LAW OF OBLIGATIONS

LAW OF CONTRACT
LAW OF DELICT
• What branches of private law are covered by the ‘law of obligations’?
• What is a ‘contract’?
• List and briefly explain the six requirements for a valid contract.
• Do all contracts have to be in writing in order
• What is the law of delict?
• What are ‘damages’?
• What is the ‘Aquilian action’?
• What is the actio iniuriarum?
• Identify and explain the four elements that must be proved in every situation where you
want to sue a wrongdoer in delict for the loss or damage suffered.
• What is an omission?
• What is the difference Between patrimonial and non-patrimonial los
 Introduction
Law of Obligations
• a person's legal duty to do something.
• regulates the relationship between two parties or people where the one party has a right
to performance and the other party has a duty to perform.
• The law of obligations covers two separate branches:
• the law of contract
• the law of delict.
 Law of Contract
• an agreement between two or more persons with the intention of
creating legally enforceable obligations .
• Obligations are duties and responsibilities that arise from a valid
contract.
• Not all agreements are contracts; however, all contracts are
agreements
 Requirements for a valid contract
1. The parties to the contract must have contractual capacity.
2. There must be agreement between the parties.
3. Formalities specified in terms of the law or the contract must be
adhered to.
4. There must be certainty in the contract.
5. There must be possibility of performance.
6. The contract must be legal.
 1. Contractual Capacity
• Each party to the contract must have the capacity to act, which means that he or she must be legally capable of
performing the particular act which gives rise to the formation of the contract.
• Not all natural persons are free to enter into binding agreements.
• The following may not have the capacity to enter into a valid contract:
a) A minor: A minor is an unmarried person below the age of eighteen.
• Minors under the age of seven are known as infants and lack contractual capacity
• minors between the ages of seven and eighteen are known as pupils and have limited contractual
capacity. They may enter into a valid contract with the assistance of a major or an elder person.
• A parent’s or guardian’s consent to a minor entering into a contract may either be express or implied.
• limping contract - a minor has entered into a contract without the assistance of, or ratification by, his parents
or guardians.
• The minor is not bound to the terms of a limping contract, and he may ask for the return of any money or
property he has handed over in terms of the contract. However, the other party to the contract is bound to it.
• Van Dyk v South African Railways & Harbours 1956 (4) SA 410 (W)
 1. Contractual Capacity cont…
b) Married persons: Marriages can be concluded in community of property with no ante-nuptial contract or out of community of
property where parties register an ante-nuptial contract.
• When a person enters into a marriage in community of property, then both spouses have equal contractual capacity regarding
their joint estate.
• Matrimonial Property Act 88 of 1984 limits the spouse’s contractual capacity to a certain extent, meaning that the spouses do
not have an entirely free hand. According to the Act, various levels of consent are required for certain contracts before they will
be valid.
• Married in Community of Property
1. Written consent of the spouse and two witnesses: If a spouse married in community of property wishes to enter into the contracts
outlined below, he or she must write a statement giving agreement to the contract. Any two witnesses can be there while this is taking
place. The contracts requiring the written consent of both the spouses and two witnesses are: contracts for the sale or mortgage of
immovable property, contracts in terms of which one spouse receives credit, contracts in terms of which one spouse agrees to act as
surety.
2. Written consent of the spouse: The written consent of the other spouse is required before a spouse: sells incorporeal movable assets
held as investments, such as shares or fixed deposits, sells corporeal movable assets held as investments, such as jewellery, coins,
stamps or paintings ,withdraws money held in the name of the other spouse held in any bank account.
3. Informal consent of the spouse: Other less important contracts require only the informal consent of the other spouse. This informal
consent can take the form of written or oral consent, express or implied. Examples of such contracts are the sale of household furniture
and giving small donations.
• Marriage out of community of property - retains full contractual capacity and may freely enter into contracts with the other
spouse, or with third parties, without the consent of the other spouse.
 1. Contractual Capacity cont….
c) Mental Deficiency: If a person’s mental condition is such that he or she is not able to understand or appreciate the
nature or consequences of his or her conduct at a level which is sufficient to enable him or her to manage the particular
affair and make rational decisions, it stands to reason that such a person cannot form the necessary will to conclude a valid
and enforceable contract.
d) Influence of alcohol or drugs: A person who is in such a state of intoxication caused by alcohol or drugs
that he or she does not appreciate the nature and consequences of his or her actions, is incapable of forming a will. Legally,
therefore, such a person is incapable of performing juristic acts.
e) Prodigals: If, by virtue of a person’s propensity to squander his or her own money in an irresponsible and extravagant
manner or the person is unable of managing his or her own affairs competently, a High Court may, on application by an
interested party, declare such a person a prodigal. A curator will then be appointed to manage the prodigal’s affairs on his
or her behalf.
f) Insolvent: The person may not contract to dispose of property attached to the insolvent estate. A person’s capacity to act
is not influenced merely by insolvency; a person’s capacity to act will be influenced by certain provisions of the Insolvency
Act 24 of 1936 (written consent of the trustee of his estate)
• contracts to dispose of assets that form part of the insolvent estate – for example, selling a house that forms part of the insolvent
estate
• contracts that will prejudice, or disadvantage, the insolvent estate – for instance, deciding to buy a holiday home in Mauritius would
increase the debt owed by the insolvent estate
• carrying on business as a general dealer or manufacturer
2. Agreement between the parties
For a contract to be considered as valid, there must be an agreement between the contracting parties./ meetings of the minds between the
parties. The offer and acceptance must be understood by the contracting parties.
Valid offer
One of the parties, the offeror, or the one who makes the offer, must have made an offer to the other party, the offeree. The offer can be in
writing or orally.
Requirements:
1. The offer must be complete in that the offeror must, for example, state what she wants to sell and how much she wants to sell it for.
2. The offer must be clear. This means that, after the offer has been made, the offeree must understand the terms of the contract.
There must be no confusion as to whether a contract has been entered into or not.
3. The offer must be made with the offeror intending that a contract will be created and that she will be bound. The offeror must not
be joking. For example, if a person said, “I am craving a chocolate doughnut so much right now that I would give up my brand new
Porsche for one,” she is not being serious and does not intend to be bound by the offer.
4. The offer must be communicated to the offeree. The offeree cannot accept the offer unless he is aware that an offer has actually
been made. Look at the case study below for an example.
5. The offer must not have lapsed, been rejected or revoked
There would be no valid contract in the absence of consensus. Parties to a contract must agree on the objectives of the contract. This is also
referred to as ‘agreement by consent’, ‘true agreement’, ‘meeting of the minds’, or ‘coincidence of the wills’.
This means that every party to the contract must have the serious intention to create rights and duties to which each of them must respect and
that the parties must make their intention known to one another
2. Agreement between the parties cont…
Valid acceptance
a contract is concluded only when the offer is accepted.
requirements:
1. The acceptance must come from the offeree. If an offer is made to a specific person, only that person may accept the offer. If an
offer is made to the world at large, then any member of the public may accept it.
2. The offeree must know about the offer. Look again at the example of the reward offered in the case study on the opposite page.
An offeree may not accept an offer unless he is actually aware that an offer has been made.
3. The acceptance must be clear and unmistakable. When the offeree accepts the offer, he must do so in a clear, precise and
unambiguous manner. This means that there must be no doubt in the mind of a reasonable person that the offer has been
accepted. Where there is reasonable doubt as to whether an offer has been accepted or not, then no valid acceptance has
occurred.
4. The acceptance must comply with the terms of the offer, so the offeree must accept the specific offer made. If he makes a counter-
offer, strictly this means that he has rejected the first offer and created a new one.
5. To be valid, the acceptance must be made within the time stated for the offer. If there is no time limit on the offer, the offeree
must accept within a reasonable time.
6. For the acceptance to be valid, it must be in the form agreed by the parties.
Postal acceptance - When acceptance by post is specified, the contract is concluded at the time and place where the acceptance is
posted.
Telephonic acceptance - the contract is concluded when and where the offeror hears the offeree’s acceptance.
3. FORMALITIES
No formalities are necessary for a binding contract to come about.
• Formalities are specified procedures - sometimes the law requires
formalities to validate and conclude a contract or parties themselves agree
that they would like certain formalities for their contract to be valid.
• legislation, some contracts require formalities specified in the piece of
legislation to be followed
• Alienation of Land Act 68 of 1981 requires a contract for the sale of land to be
written and then signed by both parties, or by their agents. cannot conclude a sale
of land orally or tacitly.
• Ante-nuptial contracts - For such a contract to be valid, it must be signed in the
presence of a notary public.
4. Certainty
There must be no ambiguity in relation to the material terms of the
contract so as to ensure that each of the parties know, with certainty,
what their rights and obligations are.
• If it is so vague that the parties do not know what they have to do to
carry out their side of the contract, it will be void and therefore
invalid.
5. Possibility of performance
The rights and obligations created by the contract must be possible to
perform.
• When a contract is physically impossible to be performed, it would
also be legally impossible for the court to enforce the contract
6. Legality
The agreement must be legally possible. This implies that the
agreement, as well as the rights and duties that are created, must be
permitted by the law
• Courts will enforce only a legal contract. A contract will be recognised as
illegal if it is prohibited by statute (statutory illegality) or if the contract is
against the interests of the community or public policy (common law
illegality).
 LAW OF DELICT
The law of delict regulates the circumstances in which a person is
obliged to bear the damage he has caused to another – i.e. circumstances
where the person prejudiced has a right to claim compensation from the
wrongdoer who has an obligation to compensate him for the damage he
has caused him.
- A delict is the act of a person which in a wrongful and culpable manner
causes harm to another
INTRODUCTION
In South African law, there are two main delictual actions:
A. Aquilian action (relates to patrimonial loss): Intention and Negligence must be proved
B. Actio iniuriarum - dealing with damages to personality interests, such as reputation, dignity , good name and privacy – intention must be
proved
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AQUILIAN ACTION
Harm or Loss – plaintiff must have suffered harm; harm must be patrimonial, which means monetary loss sustained due to physical damage to a person or property.
Elements :
1. Conduct - Conduct is a voluntary human act or omission.
• the act must be that of a human being.
• The act must be performed voluntarily.
• Conduct maybe in either the form of positive act (e.g. driving into someone) or an omission (e.g. forgetting to put on a handbrake on an incline resulting in a
collision)
DEFENCE OF AUTOMATISM
• Automatism is a defence available to someone who did not act voluntarily.
• Examples of automatism are absolute compulsion (e.g. having a gun pointed at one's head), epileptic fit, mental disease and hypnosis.
• The defence of automatism is not available if the Defendant intentionally or negligently creates situation in which he acts involuntarily (e.g. driving a car when you
know you are prone to epileptic fits)
2. Wrongfulness - For delictual liability to be conferred upon the Defendant, his conduct must be regarded as wrongful.
• To determine whether or not conduct is wrongful, the following two questions need to be asked:
1. Is there a legally recognised interest that has been infringed?
2. Was the legally recognised interest infringed wrongfully or in an unreasonable manner?
 Elements cont….
3. Fault - Fault means that the wrongdoer is legally liable for his actions.
The wrongdoer will only meet the fault element if she has capacity.
• This means that she must be able to understand the difference between right and wrong and act accordingly.
1. Youth - Children under the age of 7 are irrebuttably presumed to lack capacity. Children between the ages of 7 and 14 are rebuttably
presumed (unless proven otherwise) to lack capacity. Anyone over the age of 14 possesses capacity, unless she falls into another category
lacking such capacity.
2. Mental Illness - A person who suffers from a mental illness or disease that affects his ability to appreciate the wrongfulness of his actions
or the ability to act in accordance with his appreciation of wrongfulness does not possess capacity
• Fault can be present in the form of intention or negligence.
• So when we know that a person has capacity and is responsible for her actions, we then want to know whether she acted intentionally or
negligently.
• You act intentionally when you want the wrongful consequence of your actions to happen
• Negligence - reasonable person test - we compare the wrongdoer’s conduct to the conduct of a fictional reasonable person in the same
situation. This fictional reasonable person is an ordinary person of average intelligence, strength and bravery and is the so-called average
person in any society. As in criminal law, the reasonable person test in the law of delict asks three questions:
• 1. Would a reasonable person in the position of the wrongdoer have foreseen the possibility of his conduct causing harm?
• 2. Would a reasonable person have taken steps to prevent the harm from happening?
• 3. Did the wrongdoer in fact take these steps?

• If a reasonable person would have foreseen the possibility of harm arising and would have taken steps to prevent the harm from arising and the
wrongdoer did not take these steps, then the wrongdoer is negligent.
4, Causation - The wrongdoer’s actions must be the cause of the loss.
Factual causation - For a delict to exist there must be a connection (causal nexus) between conduct and damage. In other words, did the conduct cause the damage?
• The wrongdoer’s conduct must actually cause the damages to the wronged party or his property
• Conditio sine qua non / “but for not” test - used as a point of departure for determining the factual causal nexus between the act and harmful consequence.
- ‘but for the wrongdoer’s conduct, would the wronged party still have suffered damages?’ If the answer is no, the wrongdoer’s conduct is the factual cause of the damages. If the
wronged party would still have suffered the damages without the wrongdoer’s conduct, then the wrongdoer is not the factual cause of the wronged party’s loss. If the wronged
party does suffer loss as a result of the wrongdoer’s conduct, then the wrongdoer is the factual cause of the damages.
Lee v Minister for Correctional Services 2013 (2) SA 144 (CC) – TB case
Legal causation - The wrongdoer must also be the legal cause of the damages.
• There must be a direct link or chain between the wrongdoer’s conduct and the wronged party’s loss.
• Where there is a third party, and the third party’s conduct also contributes to the wronged party’s loss, the third party’s conduct may break the chain of causation

5. Damages - The primary objective is to compensate the person who has suffered harm.
• To restore the plaintiff’s patrimony and place him in a position he would have been in prior to the act of delict committed on him.
• Therefore, money is considered an adequate replacement
• Patrimonial loss is a loss that we can measure in terms of money.
• Non-patrimonial loss is the damages a person has suffered that cannot be easily measured in monetary terms.- pain and suffering.
• However, if Plaintiff’s negligent conduct contributes to the loss, this is considered when determining the extent of the Defendant’s liability.
• No damages, no delictual claim
FIN