Law of Contract : Preparation

Chapter 1 : Introduction to Law of Contract.

What is a contract?

A contract is an agreement between two parties, when they intended to create legal rights and
duties that legally bind them.
Not all agreements are contracts, if an agreement lacks “Intention” it is not legally binding such as
mere social agreements and gentlemen’s agreement.

What do we mean by “Intention”?

Intention in contract terms is referred to as animus-contrahendi, which is when both parties

intended to create legal rights and duties between them to legally bind them.
An agreement that would usually be valid if it lacks intention, it is not legally enforceable.

Let’s take a look at a case under “animus-contrahendi”-intent to contract.

Church of the province, Southern Africa, Diocese of cape town Vs CCMA 2002

Facts of the case

The church gave licence to an ordained priest to act as clergyman thereafter the church tribunal
found the priest guilty of misconduct and then took his licence, but they didn’t revoke his ordination
of priest.

The priest believed that he was unfairly dismissed in terms of labour of relations as he argued that
the agreement constituted an employment contract because it contained the essentials of an
employment contract.

Court’s Decision

The court held that the agreement lacked animus-contrahendi, so with that also the agreement
does not constitute to be an employment contract because of its own nature of agreement, which
is based on religion.
And the fact that the agreement had features normally associated with an employment contract
was irrelevant.

What are Legal obligations?

A contract creates an obligation between two parties. Legal obligations are the rights and duties
between both parties which require a performance. Every obligation has a right and duty for a
particular performance.
What is meant by “Performance”?
Performance in law of contract is defined as when both parties do what they promised to do upon
their agreements, performance requires both parties to conduct themselves in a certain way.

Three conducts in terms of performance

 Dare: Refers to giving something
 Facere: This term refers to doing something.
 Non-Facere: This term refers to refraining from doing something.
Parties to a contract are bound to performance even before performance takes place.