basic concepts of contract law by derek hendrikz

Concepts of Contract Law

derek hendrikz

http://www.derekhendrikz.com/

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).



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




Juristic act – the law attaches the consequences intended by the parties (like a will, unlike a delict)




Bilateral/multilateral conclusion – SA law does not recognise a unilateral promise (pollicitation)




Has an undertaking that a situation exists; a warranty




Reciprocity involved – performances promised




Parties can agree to anything that is lawful and possible - freedom of contract




Contracts are consensual




Contracts are bonae fidei – parties are required to conduct their contractual relationship consistent with good faith




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.

