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Law of Contract Notes

Law of Contract Notes



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Published by Summer
Law of Contract. 1 year (B-Juris). Faculty of Law, UNAM, Windhoek, Namibia.
Law of Contract. 1 year (B-Juris). Faculty of Law, UNAM, Windhoek, Namibia.

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Published by: Summer on Sep 10, 2009
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May’s Production
Representation which is not made bona fide, true, honest, etc. Statement made by one partyof the contract (presenter) to the other party (presentee) which is not ----- in term of contractyet is one of the reasons that includes the presentee into the contract.
Three Categories:
Fraudulent – presentation involves elements of fraud (latent defect). Negligent – presentation involves elements of negligence (reckless).Innocent – presentation involves elements of innocence.Latent defect – what you cannot seePatent defect – what you can easily see
Effects and Elements:
1.Statement or fact must be false2.Statement or fact must be wrongful/unlawful3.Misrepresentation must be made to the other party of contractEffects of fraudulent presentation:If the aggrieved party can proof these elements then there is no “
consensus ad idem
no contract.Remedies of Fraudulent Misrepresentation:1.Abide by the contract and seek damages (any wasted costs)2.Cancellation/Rescission of the contract*One cannot seek both remedies at once
Contractual DamagesDelictual DamagesContractDelictPositive approachNegative approachPosition you are in if contract is performedPosition you are in prior to the performancePhame (Pty) Ltd v Praize
Whether or not a person can seek remedies on the grounds of innocent misrepresentation?Aedilitian Remedies (all contract of sale). Roman law
The merx one is selling has a “latent defect”One can apply Aedilitian Remedies:1. Actio Redhibiyorian2. Actio quanti minorisBuyer must firstly cancel the contract and then apply restitution in
(put both partiesin the position in which they both were in before the sale). Secondly, one should give the realvalue of the merx. Abatement of the purchase price.
May’s Production
Duress & Undue Influence
Elements of Duress:
(1)Actual violence or reasonable fear.(2)The fear must be caused by the threat of some considerable evil to the party or hisfamily.(3)It must be the threat of an imminent or inevitable evil.(4)The threat or intimidation must be
contra bonos mores
.(5)The moral pressure used must have caused damages.The reasonableness of the fear The test for reasonable fear is one of objectiveness. Therefore, it can be said that the fear must be sufficient to affect the mind of a person of ordinary firmness.The object of the threatThe party himself and his family can be threatened. It is also accepted that both property(goods) and economic duress are valid. In recent years, English law has come to recognize“economic duress”. The first principles are (a) that a contract induced by threat sufficient toovercome the resistance of a person of ordinary firmness should not be allowed to stand, and(b) that no one should be permitted to profit from his own wrong.The difference between duress of a person and duress of goods is that the latter requires protest. One should protest before consenting.Vis Absoluta
no need for protest (eg: when someone holds gun to your head).Vis Compulsa
need for protest (eg: when there is room for protesting)The imminence of the threatA narrow question is asked: whether a person of ordinary firmness would have resisted thethreat? Meaning whether, assuming the threat was sufficiently serious to affect the mind of such a person, he could not have averted it by some method other than agreeing to thecontract. How much time was available to him to choose his method of averting the threat?The threat must be unlawful or 
contra bonos mores
Contra bonos mores
against good morals.
Arend v Astra Furnishers1974 1 SA 298
May’s Production
(Elements above set out in this case)
Hedricks v Barnett1975 1 SA 765
Undue Influence
In English law undue influence can be regarded as the relationship between lawyer & client,doctor & patient, mother & daughter According to Roman-Dutch law, there is no presumption, but it was later accepted in RDL.Elements:(1)The one party must have exercised influence over the other party(2)The influence must have weakened his power of resistance and made his will pliable.(3)Without that influence, the other party would not have entered into the contract.
Preller v Jordaan 1956 (1) SA 483
Illegality (Unlawfulness)
Legality of contract: whether a contract is enforceable.Statutory Illegality – whether the contract is against the statute.Legality/illegality under the common law.
Statutory Illegality
a.Void, unenforceable and the crime is committedEg: racial crime – people enter into a contract to fix the other race (black/white). b.Void, (contract against the statute) but no crime is committedEg: selling a commercial farm to a private individual instead of offering it to thegovernments for consideration first.c.Where a crime is committed but the contract is enforceableEg: when a business is opened in an area zoned for residential use only, the businesswill be operating illegally, yet the contracts that the business has made with hiscustomers is still valid.

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