view all the answers

A long-term lease exceeding 10 years must be registered against the title deed to be enforceable against:

Creditors and successors. (B) Signup and view all the answers

Which of the following is NOT a formality required for a contract involving the sale of land to be enforceable?

It must be witnessed by two people. (C) Signup and view all the answers

What is the consequence of failing to comply with the prescribed formalities required for certain contracts?

The contract becomes invalid and unenforceable. (C) Signup and view all the answers

Study Notes

Contract as an Agreement Intended to Create Enforceable Obligations

A contract is a legally binding agreement between two or more parties, intending to create legal obligations.
Social or domestic arrangements (e.g., agreeing to meet for coffee) are not contracts because there's no intention to create legal obligations.

Requirements for a Valid Contract

Consensus (Mutual Agreement): All parties must agree on essential terms.
Capacity: Parties must be of sound mind, legal age, and not under any legal disqualifications.
Formalities: Specific formalities (e.g., written and signed) may be needed for some contracts.
Legality: The subject matter of the agreement must be lawful.
Possibility of Performance: Obligations must be realistically achievable.
Certainty and Clarity: Terms must be clear, specific, and definite.

Nature of a Contract (Characteristics)

Consensus: Parties must agree on essential terms.
Capacity: Parties must be legally capable of entering into a contract.
Legality: The contract must not violate the law or public policy.
Possibility of Performance: Obligations must be achievable.
Formalities: Some contracts require specific forms (e.g., written and signed).

Meaning of Animus Contrahendi and "Gentleman's Agreement," Electronic Offers, and Restraint of Trade Conflicts

Animus Contrahendi: Refers to the intent to create binding legal obligations.
Gentleman's Agreement: An informal arrangement based on trust rather than enforceable law.
Electronic Offers: Legally recognized in South Africa under the Electronic Communications and Transactions Act.
Restraint of Trade Clauses: Must balance freedom to work with constitutional rights and only enforced if reasonable and fair.

Cornerstones of the Law of Contract

Freedom of Contract: Individuals are free to choose whether to contract, with whom, and the terms. Allowing autonomy in personal and commercial transactions.
Sanctity of Contract: Contracts entered into freely and with intent are binding and enforceable (pacta sunt servanda).

Consumer Protection Act (CPA) - Right to Information

The CPA ensures fair treatment and clear information access to consumers.
Section 22: Requires suppliers to provide information understandably.
Prohibited Terms: Terms that waive consumer rights, limit supplier liability, or are unfair/unreasonable.

Requirements for a Valid Offer

Firm: No room for change.
Complete: Contains all required terms.
Clear and Certain: No ambiguity.

Offers, Acceptance, and Pacta De Contrahendo

Advertisements are invitations to do business, not offers.
Promises of rewards, tenders, auctions are specific offers to the public.
Acceptance must match the offer exactly, be made to the proper party, demonstrating a conscious response, and comply with any prescribed method.

Duress (Metus)

Duress occurs when one party uses improper pressure to force another into a contract. Coercion must affect the victim's will, not just their body. The threat should be serious enough to affect a reasonable person.
The threat must be immediate.
The threat must be unlawful or morally wrong.
Duress makes the contract voidable.

Damages in Cases of Duress

Aquilian damages: compensation for financial harm caused by wrongful conduct.
Wrongful conduct: The threat must be unlawful or morally wrong.
Financial loss: The victim must have suffered quantifiable financial loss.
Causal link: The loss must be directly caused by duress.
Fault: The party applying duress must have acted intentionally or negligently.

Mistake

Unilateral Mistake: One party is mistaken, and the other knows it.
Mutual Mistake: Both parties are mistaken about each other's intentions.
Common Mistake: Both parties share the same incorrect belief.

Formalities in Contracts

Alienation of Land: Land sales contracts must be in writing and signed.
Suretyship: A written contract and signature required for enforceability against third parties.

Donation

An executory donation requires written documentation, signed by the donor and witnessed by two people. The donee must accept the donation.

Prescribed Formalities Required For Enforcement Against Third Parties

Some contracts are valid between the contracting parties but require additional formalities for third-party enforceability.
Antenuptial contracts: Oral contracts are valid between parties but need to be notarized and registered within three months for enforceability to third parties.
Long leases of land: oral leases are valid between parties but must be registered against the title deed to have full legal enforceability.

Formalities in Electronic Contracts

Section 12 of the Electronic Communications and Transactions Act states that a legal requirement for a document to be in writing is met if it exists in the form of a data message and is accessible. This applies to suretyships, however does not apply to contracts for land or long-term lease exceeding 20 years.

Conditions in Contracts

Conditions qualify contractual obligations based on uncertain future events.
Positive Conditions: Obligation depends on the occurrence of an event.
Negative Conditions: Obligation depends on the non-occurrence of an event.
Suspensive Conditions: Obligations become enforceable if a condition is fulfilled.
Resolutive Conditions: Obligations fully operate but terminate if a condition is met.

Pactum de Contrahendo

A preliminary agreement where parties agree to conclude a contract in the future under specific conditions.
Common forms include option contracts and pre-emption agreements.

Remedies for Breach of Contract

Damages (monetary compensation for losses).
Specific performance (court order for fulfillment of obligations).
Cancellation (terminating contract and restoring parties to original positions).

Delict (Civil Wrong)

Civil wrong (other than breach of contract) causing harm to another.
Key Elements: Conduct, wrongfulness, fault, causation, harm.
Remedies: Damages (monetary compensation for losses).

Key Differences Between Contract and Delict

Source of Obligation: Contract - agreement; Delict - wrongful act.
Nature of the Relationship: Contract - pre-existing relationship; Delict - no prior relationship required.
Remedies: Contract - enforcing agreement/compensation for breach; Delict - compensating for harm caused by wrongful conduct.

Introduction to the CPA (Consumer Protection Act)

The CPA is a comprehensive piece of legislation regulating fundamental aspects of commerce and consumer transactions.
Its purpose is to protect consumers from exploitation and promote social and economic welfare

Purpose of the CPA

Establishing a fair, accessible, efficient, sustainable and responsible consumer market.
Reducing disadvantages faced by low-income consumers or those from low-income communities.
Promoting fair business practices.
Protecting consumers from unconscionable, unfair, or fraudulent practices.

Consumer Rights (CPA)

Right to Privacy: Consumers' personal information must be protected and not used for unsolicited marketing.
Right to Choose: Consumers can freely select goods and services.
Right to Disclosure and Information: Suppliers must provide clear and accurate information about goods and services.
Right to Fair and Responsible Marketing: Consumers must be shielded from misleading advertising.
Right to Fair and Honest Dealing: Suppliers must treat consumers fairly.
Right to Fair, Just and Reasonable Terms and Conditions: Unfair, or exploitative terms are unacceptable.

Applicability of the CPA

Applies to every transaction for the supply of goods or services within South Africa.

Enforcement of the CPA and Importance of the CPA

National Consumer Commission (NCC) handles consumer complaints and enforces compliance.
National Consumer Tribunal adjudicates disputes and awards compensation.
The CPA protects consumers from unfair practices and promotes economic welfare.

Exam Tips

Focus on understanding fundamental consumer rights and their implications.
Explain the purpose of the CPA and how it promotes consumer welfare.
Be knowledgeable about when the CPA applies and when it doesn't, acknowledging exemptions.
Understand the roles of the NCC and the National Consumer Tribunal.

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Description

This quiz explores the legal implications of duress in contract law. It covers definitions, requirements for proving duress, and the outcomes of contracts induced by duress. Test your understanding of key concepts and scenarios related to duress in legal agreements.