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Basic concepts of contract law by Derek Hendrikz. Covers characteristics, rights, obligations, delict, proof, consensus, capacity, formalities, legality, certainty, reciprocity. www.derekhendrikz.com
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Copyright © 2014
Derek Hendrikz Consulting
www.derekhendrikz.com
a contract is…
…an agreement entered into by two or more persons with the intention
of creating a legal obligation(s).
www.derekhendrikz.com
Requirements for a valid contract:
• Consensus – parties’ minds, material terms;
• Capacity of parties;
• Formalities (usually in writing and signed);
• Legality – statute, common law;
• Possibility – at the time (Force Majeure clause); and
• Certainty – agreement must have a definite and
determinable content; obligations must be clear for
enforcement.www.derekhendrikz.com
characteristics
of a
contract
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Juristic act – the law attaches the consequences intended by the parties (like a will, unlike a delict)
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Bilateral/multilateral conclusion – SA law does not recognise a unilateral promise (pollicitation)
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Has an undertaking that a situation exists; a warranty
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Reciprocity involved – performances promised
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Parties can agree to anything that is lawful and possible - freedom of contract
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Contracts are consensual
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Contracts are bonae fidei – parties are required to conduct their contractual relationship consistent with good faith
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The concept of obligations:
• A legal bond;
• between 2 or more parties;
• obliging the debtor to:
• give;
• do;
• refrain from doing;
• to the creditor.
• = Right to demand / duty to perform.www.derekhendrikz.com
Contract vs. Delict:
• Delict: wrongful and blameworthy action causing harm to
another:
• Wrongdoer must compensate the injured party.
• Same action might constitute a delict and a breach of
contract (medical negligence):
• Concurrent liability – plaintiff may sue on either basis.
• Courts reluctant to permit claims in delict for economic loss
caused by breach of contract (production machine, etc)www.derekhendrikz.com
Proof of contract:
• Onus lies with the party who alleges;
• Onus discharged if consensus is proved by evidence
OR:
• the reasonable reliance on consensus:
• signature of the party – prima facie evidence.
• Onus then shifts to the other party.
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