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Contract Law Module Outline
Contract Law Module Outline
1. Nature and scope of the law of contract. What is its place in the scheme of the
law?
2. History and theory of Contract.
3. Formation:
- Doctrines of the law of contract
- Theories of contractual liability
- Sources of law of contract
- Essential elements of a valid contract
- Agreement
- Quasi Mutual Assent
- Animus Contrahendi
- Contractual capacity
- Possibility to perform
- Formalities
- Certainty
- Legality
- Statutory illegality
- Common Law illegality
- Consequences of illegality
- Exturpi causa rule
- Pari in delicto rule
- Severing part of the contract
- Unjust enrichment action
4. Contents
- Terms
- Express terms, terms implied by facts, conduct or tacit terms
2
Terms implied by law and terms implied by trade usage
- conditions
- Suspensive and resolutive conditions
- Doctrine of fictional fulfilment
- Warranties
- Non variation clauses
- Caveat Subscriptor Rule
- Exemption clauses
- Consumer contracts
- The Consumer Protection Act
- Covenants in restraint of trade.
GENERAL TEXTS
1 Christie, The Law of Contract in South Africa, 3rd edition, Butterworths, Durban,
1996.
3
2 Kerr, Principles of the Law of Contract, 4th edition, Butterworths, burban, 1989.
3 Farlam and Hathaway, Contract cases, materials and commentary, 3rd edition,
Juta and Co. Ltd, 1988.
4 Christie, Business Law in Zimbabwe, Juta and Co Ltd, Cape Town, Wetton,
Johannesburg, 1985.
5 Van Der Merwe.
6 Joubert.
7 Ellison Kahn, Contract and Merchantile Law through the cases, 2nd edition, Juta
and Co, Cape Town, 1985.
8 Wessels, The Law of Contract in South Africa, 2nd edition, Buttwerworths and Co.
Africa Ltd, Lincolin’s Court, 1951.
9 Gibson, South African Company and Merchantile Law, Juta and Co. Ltd, Cape
Town Wetton, 1983, Johannesburg.
10 Treitel, The Law of Contract, 8th edition, Stevens and Sons Ltd, London, 1991.
11 Treitel, An Outline of the Law of Contract, 4th edition, Butterworths, London, 1984.
12 Cheshire, Fifoot and Furmston, Law of Contract, 12th edition, Butterworths,
London, 1991.
13 Atiyah, An Introduction to the Law of Contract, 4th edition, Clarendon Press,
Oxford, 1989.
14 Atiyah, The Rise and Fall of Freedom of Contract, Clarendon Press, Oxford, 1979.
15 Chitty on Contracts.
16 A Handbook on Zimbabwean Law, AJ Manase and L Madhuku.
STATUTES
1 The Consumer Protection Act, Cap. 14:44
2 The Contractual Penalties Act, Cap. 8:04.
3 The Prescription Act, Cap. 8:11.
4 Hire Purchase Act.
5 The Prescribed Rate of Interest Act, Cap. 8:10.
1. AGREEMENT
Although the mind of the parties must come together, courts of law can only judge
from external facts whether this has or has not occurred. In practice, therefore, it is the
manifestation of their wills and not the unexpressed will which is of importance. There
must be consensus ad idem, a meeting of the minds. In English law in addition to
agreement there must be consideration.
- Jordaan v Trollip 1960 1 PH A25(T).
- SAR & H v National Bank of South Africa Ltd 1924 AD 704.
- Woods v Walters 1921 AD 303.
4
- Salisbury Municipal Employees Association v Salisbury City Council 1957 (2)
SA 554 (SR).
- Irvin and Johnson (SA) Ltd v Kaplan 1940 CPD 647.
- Collen v Rietfontein Engineering Works 1948 (1) SA 413.
- Springvale Ltd v Edwards 1969 (1) SA 464 (RA).
- Steenkamp v Webster 1955 (1) SA 524 (A).
- National and Overseas Distributors Corporation (Pty) Ltd v Potato Board
1958(2) SA 473 (A).
- Allen v Sixteen Stirling Investments (Pty) Ltd 1974 (4) SA 164 (1).
- Orian Investments P/L v Ujamaa Investments P/L & Ors 1988 (1) SA 583 (ZS).
2 OFFER
An offer is a proposal put forward by a person with the intention that upon its
acceptance, without more, a contract should come into being. It must be a firm offer
and not an invitation to treat or negotiate. It must be made with the intention to
contract animus contrahendi.
- Crawley v Rex 1909 TS 1105.
- Robinson v Randfontein Estates Gold Mining Co. Ltd 1921 AD 168.
- Ferguson v Merensky 1903 TS 657.
- Efroiken v Simon 1921 CPD 367.
- Bloom v American Swiss Watch Co. 1914 AD 100.
- Lee v American Swiss Watch Co. 1914 AD 121.
- Laws v Rutherford 1924 AD 261.
- Dietrichsen v Dietrichsen 1911 TPD 486.
- Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256.
- Bird v Sumerville 1960 (4) SA 395 (N).
- Harvey v Facey [1893] AC 552.
- Greenacres Farm (Pty) Ltd v Haddon Motors (Rt) Ltd 1983 (1) ZLR 17 (SC).
- Maritz v Pratley (1894) 11 SC 345.
- Levben Products P/L v Alexander Films P/L 1959 (3) SA208 (SR).
3 ACCEPTANCE
A contract comes into being when an offer made intention to contract is accepted by
the person to whom the offer was addressed in the prescribed manner. An
acceptance must be unconditional, unequivocal and should bring the contract into
existence.
- R v Nel 1921 AD 339
- Hersh v Nel 1948 (3) SA 686 (A)
- Bloom v American Swiss Watch Co. (supra)
- Boerne v Harris 1949 (1) SA 793 (A)
- Laws v Rutherford 1924 AD 261
- Houston v Bletchly 1926 EDL 305
- Blew v Snoxell 1931 TPD 226
- McKenzie v Farmers Coop Meat Industries Ltd 1922 AD 16
- Blundell v Blom 1950 (2) SA 627 (W)
- Cape Explosives Works Ltd v SA Oil & Fat Industries 1921 CPD 1244
- Francis “Two aspects of contracting by telegram” (1967) 84 SALJ 278
- Blower v van Noorden 1909 TS 890.
* Kahn “Some mysteries of offer and acceptance” (1955) 72 SALJ 246
- Stewart v Zagreb Properties (Rt) Ltd 1971 (2) SA 346 (RA)
- Wolmer v Rees 1935 TPD 319
5
- Tel Peda Investigation Bureau (Pty) Ltd v Van Zyl 1965 (4) SA 475 (E)
* Olmesdahnl, “Unheralded demise of Wolmer versus Rees” (1984) 101 SALJ
545
- PTC v Support Construction P/L 1998 (2) ZLR 221 (SC)
- Associated Printing & Packaging P/L and Ors v Lavin & Anor 1996 (1) ZLR 87
(SC)
- Odendaal v Norbert 1973 (2) SA 749 ®
“When a man makes an offer in plain and unambiguous language, which is understood
in its ordinary sense by the person to whom it is addressed, and accepted by him bona
fide in that sense, then there is a concluded contract. Any unexpressed reservations
hindden in the mind of the promisor are in such circumstances irrelevant. He cannot be
heard to say that he meant his promise to be subject to a condition which he omitted
to mention, and of which the other party was unaware”.
- I Pieters and Co v Salomon 1911 AD 121
- SAR and H v National Bank of SA Ltd (supra)
- Spes Bona Bank Ltd v Portals Water Treatment (South Africa) (Pty) Ltd 1983 (1)
SA 978 (A)
- Horty Investments (Pty) Ltd v Interior Accoustics (Pty) Ltd 1984 (3) SA 537 (W)
- Sonap Petroleum (SA) Pty Ltd v Pappadogianis 1992 (3) SA 234
- Steyn v LSA Motors Ltd 1994 (1) SA 49 (A)
- Irvin & Johnson (SA) Ltd v Kaplan 1940 CPD 647
- Van Ryn Wine and Spirit Co. v Chandos Bar 1928 TPD 417
- George v Fairmead (Pty) Ltd 1958 (2) SA 465 (A)
- Springvale Ltd v Edwards 1969 (1) SA 464
- Peri-Urban Areas Health Board v Breet 1958 (3) SA 783 (7)
- Gudza v University of Zimbabwe 1996 (1) ZLR 249 (SC)
- National and Overseas Distributors Corporation (Pty) Ltd v Potato Board 1958
(2) SA 473 (A)
Mutual Mistake
- Maritz v Pratley (1894) 11 SC 345
- Pieters & Co v Salomon 1911 AD 121
6
- Marensky v Markel 1994 (1) SA 249 (C)
- Allen v Sixteen Stirling Investments (Pty) Ltd (supra)
- Diedericks v Minister of Lands 1964 (1) SA 49 (N)
- Ashanti Goldfields Zimbabwe Limited -v- Jafati Mdala SC 60/17
Common Mistake
- Madzima v Mate HH 86-17
Unilateral Mistake
- Gudza v University of Zimbabwe 1996 (1) ZLR 249 (SC)
- **Ncube v Ndhlovu 1985 (2) ZLR 281 (SC)
- **ZESA –V- Darryl Smith & 55 ors SC 9/05
- **Golden Beams Development (PVT) LTD -v- Fredson Munyaradzi Mabhena
HH 296/21
-
6 FORMALITIES
As a general rule the law does not require contracts to be in writing, an oral contract is
as valid as a written. However certain contracts are by legislation required to be in
writing. Therefore formalities can be introduced by statute to change the general
common law rule e.g. Contractual Penalties Act – sale of land by installments.
- Goldblatt v Fremantle 1920 AD 123
- Maceys Stores Ltd v Tanganda Tea Co 1983 (2) ZLR 255(SC)
- Mhute v Chifamba 1999 (2) ZLR 115 (SC)
b) Misrepresentation
- Harper v Webster 1956 (2) SA 495 (FC).rescission will not be granted if
restitution is impossible
- Lamb v Walters 1926 AD 358
- Musgrove & Watson (Rt) Ltd v Rotta 1978 RLR 138 or 1978 (2) SA 918
- Feintein v Niggli 1981 (2) SA 684 (A)
- Glaston House (Pty) Ltd v Inag (Pty) Ltd 1977 (2) SA 846
- Poole and Mclennan v Nourse 1918 AD 404
- Philpott (Pvt) Ltd v Ulladale (Rt) L HC-H 2/84
- Bird v Murphy 1963 (2) PHH 42
- Orban v Stead and Anor 1978 (2) SA 713
- Bowditch v Peel & Magilr 1921 AD 561
- Small v Smith 1954 (3) SA 434
- African Organic Fertilizers and Associated Industries (Pty) Ltd v Sieling 1949 (2)
SA 131 (W)
- Trollip v Jordaan 1961 (1) SA 238
- Preller v Jordaan 1956 (1) SA 483 (A)
- Hall-Themotank (Pty) Ltd v Hardman 1968 (4) SA 818 (D)
- Trotman v Edwick 1951 (1) SA 443 (A)
- Phame P/L v Paizes 1973 (3) SA 397 (A)
- Ranger v Wykerd 1977 (2) SA 976 (A)..swimming pool crack
- Kern Trust (Edms) Bpk v Hurter 1981 (3) SA 607 ©
- Hamman v Moolman 1968 (4) SA 340 (AD)
- Bill Harveys Investment Trust (Pty) Ltd v Orangiegezicht Citrus Estate (Pty) Ltd
1958 (1) SA 479 (AD)
- Murray v McLean NO 1970 (1) SA 133 ®
- Autorama (Pvt) Ltd v Farm Equipment Auchus P/L 1984 (3) SA 483
- Coomers Motor Spares P/L Ltd v Albannis 1979 (2) SA 623 ®
- Gamet Manufacturing P/L v Postaflux P/L 1981 (3) SA 216
- Administrator Natal v Trust Bank van Africa Bpk 1979 (3) SA 824 (A)
- Dibley v Furter 1951 (4) SA 73
7 ILLEGALITY
- Chipunza v Muzangaza 2004 (1)ZLR 377.2 contracts-agreement to evade
capital gains tax-illegal
- Tsamwa v Hondo 2008 (1) ZLR 401.court bound to refuse to enforce a
contract that is illegal
- Macape P/L v Executive Estate Forrester 1991 (1) ZLR 315 (SC)
- Dube v Khumalo 1986 (2) ZLR 103 (SC).aldultery
- Wilken v Kohler 1913 AD 135
- South African Railways and Harbours v Conradie 1922 AD 137
- Schierhout v Minister of Justice 1926 AD 99
- Lion Match Co Ltd v Wessels 1946 OPD 376
- Tuckers Land & Development Corporation ((Pty) Ltd v Truter 1948 (2) SA 150
(SWA)
- Tuckers Land & Development Corporation (Pty) Ltd v Wasserman 1984 (2) SA
157 (T)
- Pottie v Kotze 1954 3 SA 719 (A)
- Zandberg v Van Zyl 1910 AD 302
- Waster Management Services v City of Harare 2000 (1) ZLR 172 (H)
- Kuhn v Karp 1948 4 SA 825 (T)
- Bob’s Shoe Centre v Heneways Freight Services (Pty) Ltd 1995 (2) SA 421 (A)
- Dodd v Hadley 1905 TS 439
- Jajbhay v Cassim 1939 AD 537
- Padayachey v Lebese 1942 TPD 10
- Lion Match Co. Ltd v Wessels 1946 OPD 376
- Petersen v Jajbhay 1940 TPD 182
- Van Staden v Prinsloo 1947 (4) SA 842 (T)
* Devenish “The status of acts done contrary to statutory provisions” (1990)
53 THRHR 359
9
- Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A)
- Kennedy v Steenkamp 1936 CPD 113
- Murphy v Tengende 1983 (2) ZLR 292
- Young v Van Rensburg 1991 (2) ZLR 149
- Hattingh & Ors v Van Kleek 1997 (2) ZLR 240 (S)
- Dadoo Ltd v Krugersdop Municipality Council 1920 AD 530
- Hewlett v Chipunza 1983 (1) ZLR 148.
c) Implied Terms
- Maceys Stores Ltd v Tanganda Tea Co. Ltd
- Alfred McAlpine & Sons P/L v Tansvaal Provincial Admin 1974 (3) SA 506 1983
(2) ZLR 255 (SC)
- Crook v Pedersen Ltd 1927 WLD 62
- Golden Cape Fruits P/L v Fotoplate P/L 1973 (2) SA 642
- Coutts v Jacobs 1927 EDL 120
- Davela Farm v Zimbank 1997 (2) ZLR
- Barnabas Plein & Co v Sol Jacobs & Sons 1928 AD 25
- Catering Equipment Centre v Friesland Hotel 1967 (4) SA 336 (O)
- Van Breda v Jacobs 1921 AD 330
- Crook v Pedersen Ltd 1927 WLD 62
- Reigate v Union Manufacturing Co [1918] 1 KB 592
- RB Ranches v Est McLean 1986 (1) ZLR 79
b) Consumer Contracts
- Rador Holdings Ltd & Anor v Eagle Insurance Ltd 1998(1) ZLR 479(HC)
a) Cession
- Friedlander v De Aar Municipality 1994 AD 79
- Dettman v Goldfain 1975(3) SA 385(A)
- Paiges v Van Ryn Gold Mine Est Ltd 1920 AD 600
- Willoughbey v Consolidated Co Ltd v Copthall Stores Ltd 1913 AD 267
- Eastern Rand Exploration Co Ltd v Wel 1903 TS 42
b) Delegation
c) Novation
16 Cognate Remedies
- Kwekwe Municipality v Space Age Investments P/L 1983(2) ZLR 366(HC) –
condictio indebiti
- Industrial Equity Ltd v Walker 1996(1) ZLR 85(HC)
- PPI-Spicers P/L v Darten Products P/L 1976(1) SA 559(R! – condictio indebiti
17 Prescription
- Stambolie v Commissioner of Police
- Arbar Acres v Harare Municipality 1984(2) SA 19
- Hodson v Gronger & Harvey HCH 133/91
- Syfin Holdings Ltd v Pickening 1982(1) ZLR 10
- Angelique Enterprises P/L v Alco 1990(1) ZLR 6
- Industrial Equity Ltd v David Walker HH 30/96.