Department of Mercantile Law

Business Law BER310

Semester test 30 May 2022
Time: 1h20min
Marks: 30
Examiner: Mr SN Makhubu
Internal moderator: Mr MF Qumba
External moderator: Mr EK Bapela (UNISA)

Question 1 [6]

Roy concludes a contract of purchase and sale with Pam. In terms of the contract,
Roy is selling his vintage car to Pam for R300 000 and they also agree that Pam will
pay R50 000 upon the delivery of the car. Moreover, they agree that Pam will only pay
the balance on condition that her husband Peter grants her a loan of R250 000 on or
before the 22 July 2022. Roy and Pam, approach you for advice on the type of the
condition with respect to the loan in their contract, the implications of the condition
and whether the contract is valid.

With reference to the relevant principles, explain to them fully. (6)

Question 2 [6]

Tim is hospitalised due to a serious illness. The illness has rendered him physically
and mentally exhausted. While Tim is physically and mentally exhausted, Dr James
who is treating Tim convinces Tim to sell him his five-bedroom house for R10 000.
Tim reluctantly agrees to sell his house to Dr James for R10 000. Six months later,
Tim is discharged and discovers that he has sold his house to Dr James for R10 000.
Tim wants to rescind the contract as he was not in the right state when he concluded
the contract. He claims that Dr James took advantage of his situation when he was in
hospital and would have not normally concluded the contract if it was not for Dr James’
actions.

Can Tim rescind the contract, if so, under what circumstances? Explain fully. (6)

PLEASE TURN OVER THE PAGE FOR MORE QUESTIONS ON PAGE 2

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Question 3 [6]

Thea and Ham who work as construction specialists conclude a contract of purchase
and sale. In terms of the contract, Thea is selling her scaffold for R100 000 to Ham.
Thea delivers the scaffold on the day of the conclusion of the contract to Ham.
However, they do not agree on the date of payment of the purchase price. A month
later, Thea is of the view that Ham has breached the contract by failing to pay the
purchase price. Thea approaches you for clarity on the matter.

Advise Thea on the following:

• Whether Ham has breached the contract and why, (2)

• What action she must take to ensure that Ham is in breach of contract, (3)
• What type of breach of contract will Ham be guilty of, if Thea takes the correct
action? (1)

Question 4 [6]

Sam concludes a contract with Peter. In terms of the contract, Sam intends to deliver
an expensive drilling machine to Peter for R9000. However, Sam and Peter are aware
that Sam is not the owner of the machine. The machine is owned by Sarah who is out
of the country. Peter approaches you for advice on the type of the contract they intend
to conclude, the prerequisites of such a contract and whether the contract will be
valid.

With reference to the relevant principles, advise Peter accordingly. (6)

Question 5 [6]

5.1 List two essentialia of the contract of purchase and sale. (2)

5.3 Explain under what circumstances will ownership pass to the purchaser in a
contract of purchase and sale of a movable. (2)

5.2 List two formalities for the contract of purchase and sale of land in terms of
section 2(1) of the Alienation of Land Act 68 of 1981. (2)

TOTAL [30 MARKS]