Introduction to the law of Contract

Thursday, 09 February 2023 15:48

Principles Cited
Basic Concepts in Contract Constitution:
Contracts are agreements between parties who have the intention to create rights and duties •1
between them that are legally binding upon the parties. •2
Note •3
Contracts can taken on various forms such as an oral, written or even tacit contract. Legislation:
Your arguments will determine if such a contract will be a valid contract •1
•2
•3
Animus Contrahendi Precedent:
A contract only becomes legally binding when both parties have the intention to enter a legally • Church of the provinces of South
binding contract. This intention is called animus contrahendi. If an agreement lacks this, they are Africa, Diocese of Cape Town v CCMA
not legally enforceable. ○ The agreement did not
Note constitute a contract because
the parties did not have the
Any type of contract can be legally binding f the parties have animus contrahendi and all other
required animus contrahendi,
requirements are met.
rather it was seen as a religious
Obligations contract
Contracts are legally binding obligations between persons or legal subjects. It creates a legal tie or
relationship. This means one party has a duty to give a certain performance and one party has a
right to receive such performance. A performance can either be dare, facere or non-facere
Note
• Creates legal rights and duties

It is important to know when a contract concludes, which gives rise to the duty to perform, from Glossary
the actual performance itself.
Note
Word Meaning
You are bound to a contract even before performance takes place
Vinculum iuris Legal tie or relationship
Dare To give something
Parties in a contract
• Creditor - party who receives the performance Facere To do something
• Debtor- Party who has to give the performance Non-facere To refrain from doing
something
Contracts can create more than one obligation. A separate obligation arises from each
 Creditor party who receives the performance
• Debtor- Party who has to give the performance Non-facere To refrain from doing
something
Contracts can create more than one obligation. A separate obligation arises from each
Unilateral Only one right and one
performance that must be given.
Obligations duty

Nature of Rights created by contract Bilateral Both parties have rights

• The right to claim a performance from a debtor is a personal and duties
○ Can only be claimed from a specific debtor and not someone who is not a party to the
contract
• Real right (absolute right)
○ Right to a specific object which can be enforced against anyone in possession of that
object
Privity of contract
This is the principle that you can only enforce a contract against the other party in a contact/ can
not be enforced against someone who did not agree to the contract.

Terms
Obligations of are determined by the terms of a contract. These terms are categorised in different
ways:
Essentialia
The essential terms that identify the type of contract we are dealing with
Naturalia
The terms that are automatically attached by law to a specific type of contract without the parties
having to specifically include them
Incidentalia
Terms that cover residual matters for which the parties wish to make special provisions or that
alter or exclude the naturalia
Express
Those terms agreed expressly, either orally or in writing
Implied
Those terms that become part of a contract by operation of law (naturalia is generally and implied
terms)
Tacit terms
Those terms which are not agreed upon expressly but are read into the contract due to the parties'
actual or imputed intention

Cornerstone of contract law

Contract law is based on 2 important principles, freedom of contract and good faith.
 Note
If a contract is illegal or against public policy, it is not enforced
Theories of contract law
Declaration theory
A contract is valid because parties declare their intention to be legally bound by a contract. It
focuses on the declaration of the parties
Will theory
Parties are bound to a contract because they intended to be bound to it. The contract represent
the free will of the parties. Only executed when the parties reach consensus
Note
This theory focuses on what the parties subjectively intended
Reliance theory
This deals with whether the parties objectively decided to enter into a contract and conclude such
contract.

Note
In our law it seems that the will theory is the point of departure and then later we rely on the
reliance theory.