WHAT ARE THE REQUIREMENTS FOR A VALID CONTRACT?

MUST ALL CONTRACTS BE IN WRITING TO BE VALID?

For a valid contract the following must occur:

! The parties must agree to all the essential terms thereof.

One of the parties must make a firm offer to the other

party and acceptance of the offer must in turn be

communicated to the party who made the offer.

! The parties to the contract must have the legal power to

conclude such an agreement. Minors, (persons under

18) or people who are mentally ill, for instance, may

not enter into contracts.

! Parties may not contract to do something illegal. For

example the sale of uncut diamonds without a licence.

! Contracts where one party promises to deliver to do

something which is impossible, cannot be enforced.

For example where one person sells the moon to

another.

No. Most common of all misconceptions concerning

contracts is that they must be in written form to be valid. If

this were so, the majority of all contracts concluded daily

would be invalid.

Purchasing goods, going to the movies, using public

transport and eating at a restaurant are examples of

activities that include the conclusion of valid contracts as

no specific legal formalities (such as reducing the contract

to writing) are required.

There are, however, exceptions and in certain specific

This brochure will give you some insight into what

contracts are and how they operate.

One must, however, remember that there many different

kinds of contracts and, although some are mentioned

here, it is advisable to proceed with caution when entering

into a contract and to consult an attorney in the event of

any uncertainty.

No. The parties must intend legal and not merely moral

consequences to arise from their agreement. This means

that the parties must understand and intend that should

one party not carry out the promise he made in terms of the

contract, the other party may sue him in terms of the

contract.

For example, where A's girlfriend, B, promises to

accompany him to a dance and B changes her mind after

A has bought tickets to the dance, A may not sue B for the

price of the wasted tickets, because the parties did not

intend such legal consequences to arise from their

agreement.

WHAT IS A CONTRACT?

ARE ALL AGREEMENTS BETWEEN TWO OR MORE

PARTIES CONTRACTS?

A contract is an agreement between two or more people

in terms of which one party offers to do, deliver or not do

something, and the other party accepts this offer.

Usually the party who accepts the offer must remunerate

the other party or do something in exchange. For example,

A offers to sell his bicycle to B for R100 and B accepts the

offer.

CONTRACTSA LEGAL GUIDE

Published on behalf of the attorneys’ profession by the:

instances the law requires that the contract be in written

form. If the parties do not comply with this requirement and

one of the parties is unhappy with the outcome of the

arrangement, then the arrangement cannot be enforced in

some of the instances where writing is a requirement.

Some important examples of contracts that must be in

writing, with or without formalities, are marriage contracts,

donations, sale of land (of which the hire purchase

agreement is an example).

The terms and contents of a contract are easily proved if

the contract is reduced properly to writing.

Remember that an attorney draws up contracts as part of

his daily work and is thus able to express more clearly in

writing what the parties intend. A party relying on an oral

contract will probably have difficulty in proving the

contents in a court of law.

The contract could contain terms that were not part of the

verbal negotiations which are included solely for the

benefit of the other party. Conversely, the contract might

not contain terms or stipulations to your benefit which were

agreed upon during the verbal negotiations. Remember:

when in doubt, consult an attorney and go through written

WHAT ARE THE ADVANTAGES OF REDUCING A CONTRACT TO

WRITING, IF THE LAW DOES NOT REQUIRE THIS IN THE SPECIFIC

INSTANCE?

WHAT ARE THE PITFALLS OF SIGNING A WRITTEN CONTRACT

THAT HAS BEEN DRAWN UP BY THE OTHER PARTY?

agreements very carefully.

Never sign a contract without reading it merely because

you are in a hurry or want to rid yourself of an irritating

salesman.

WHAT IS BREACH OF CONTRACT?

CONTRACT OF SALE

WHAT MAY A PURCHASER DO IF HE BUYS SOMETHING THAT HAS A HIDDEN FAULT?

This means that one of the parties has in fact broken the

agreement in one or more of the following ways:

! He has not done or delivered what he promised in

terms of the contract.

! He has not paid for goods delivered by the other party.

! He has refused to carry out the contract.

! He has prevented the other party from doing or

delivering what the other party must do or deliver

according to the contract.

! He has delivered or done what he promised to do in

terms of the contract, but his performance is defective

and is completely useless or only of partial use to the

other party.

! He has, in fact, prevented himself from being able to

perform in terms of the contract.

Where a party to a contract has breached the agreement,

the innocent party should consult an attorney who will

institute an action if necessary.

The law states that the seller is responsible or liable for and

hidden or latent faults that exist in the article bought if they

were present at the time of sale. Purchasers should be

beware of buying something that is sold “voetstoots” or “as

is” or “as it stands” because selling this way the seller has

excluded his responsibility or liability for any hidden faults.

This is usually a statement made about a product by the

seller which he promises to make good. For example, the

seller may warrant that a particular television set he is

selling will not break down in four years. If it does, then the

seller must make good his promise and repair the unit at no

extra charge.

Purchasers should beware of guarantees that absolve the

seller from liability for hidden defects in the article bought

in exchange for relatively little protection for the buyer.

Remember that not all or any representations made by a

seller are guarantees.

Therefore, ask the seller exactly what he means by a

certain statement that relates to the product.

WHAT IS A WARRANTY OR GUARANTEE AND HOW DOES IT AFFECT THE BUYER?

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