Assignment

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Contents Page Pg.
1. Cover Page……………………………………………………………………………………...…….1
2. Contents Page…………………………………………………………………………………..……2
3. Question 1……………………………………………………………………………………….….3-8
4. Question 2…………………………………………………………………………………...…….9-11
5. Bibliography/Reference List……………………………………………………………………..…12

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Question 1

Q.1.1

Upon a thorough examination of the facts presented in this case, I have arrived at the conclusion
that the crux of the matter lies in establishing the contract made. It is imperative to ascertain
whether a contract was indeed formed, and if so, the precise time and place of its formation.

To begin, a contract is formed when the parties agree on all of the contract's material elements.
Depending on how much negotiating occurs, the process of reaching an agreement can be brief or
lengthy.1 It entails the parties making mutual declarations of intent. These declarations are
typically analysed in terms of offer and appetence rules.2 The analysis of offer and acceptance is
an extremely useful tool that can significantly assist in determining the time and place at which a
contract is formed. As a general rule, the parties may declare their intentions in any manner,
including writing, orally, or by conduct.3

It is important to note that an offer is a contract proposal.4 It is a declaration of intent made by one
party to another party, expressing the performance that they are willing to undertake, and the
terms on which they will make it.5

Furthermore, there are certain requirements that must be satisfied for an offer to be valid. The
first requirement is that the offer must be firm.6 This means that the offer must be made with the
intent that its acceptance will result in the formation of a legally binding contract. Second, the offer
must be complete.7 In essence, the offer must encompass all crucial components of the proposed
agreement. This implies that there should not be any additional matters that require resolution
before the agreement becomes enforceable. The third requirement is that the offer be certain and
clear.8 For a contract to be formed, it is crucial that the offer presented is both sufficiently certain
and compelling enough to prompt the addressee to respond with a simple "yes." It is imperative
to emphasise that an offer must provide a reasonably clear indication of the offeror's intentions,
as a vague offer cannot create a binding obligation. In such cases, the content of the obligation
cannot be determined, and therefore, no acceptance of the offer can generate a legally binding
agreement.9

It is also worth noting that under the Consumer Protection Act,10 the producer must comply with
certain requirements when making offers to consumers. One of the most important requirements
is that the offer must be clear and understandable.11 This means that the terms of the offer must
be presented in plain language that can be easily understood by the average consumer.12
Additionally, producers must provide consumers with all relevant information about the product or

1
Hutchison, D & Pretorius, C (Eds) De Stadler, E. Du Plessis, J. Eidelen, S. Floyd, T. Hawthorn, L. Kuschke, B. Mazwell, C. & Naude,
T. The Law of Contract in South Africa 4th ed (2022) 50.
2
Hutchison et al The Law of Contract in South Africa 50.
3
Hutchison et al The Law of Contract in South Africa 50.
4
Hutchison et al The Law of Contract in South Africa 51-52.
5
Hutchison et al The Law of Contract in South Africa 51-52.
6
Hutchison et al The Law of Contract in South Africa 52-55.
7
Hutchison et al The Law of Contract in South Africa 52-55.
8
Hutchison et al The Law of Contract in South Africa 52-55.
9
Hutchison et al The Law of Contract in South Africa 52-55.
10
68 of 2008.
11
Hutchison et al The Law of Contract in South Africa 54-55.
12
Hutchison et al The Law of Contract in South Africa 54-55.

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service being offered, including any limitations or restrictions that may apply. They must also
disclose any fees or charges associated with the offer, as well as any cancellation or refund
policies.13 Finally, producers must ensure that their offers are not misleading or deceptive in any
way. This means that they cannot make false claims about the product or service being offered,
nor can they use any tactics that might pressure consumers into making a purchase.14

Moving forward, I will now delve into the notion of acceptance and its requirements. An
acceptance refers to a definitive and unequivocal expression of the offeree's intention to agree to
all the conditions outlined in the offer.15 Acceptance must also meet certain requirements in order
for it to be valid.16

The first requirement is that the acceptance must be complete.17 This means that the acceptance
must be a complete and clear agreement to all aspects of the offer. There can only be a valid
acceptance if the entire offer is accepted, nothing more or less. If the acceptance of the offeree
is conditional, contains new terms, or excludes original terms, there is therefore no clear
acceptance and no consensus is reached.18

The second requirement specifies that the acceptance must be made by the person who made
the offer.19 This means that if an offer is addressed to an unspecified group of people, such as
the general public or a specific class of people, it can only be accepted by any member of the
public or any member of that class. If it is addressed to a specific person, only that person may
accept it.20

According to the third requirement, the acceptance must be a conscious response to the offer. In
other words, if a person is unaware of an offer, they cannot accept it.21The acceptance must
also be in the form prescribed by the offeror.22 The offeror has the right to specify any method of
acceptance they see fit. If the offeror does this, no other form of acceptance will generally suffice.23
For example, Sizwe conveyed to Salim that he would be taking a vacation and therefore would
not be monitoring his email. However, Salim could still reach out to him via phone. This was
Sizwe's way of expressing his method of acceptance.

Based on the information provided, it is therefore evident that Salim and Sizwe have indeed
reached a binding contract that they are obligated to adhere to. This conclusion was reached after
a thorough examination of all relevant details surrounding the matter, which revealed that both
parties had mutually agreed to the terms and conditions of the contract. Furthermore, after it was
confirmed that Salim had clearly agreed to Sizwe’s offer, the next question is about when and
where the contract officially came about. It can be understood that the agreement was made when
Salim left a voicemail for Sizwe announcing his acceptance for the offer while he was in Pretoria.

13
Hutchison et al The Law of Contract in South Africa 54-55.
14
Hutchison et al The Law of Contract in South Africa 54-55.
15
Hutchison et al The Law of Contract in South Africa 59.
16
Hutchison et al The Law of Contract in South Africa 59.
17
Hutchison et al The Law of Contract in South Africa 59-60.
18
Hutchison et al The Law of Contract in South Africa 59-60.
19
Hutchison et al The Law of Contract in South Africa 59-60.
20
Hutchison et al The Law of Contract in South Africa 59-60.
21
Hutchison et al The Law of Contract in South Africa 59-60.
22
Hutchison et al The Law of Contract in South Africa 59-60.
23
Hutchison et al The Law of Contract in South Africa 59-60.

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As both Salim and Sizwe have fulfilled all the necessary requirements, their contract is therefore
legally valid.

Words: 953

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Q.1.2

Contract law is concerned not only with the sanctity of contract but also with fairness in contracting
agreements.24 The concept of sanctity is strongly linked to the concept of contract freedom. The
parties are free to decide whether or not to contract, with whom to contract, and on what terms to
contract under freedom of contract. The formation of a contract is the result of a free choice,
without any external interference, and the parties are sovereign during the contracting process.25
The sanctity of the contract is thus protected as a fundamental value, and parties are generally
obligated by the terms of the agreement they enter into. This rule, however, is not absolute.26

In the case of Barkhuizen v Napier,27 Ngcobo J described this rule as a profoundly moral principle,
on which the coherence of any society relies. He further stated that the idea promotes the basic
constitutional values of freedom and dignity.28 The general rule that agreements must be fulfilled,
on the other hand, cannot apply to agreements that are immoral or in conflict with public policy,
as inferred from the ideals enshrined in the Constitution, particularly the Bill of Rights. Contractual
provisions that are unfair or unreasonable will generally not be enforced.29

Additionally, the concepts of good faith, equality, and public policy are crucial in the contracting
process. These ideas have deep roots in our legal system and contribute to the body of civil law's
equitable spirit. It is vital to highlight that contract parties are obligated to conduct themselves in
a way that is compatible with good faith.30

Using the case of Barkhuizen v Napier as an example, Ngcobo J stated that the proper approach
to constitutional challenges to contractual terms is to determine whether the term challenged is
contrary to public policy, as evidenced by the values that underpin our constitutional democracy
and are expressed in the Bill of Rights.31 He went on to say that public policy symbolises the
community's legal convictions or a general sense of justice, the boni mores, and the values most
precious to our society; it takes into account the imperative of doing simple justice amongst
persons and is ultimately shaped by the idea ubuntu. The concept of fairness, justice, and
reasonableness is infused into public policy.32

With the seminal case of Brisley v Drotsky,33 the concept of fairness in contractual terms has been
recognised in South African law. The Constitutional Court ruled in this case that the common law
norm of good faith applies to all contracts and that parties must engage with one another in good
faith. This means that parties must treat each other honestly and fairly, and they must not exploit
each other's vulnerabilities or weaknesses.34

As a result, while public policy supports the freedom and sanctity of a contract, it also prohibits
the execution of a contractual term in instances when such performance would be unjust or

24
Hutchison et al The Law of Contract in South Africa 26.
25
Hutchison et al The Law of Contract in South Africa 27.
26
Hutchison et al The Law of Contract in South Africa 27.
27
2007 (5) SA 323 (CC).
28
2007 (5) SA 323 (CC) paras 57 and 87.
29
2007 (5) SA 323 (CC) paras 57 and 87.
30
Hutchison et al The Law of Contract in South Africa 31.
31
Hutchison et al The Law of Contract in South Africa 35-36.
32
Hutchison et al The Law of Contract in South Africa 35-36.
33
2002 (4) SA 1 (SCA).
34
Hutchison et al The Law of Contract in South Africa 34.

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unreasonable. Yet, the mere fact that a term is unfair or may be applied harshly does not imply
that it violates a constitutional principle.35

Two questions had to be considered in order to determine the issue of fairness. The first was
clearly aimed at the contract's objective terms. Was the clause in question so plainly unreasonable
on its face that it violated public policy?36 This investigation entailed comparing the notion of
the sanctity of contract against other competing values or concerns, such as the right to seek
judicial redress in this case, but with proper regard for the relative status of the contractual parties,
particularly their relative negotiating power.37 The second question was whether the clause should
be enforced in light of the circumstances that prevented compliance with the clause.38

It is important to keep in mind, however, that in certain circumstances, a party in a contract with
an unfair clause may have recourse. There are certain statutory provisions that protect consumers
from unfair contractual terms. The Consumer Protection Act39 (CPA) offers consumers several
protections against unfair business practices. Section 48 of the CPA expressly addresses unfair
contract terms, stating that a consumer agreement term is unfair if it is excessively one-sided in
favour of any party other than the consumer;40 if it is so unreasonable that it cannot be justified
by ordinary fairness principles;41 if it was induced by the supplier's false, misleading, or deceptive
misrepresentation;42 or if the existence, nature, and effect of the term were not adequately drawn
to the consumer's attention in a clear and conspicuous manner prior to the transaction.43

If an agreement's terms are found to be unfair, the agreement becomes null and void. This means
that the remainder of the contract will remain binding, but the unfair term will be unenforceable. 44

In addition to the CPA, parties who have been subjected to unfair contract terms have common
law remedies open to them. The courts have the power to deem a contract or a specific term of a
contract invalid if it violates public policy or the boni mores of society. Its power stems from the
court's inherent jurisdiction to preserve the interests of justice and to prevent abuse of its
process.45

In conclusion, while the sanctity of contract is an important principle, it is not absolute. Parties
must behave in good faith with one another, and consumers are protected by statutory provisions
against unfair contract terms. Furthermore, courts have the authority to declare contracts or
specific terms of contracts invalid if they violate public policy or good morals. As a result,
depending on the circumstances and nature of the contract, a party may have recourse to a
contract with an unfair clause.

In this case, Salim may rely on section 48(2) of the CPA, which provides that a consumer may
assume that any terms or conditions in a contract that are not drawn to their attention in a clear

35
Hutchison et al The Law of Contract in South Africa 35-36.
36
Hutchison et al The Law of Contract in South Africa 35-36.
37
Hutchison et al The Law of Contract in South Africa 35-36.
38
Hutchison et al The Law of Contract in South Africa 35-36.
39
68 of 2008.
40
Hutchison et al The Law of Contract in South Africa 41.
41
Hutchison et al The Law of Contract in South Africa 41.
42
Hutchison et al The Law of Contract in South Africa 41.
43
Hutchison et al The Law of Contract in South Africa 41.
44
Hutchison et al The Law of Contract in South Africa 41.
45
Hutchison et al The Law of Contract in South Africa 40-41.

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and conspicuous manner before the transaction takes place are not part of the agreement. Due
to Sizwe’s failure to do this, Salim may argue that he did not agree to that clause and it should
not be enforceable.

Words: 1 000

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Question 2

Misrepresentation is defined as a false statement made by one party to another in order to

persuade the other party to enter into a contract.46 When a person enters into a contract based
on a misrepresentation made to him, the agreement is nevertheless valid because it was induced
by such means.47 But, because the consensus is flawed, the contract is voidable in the case of
the innocent party. In other words, the misled party may set aside the contract or have it set aside
by the court, in which case each party must refund to the other party any profit gained under the
contract. The contract, however, remains valid until it is set aside.48

In appropriate circumstances, a contracting party who has been misled into contracting by the
other party's misrepresentation may set the contract aside and seek restitution, or raise the
misrepresentation as a defense when sued under the contract, and may also be entitled to recover
damages for any losses caused by the misrepresentation.49

In terms of rescission and restitution, a party who enters into a contract after a misrepresentation
has been made to him is entitled to rescission and restitution provided there is a misrepresentation
by the other party, inducement, intent to induce, and materiality. Certain conditions must be met
for a person to be entitled to rescission.50

As explained previously, misrepresentation can be an invalidating cause no less than a cause of

action. In other words, whenever a representee may rescind a contract due to misrepresentation,
he may also claim the misrepresentation as a defense to an action filed against him by the
representor based on the contract.51 This method of alleging misrepresentation as a defense is
often seen as a kind of rescission since a representee who relies on misrepresentation as a
defense must allege and establish the same facts required for the remedy of rescission. Yet, the
misrepresentation may defeat a claim for specific performance even if it does not give rise to a
rescission action.52

Furthermore, depending on the state of mind with which the misrepresentation was made, the
representee may be able to recover damages in respect of any patrimonial loss caused by the
misrepresentation, whether he chooses to cancel or abide by the contract.53 It should be
emphasised that misrepresentations are classified into three types: fraudulent, negligent, and
innocent. Due to the current circumstances, however, I will merely cover fraudulent
misrepresentation.54

Fraudulent misrepresentation is the intentional deception that causes another person financial
harm and is ultimately considered a delict in our legal system. Hence, a representee who has
been misled into entering into a prejudiced contract is entitled to delict damages.55 The five
fundamental elements of the cause of action are a representation that is false, to the best of the

46
Hutchison et al The Law of Contract in South Africa 126.
47
Hutchison et al The Law of Contract in South Africa 124.
48
Hutchison et al The Law of Contract in South Africa 126.
49
Hutchison et al The Law of Contract in South Africa 132.
50
Hutchison et al The Law of Contract in South Africa 132.
51
Hutchison et al The Law of Contract in South Africa 135-136.
52
Hutchison et al The Law of Contract in South Africa 135-136.
53
Hutchison et al The Law of Contract in South Africa 136-138.
54
Hutchison et al The Law of Contract in South Africa 136-138.
55
Hutchison et al The Law of Contract in South Africa 136-138.

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representor's knowledge, that the representor intended the representee to act on, that the
representee acted, and that the representee suffered damages as a result.56Because fraud is a
delict, the usual delictual rather than the contractual measure of damages is used. As a result,
the victim of fraudulent misrepresentation is entitled to be placed in the financial situation he would
have been in if the representation had not been made to him.57

This principle is simple to establish, but applying it to the facts of a specific case of fraud has often
been challenging, especially when the contract is upheld. Nonetheless, remedies for subsequent
losses resulting from the fraud are recoverable, provided they are not too remote.58 In this case,
it is vital to highlight that if the contract is upheld, the representee may incur a loss on the
transaction itself, and establishing such intrinsic loss creates the most difficulty.59

To remove the effect of the delict in the event of dolus dans, where there would have been no
contract at all, the representee should be placed in the financial position he would have occupied
had he not contracted.60 As compensation for his net loss on the whole transaction, he should be
provided the financial equivalent of rescission and restitution. This means compensating the
innocent party for his performance, less any benefits acquired from the other party under the
contract. In the event of a sale, his net loss equals the purchase price less the merx's actual or
fair value at the time of purchase.61 Both losses and benefits must be included because they are
directly related to the misrepresentation. As a result, if the representee realised a profit on the
deal despite the misrepresentation, he is not entitled to any damages.62

With respect to Salim, the fraudulent misrepresentation made by Sizwe does not currently affect
the validity of their contract. Notwithstanding the foregoing, as a result of the flawed consensus,
the contract is ultimately deemed to be voidable.

This provides Salim with the option to either, rescind the contract and seek restitution; or to raise
the misrepresentation as a defense. Based on the facts presented, it is evident that Salim opted
to pursue the contract and therefore has the right to assert misrepresentation as a defense.
Consequently, Salim is entitled to claim any damages resulting from such misrepresentation. 63
As previously mentioned, in order to nullify the impact of the misrepresentation, it is necessary to
restore Salim to the financial state he would have been in if he had not entered into the contract.
In simpler terms, he should receive monetary compensation equivalent to rescission and
restitution as a remedy for his net loss on the entire transaction.64

It is hereby determined that Salim is entitled to receive the value of his performance, subject to
any applicable benefits received from Sizwe pursuant to the terms of the contract. Sizwe shall be
obligated to provide compensation to Salim for any reasonable and necessary expenses incurred
by him in connection with his performance under the contract.65 This would involve covering the

56
Hutchison et al The Law of Contract in South Africa 136-138.
57
Hutchison et al The Law of Contract in South Africa 136-138.
58
Hutchison et al The Law of Contract in South Africa 136-138.
59
Hutchison et al The Law of Contract in South Africa 136-138.
60
Hutchison et al The Law of Contract in South Africa 136-138.
61
Hutchison et al The Law of Contract in South Africa 136-138.
62
Hutchison et al The Law of Contract in South Africa 136-138.
63
Hutchison et al The Law of Contract in South Africa 136-138.
64
Hutchison et al The Law of Contract in South Africa 136-138.
65
Hutchison et al The Law of Contract in South Africa 136-138.

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supplementary charges for the installation of a solid-state hard drive in his laptop, which is
necessary for him to upgrade it.

Words: 989

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Bibliography/Reference List

Legislation

Consumer Protection Act 68 of 2008.

Cases

Barkhuizen v Napier 2007 (5) SA 323 (CC).

Brisley v Drotsky 2002 (4) SA 1 (SCA).

Book

Hutchison, D & Pretorius, C (Eds) De Stadler, E. Du Plessis, J. Eidelen, S. Floyd, T. Hawthorn,

L. Kuschke, B. Mazwell, C. & Naude, T. The Law of Contract in South Africa 4th ed (2022) Penny
Lane: Cape Town.

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