Version A Take-Home Test Paper

Faculty Name: Commerce and Law

Module Code: LWCTA3-B11
Module Name: Law of Contract
Examiner: Mr Blessing Mukwehwa
Copy Editor: Mr Richard Dunningham
Date and Time Released: 08/04/2021, 08h00
Total Marks: 50
Duration: 48 Hours
Submission Date and Time: 12/04/2021, 16h00
Section A: Short and Long Questions 50 Marks

This take-home assessment contributes 30% towards the final mark.

Instructions to Student
1. Remember to keep a copy of all submitted assessments.
2. This take-home test must be completed on an individual basis; students are allowed to
consult their prescribed textbook when completing the assessment.
3. All work must be typed.
4. All work must be submitted through Turnitin1, on your campus specific myLMS page.
Penalties will be applied if you are found guilty of plagiarism.
5. Use the cover sheet template for the take home test.
6. The submission link will be made available on myLMS on the release date and will close at
the above stipulated submission date and time.
7. No late submissions are permitted.

1 Refer to the PIHE Policy for Intellectual Property, Copyright and Plagiarism Infringement, which is available on myLMS.

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Pearson Institute of Higher Education is registered with the Department of Higher Education and Training as a private higher education institution
under the Higher Education Act, 101, of 1997. Registration Certificate number: 2001/HE07/008. (Formerly Midrand Graduate and CTI Education
Group).
Section A
Short and Long Questions 50 Marks

Study the scenario and complete the questions that follow. All the questions are based on these
facts. However, some questions contain facts that have been modified for that specific question.
Read the questions carefully.

My way or . . .
Faith applies for Canadian permanent residence (PR) through the Express Entry program. She was told
by Immigration that her application can take up to six months to be finalized. On that basis she decides
to sell some of her assets so as to raise money to buy a house in Canada. One of her supervisors at
work, Franco, approaches her with the aim of purchasing her car. Faith and Franco agreed that since
Faith still needs the car for at least 6 months while waiting for her PR to be finalized, she cannot sell the
car to Franco at the moment. However, Faith guaranteed Franco that when she decides to sell, she will
give him first preference.
After the 6 months, Faith`s PR was successful. Due to excitement, she forgot about the promise she
made to Franco and decided to sell the car to her friend Catherine for R80 000. Faith and Catherine
concluded the agreement but before Faith could deliver the car to Catherine, Franco heard about this
new contract between Faith and Catherine. He was very furious about this since he had to wait for the
six months to buy this car. Eight months prior, Franco had caught Faith taking a work laptop and some
other office items from the offices to her house without permission. This was against workplace policies
and amounted to theft. Franco had ignored the incident then.
After finding out that Faith had sold the car to Catherine, Franco, who was in Cape town at the time,
used Zoom to video call Faith who was in Johannesburg. Franco told Faith that if she does not sell the
car to him, he will report her to the police and will definitely go to jail. In fear, Faith decided not to deliver
the car to Catherine. Faith offered the car to Franco for R80 000, an offer which Franco did not find
favorable. He indicated that he is prepared to pay R45 000 for the car. Faith reluctantly accepted the
new price and an agreement was reached at the end of the Zoom call. The car was delivery to Franco
the following day.
Source: Mukwehwa, B. 2021.

Question 1
1.1 Catherine is very unhappy about Faith`s failure to deliver the car to her after she had
already concluded an agreement with her. What right did she acquire when she concluded
the contract and can she claim the car from Franco? (3 Marks)
1.2 Mention two essentialia of the contract between Faith and Franco. (2 Marks)

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1.3 Between Faith and Franco, who was the offeror and who was the offeree. Explain your
answer. (3 Marks)
1.4 Based on the facts above, determine where the contract was concluded. Take special
notice of who the offeror and the offeree are before you answer. Refer to applicable
legislation in your answer. (3 Marks)
1.5 Explain to Faith the difference between a void and a voidable contract. You need to also
discuss the legal effect of each of these contracts. (4 Marks)
[Sub Total 15 Marks]

Question 2
Explain what type of mistake is made in each of the following situations (causal/non-causal; or
mistake in motive/essential mistake. After you identify the mistake explain whether the contract
will be void/voidable/valid. (1 mark is awarded for correctly identifying the mistake and 1 mark for
effect on a contract.)
2.1 Franco is interested in buying the car from Faith since he wants to use it for drag racing. He
is under the impression that the 1990 Lexus IS200 is fitted with a 3-litre petrol engine and
has a turbo. In fact, it is a 2-litre diesel without a turbo. Had Franco known this he would not
have bought the vehicle. (2 Marks)
2.2 Now assume the same facts in 2.1. above. Suppose Franco asked Faith whether it is a 3-
litre petrol engine and has a turbo. Faith confirms that it has all these specifications and
Franco relies on this guarantee and buys the car, which he would not have bought had he
known this. (2 Marks)
2.3 Suppose Faith think that she is leasing the car to Franco for 12 months for R45 000 and
Franco on the other hand, thinks he is buying the car for R45 000. (2 Marks)
2.4 Franco thinks he is buying the car and the trailer which is attached to it as shown on the
picture advertised. Faith just used a picture from the internet since it looked like her car.
She does not specifically mention whether the trailer is included or excluded. (2 Marks)
2.5 Assume Franco bought the car thinking that he had won lottery and had enough money to
buy the car but in actual fact, he had read the number wrong had not won anything.
(2 Marks)
[Sub-Total 10 Marks]

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Question 3
Faith guaranteed Franco that if she decides to sell, she will offer to sell to him. Now that the car
has been sold to Catherine, identify the type of contract which Franco entered into and further
advise him of his legal remedies. (5 Marks)

Question 4
With reference to the given facts above, determine whether there was consensus between Faith
and Franco, in particular, whether Franco’s agreement was lawfully obtained. You need to
discuss whether consensus was obtained properly/improperly. Use relevant case law to
answer the question. (Do not discuss Faith’s criminal actions or illegality of the contract. Focus
on the obtaining of consensus.) (20 Marks)

[Total 50 Marks]

End of Section A

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