HIGHER EDUCATION PROGRAMMES

Academic Year 2021: July - December

Formative Assessment 1: Specific Contracts (HSPC230-1)
NQF Level, Credits: 7, 12
Weighting: 20%
Assessment Type: Short & Essay Questions
Educator: Tamar Natalie Naidoo
Examiner: Tamar Natalie Naidoo
Due Date: 17 September 2021

Total: 100 marks

Instructions:

• This paper consists of four (4) questions.

• It is based on units 1-4 of your study guide.
• All questions are compulsory.
• The following Learning Outcomes (LO) are assessed in this assessment:
• Understand the law regarding mistake
• Illustrate types of lease agreement
• Understand the duties of the lessor, the duties of the lessee
• Understand the lessee’s right to occupy against third parties
• Understand Impossibility of performance
• Understand and determine the consequences of Death
• Know where you can look up South African law
• Discuss legal subjects and legal rights
• Identify internal aids to interpreting a statute

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Question 1 (28 marks)

Ariana has just received her annual bonus and decided to buy herself a new lounge
suite from Home Décor INC. Ariana goes to their showroom in Umhlanga and decides
that she will purchase the brown leather lounge suite for R20 000.00 broken up over
a 12-month period. Ariana is very excited and does not read the contract properly.
Ariana then receives her first statement and is shocked to see that she is paying a
40% interest rate on the lounge suite. Ariana claims that she did not know that the
interest rate was so high and that it should have been brought to her attention. Ariana
is claiming that this was a mistake in expression.

Required:

1. Discuss the type of mistake committed in the scenario above and explain whether
such a mistake renders the contract void.

1.1 Unilateral Mistakes (13 marks)

1.2 The common law relating to Reasonable Mistakes (You are required to refer to
case law) (15 marks)

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Question 2 (30 marks)

Ryan and Mark entered into a lease agreement on the 24th of December 2020 however
they did not reduce the contract to writing. There is a possibility that Ryan (the lessor)
will be emigrating in the near future and would like some clarity and certainty regarding
the lease, should he need to terminate it. Both parties approach you for advice
Required:

2.1 Discuss the position of the parties in the event that they decide to keep the lease
operative indefinitely or if they decide to set a definite date. (8 marks)

2.2 Discuss Ryan’s rights and duties upon termination of the lease. (10 marks)

2.3. What would be the legal position should Mark decide to sell the property while
Ryan is still leasing the property. (12 marks)

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Question 3 (20 marks)

3.1 Renee agrees to buy a vehicle from Lyle for the purchase price of R150000.The
parties agree that Renee will pay the deposit on the 20th of August 2021 and the
remaining amount will be paid once she has taken delivery of the merx. On the 25th of
August 2021, due to severe floods, Lyle’s home and the car that was supposed to be
purchased by Renee is damaged beyond repair.

Required:

Discuss the extent to which the floods (unforeseen circumstance) has affected
Renee’s contract. (10 marks)

Note to student:

• Discuss the legal principle thoroughly.

• Apply the law to the facts in the scenario.

• You are advised to refer to relevant case law to substantiate your argument.

3.2 Samantha is an admitted attorney who specializes in Family Law. She has been
recently employed by De Rebus Attorneys and has signed all requisite contracts. De
Rebus Attorneys has been head hunting Samantha from the time she was a student
at UWC. One week after Samantha begins her employ at De Rebus; she is involved
in a horrific car accident and subsequently passes away. While De Rebus Attorneys
are very sad about Samantha’s demise, they are also frustrated because of the long
process that was utilized in finally acquiring Samantha’s talent and employing her.

Required:

Discuss the validity of Samantha’s employment contract with De Rebus now that she
has passed away. (10 marks)

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Question 4 (22 marks)

As a newly admitted attorney, you wish to make a lasting impression upon your client
by illustrating your vast legal knowledge, to her, on the various sources of law.
However, your client’s legal issue is quite challenging and, as such, this permits you
to research previous court cases which are of a similar nature to the existing legal
issue which you are trying to solve.
Required:

4.1. Discuss the source of law which is applicable to the above-mentioned scenario.
(12 marks)

4.2 Your client’s legal issue is of a contractual nature. She brought a copy of the
contract to you which detailed that she had purchased an antique dining room set from
Mr Lovegrove for R 100 000. As per the contractual agreement, delivery of the furniture
was supposed to take place on the 1st of August 2021, as payment had already been
made. It is now the 1st of September 2021 and Mr Lovegrove is yet to deliver the
furniture to your client.

Required:
Briefly, explain the type of legal right which your client has, as a result of the contract
she entered into, and secondly, against whom is her right enforceable. (4 marks)

4.3. The court is nearing its final stages of granting a judgment on your client’s legal
issue. However, the magistrate still wishes to peruse the provisions of the Consumer
Protection Act before making a final decision on the matter.

Required:
Outline the internal aids which the magistrate must familiarise herself with whilst
interpreting this act/statute. (6 marks)

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