Void, Voidable, and Valid Contracts: Know the Difference

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Questions and Answers

What must the producer of a notice, document or visual representation do in terms of the Act?

Produce, provide, or display in plain and understandable language

When is a notice, document, or visual representation considered to be in plain language?

When an ordinary consumer could understand the content without undue effort

What are the requirements for a valid offer?

The offer must be in plain and understandable language

What are valid contracts?

Agreements between parties that complies with the prescribed validity requirements. It creates legally enforceable rights and duties for both parties. Signup and view all the answers

Define void contracts.

Agreements that do not comply with the validity requirements. Contracts are non-existent and therefore not legally enforceable. Signup and view all the answers

Explain voidable contracts.

Voidable contracts contain a legal flaw to the disadvantage of one party, but the contract remains in effect until that party seeks to declare it void. They may arise through misrepresentation, some instances of mistake, non-disclosure, duress, or undue influence. Signup and view all the answers

What is consensus in contract law?

The minds of the parties must meet (or at least appear to meet) on all material aspects of their agreement. Contract comes into being if contracting parties have the intention to be bound to each other and if they intentionally reach agreement on all the terms of their agreement. Signup and view all the answers

How is consensus established in contract law?

By analyzing the offer and acceptance, which helps in determining when and where a contract was concluded. Signup and view all the answers

What happens if parties do not have the same understanding regarding all the terms of the contract?

Consensus is not reached. Signup and view all the answers

What is a call for tenders?

An invitation to the public to submit a tender for work to be done. Signup and view all the answers

In the case of Bloom v American Swiss Watch Co, why was the reward offer not accepted by the first person who supplied information to the police?

The first person was unaware of the offer at the time he supplied the information. Signup and view all the answers

What must parties be aware of in order for an agreement to be valid?

Parties must be aware of their agreement. Signup and view all the answers

In an auction, who makes the offer: the auctioneer or the bidder?

The bidder makes the offer. Signup and view all the answers

What is the difference between a simple auction and an auction subject to conditions?

The difference lies in whether the auction is with or without reserve. Signup and view all the answers

What is the outcome if the first person who supplies information in response to a reward offer was unaware of the offer?

No contract is formed between the person and the offeror. Signup and view all the answers

What is required for a valid acceptance in a contract?

Consensus of two minds Signup and view all the answers

Why was the court unable to award the reward in the case mentioned?

The offeree did not know of the offer Signup and view all the answers

What does the offeror have the right to do in terms of acceptance methods?

Prescribe any method of acceptance Signup and view all the answers

When does the contract come into being according to the Declaration theory of acceptance?

When the offeree expresses acceptance Signup and view all the answers

In the Expedition theory of acceptance, when does the contract come into being?

When the letter of acceptance is posted Signup and view all the answers

According to the Reception theory, when does the contract come into being?

When the letter of acceptance is received Signup and view all the answers

Where does a contract come into being according to the Information/Communication theory?

Contract comes into being at the place where and the time when the acceptance was read. Signup and view all the answers

In South Africa, when does the contract come into being?

Offeror must learn of the acceptance of the offer before actual consensus. Signup and view all the answers

What is the general rule for the acceptance of an offer in South Africa?

Contract comes into being ONLY when the acceptance is communicated to the mind of the offeror. Signup and view all the answers

When is a contract concluded in case of a postal contract?

Contract is concluded when a valid acceptance is posted or telegraphed. Signup and view all the answers

When is an agreement concluded between parties by means of data messages?

When and the place where the acceptance of the offer was received by the offeror. Signup and view all the answers

What is the exception to the general rule of acceptance communication?

Offeror stipulates a different method, postal contracts, electronic contracts. Signup and view all the answers

Study Notes

Right to Information in Plain and Understandable Language

The producer of a notice, document, or visual representation must produce, provide, or display it in plain language if no form has been prescribed.
A notice, document, or visual representation is in plain language if an ordinary consumer can understand its content, significance, and import without undue effort.

Offer and Acceptance

Requirements for a Valid Offer

A valid offer must be in the form prescribed by law, if any, or in plain language.
An offer to the public is an invitation to make an offer, not an open offer for acceptance.

Types of Contracts

Valid contracts: Agreements between parties that comply with prescribed validity requirements, creating legally enforceable rights and duties.
Void contracts: Agreements that do not comply with validity requirements, non-existent and not legally enforceable.
Voidable contracts: Contain a legal flaw to the disadvantage of one party, but remain in effect until the party seeks to declare it void.

Consensus

Consensus: The minds of the parties must meet on all material aspects of their agreement.
Parties must have the same understanding regarding all terms of the contract, or consensus is not reached.

Offers to the Public

Call for tenders: An invitation to the public to submit a tender for work to be done, not an open offer.
Promise of reward: An offer to the public to provide information in exchange for a reward.

Auctions

The auctioneer makes an invitation to do business, and the bidder makes an offer to purchase.

Requirements for a Valid Acceptance

The acceptance must be in the form prescribed by the offeror.
The offeror may authorise a particular method of acceptance without intending to prescribe it as the only acceptable method.

Theories of Acceptance

Declaration theory: Contract comes into being where and when the offeree expresses acceptance.
Expedition theory: Contract comes into being where and when the letter of acceptance was posted.
Reception theory: Contract comes into being where and when the letter of acceptance was received.
Information/communication theory: Contract comes into being when and where the acceptance was read and communicated to the offeror (general rule in South Africa).

When and Where Does Acceptance Take Effect?

In South Africa, the general rule is that the contract comes into being when the acceptance is communicated to the mind of the offeror.
Exceptions include postal contracts, electronic contracts, and situations where the offeror stipulates a different method.

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Contract Law: Valid, Void, and Voidable Contracts