TUTORIAL LETTER 3

GUIDELINES TO ANSWERS FOR ASSIGNMENT QUESTIONS

Year 2021
Semester First semester
Subject LAW OF CONTRACT
Subject code LCN301

1. DETAILS OF LECTURER/FACILITATOR OF LEARNING

Lecturer/Facilitator of Learning Adv. JJ Nieuwoudt

Consultation times Monday – Friday 19:00 to 20:00

Telephone Prefer email communication

Email jnieuwoudt@sbs.ac.za

2. EXAMINATION INFORMATION

Please refer to your examination information for the specific semester.

3. GUIDELINES TO ANSWERS FOR ASSIGNMENT QUESTIONS

Question 1 [20] (Textbook page 6)

Definition: An agreement entered into by two or more persons with the intention of creating a
legal obligation or obligations. (2)

Consensus: minds of the parties must meet on all material aspects of their agreement.
South African Law: approach is fundamentally subjective, though tempered by objective
considerations in cases of dissensus. Consensus and reasonable reliance.
Primary basis is consensus (will theory) conclusion than enquiry end.
Not – go on with reasonable reliance theory – ask whether either party by their words or
conduct led the other party into the reasonable belief that consensus had been reached
Saambou –Nasionale Bouvereniging Freidman (3)

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Capacity: must have necessary capacity to contract

Competence to create rights and duties by concluding a contract.
Persons with limited capacity: minors, married persons, insolvent persons, prodigals. (3)

Formalities: where required e.g. in certain form like writing and signed, must be observed
Alienation of Land, Suretyship, donation, antenuptial contracts, long leases of land.
Formalities in electronic contracts, formalities stipulated by parties. (3)

Legality: must be lawful and not prohibited by law

Illegal contracts: contracts against good morals, statutory illegality, Pacta de quota litis,
champerty and maintenance, unfair contracts, unfair enforcement of a contract. (3)

Possibility: obligations undertaken must be capable of performance when the agreement is

entered into
General rule: impossibility of performance prevents the creation of obligations, or impossibilium
nulla obligation est
Subjective and objective impossibility, factual and practical impossibility, legal impossibility
(3)
Certainty: must have definite or determinable content, obligations can be ascertained and
enforced
Vague language and gaps, (3)

Question 2 [20] (TB Pages 159 to 171)

The following framework should be followed:
A) Formalities prescribed by law
1. Prescribed formalities required for validity:
- Alienation of land, surety and donation: Sec 2 Of the Alienation of Land Act provides:
"
No alienation of land after commencement of this section shall … be of any force and
effect unless it is contained in a deed of alienation signed by the parties thereto or by
their agents acting on their written authority. (4)
2. Prescribed formalities required for enforcement against third parties
- Antenuptual contracts and long leases of land: valid between the parties, but must be
notarially executed and registered within three months to have effect against third
parties. Notarially execution entails the conclusion of the contract in writing in the
presence of a notary. (4)
3. Formalities in electronic contracts (4)

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B) Formalities stipulated by the parties (8)

1.Creation of contract
2.Non-variation clause (Shifren-principle)
3.Non-camcellation clause
4.Non-waiver clause

Question 3 [10] (TB Chapter 6, Page 165)

Students must refer to the following framework:
• It is common practise to insert a non-variation clause in written contracts. (1)
• The standard wording is more or less as follows
• No variation of this agreement shall be of any force or effect unless reduced to writing
and signed by the parties to the agreement. (2)
• Some doubt arose whether parties can amend an agreement orally. (1)
• These doubts were put to rest by the Appeal Court in 1964 in the well-known case of
SA Sentrale Ko-operatiewe Graanmaatskappy BPK versus Shifren. (2)
• The court held that a non-variation clause is not against public policy and that no oral
variation was effective. (2)
• The court also held that the purpose of the clause is to prevent disputes and
problems of proof. (1)
• Parties – by inserting a non-variation clause in their agreement – have limited their
powers The oral variation is therefore not valid (1)

Question 4 [10] (Answer TB p 56)

Person cannot accept offer if he is not aware of it (2)
Bloom v American Swiss Watch Co: providing info on robbery unaware of reward, court rules
cannot claim reward (3)
Until knew of offer could not accept it and until acceptance no contract (2)
Contract require consensus of two minds and if one does not know what other proposes, two
minds never came together (2)
Mary will not be successful with her claim (1)

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Question 5 [20] (Answer TB p 399)

5.1 Memorandum of Agreement
Entered into by and between
Fast & Furious Cars (Pty) Ltd
A public company established and registered in terms of the Companies Act 71 of 2008
with registration number 1234
Herein represented by Dominic Toretto duly authorised thereto by resolution.
(hereinafter referred to as the “Seller”)
Address: 112 Park Street, Willow Glen, Pretoria (2)

And

Ben Botes
Identity number 1234
Unmarried
(hereinafter referred to as the “Buyer”)
Address: 151 King Street, Krugersdorp (2)

5.2 Seller sells car and buyer buys car

Car:: BMW Z4
Price R500 000
Payment: 10 equal payments of R50 000 each
First instalment 1 August 2020
Delivery :1 July 2020 (3)

5.3 Where the Seller fails to deliver the car on 1 July 2020, he shall pay the Purchaser
R500-00 (Five Hundred Rand) per day of delay. The Purchaser may choose/elect to
claim the agreed penalty, or to claim common law damages. (3)

5.4 Where any party commits a breach of contract, the aggrieved party shall be entitled,
without prejudice to any other rights that it may have in terms of this Agreement or in
law, to (1)
i) claim specific performance of the terms of the Agreement as well as damages
which it may have suffered; (1)
ii) cancel this Agreement and claim damages; or (1)
iii) keep this Agreement in force and recover such damages as it may have
suffered as a result of such breach. (1)

5.5 This Agreement, including this clause, may only be amended or cancelled if the
amendment or cancellation is in writing and signed by the parties hereto. (2)

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5.6 This Agreement reflects the entire agreement between the parties. Each of the parties
acknowledges that, in entering into this agreement, it does not do so in reliance on any
representation, warranty or other provision except as expressly provided in this
agreement, and any conditions, warranties or other terms implied by statute or common
law are excluded from this Agreement. Neither party will have any right or remedy
arising from any undertaking, warranty or representation not included in this document.
(4)

Question 6 [20]
Marks are allocated on an overall impression and review of your answer based on the following
criteria: (The marks indicated are a guideline and I may, in my professional opinion, allocate
additional marks for a specific sub-clause for valid facts)
a) Topic chosen to do research on (2)
b) Defining the principle/rule/law (3)
c) Setting out elements/requirements of the principle (3)
d) Remedies, justification or defences (3)
e) Supporting the topic or argument with EBSCO and other sources (3)
f) A well thought through and debated conclusion (3)
g) Layout of answer (1)
h) Indication and verification that Sabinet, EBSCO and other referencing sources were
used. (1)
i) Bibliography, using the SBS Harvard Style referencing, indicating references used
(1)

TOTAL: [100]

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Level descriptors

Level Label Description

A Knowledge Straight recall of material/information,
B Comprehension The use of a specific rule, concept, method in a situation
typical to those used in class.
C Novel The selection and use of a learned rule, concept, method
application in a novel situation.
D Analysis Breaking down of material into its parts so that the
relationships among ideas are made explicit.
Synthesis Putting together parts so as to form a whole pattern or
structure of ideas not clearly there before
Evaluation Judgments about the value of material and methods for the
given purposes.

CATEGORY
KEYWORDS

Comprehension Compare, Contrast, Describe, Discuss, Draw, Estimate, Explain,

Identify, Illustrate, Indicate, Judge, Justify, Locate, Outline,
Predict, Relate, Review, Select
Application Assess, Choose, Construct, Find, Relate, Show, Sketch,
Suggest
Analysis Analyse, Appraise, Calculate, Classify, Criticise, Conclude,
Debate, Deduce, Detect, Examine, Relate, Solve, Test
Synthesis Argue, Arrange, Assemble, Conclude, Create, Formulate,
Evaluation Propose, Summarise, Judge

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EXAM PLANNING

• Below just a guideline. Please adjust exam structure in line with your specific
exam structure.

Section & Level Question set at correct level? Chapter/s covered

Question Descriptor Please √ in this question
Examiner Internal External (Chapter number &
Moderator Moderator page reference)
Section A
(30 marks)
A1 B
A2 C

Section B
(40 marks)
4 x 10
mark
questions
B1 B/C
B2 B/C
B3 B/C

4. CONCLUSION

Good luck with your studies and the examination!

Regards
Adv. Jacques Nieuwoudt

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