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WHAT ARE THE REQUIREMENTS FOR A VALID CONTRACT?
MUST ALL CONTRACTS BE IN WRITING TO BE VALID?
For a valid contract the following must occur:
! The parties must agree to all the essential terms thereof.
One of the parties must make a firm offer to the other
party and acceptance of the offer must in turn be
communicated to the party who made the offer.
! The parties to the contract must have the legal power to
conclude such an agreement. Minors, (persons under
18) or people who are mentally ill, for instance, may
not enter into contracts.
! Parties may not contract to do something illegal. For
example the sale of uncut diamonds without a licence.
! Contracts where one party promises to deliver to do
something which is impossible, cannot be enforced.
For example where one person sells the moon to
another.
No. Most common of all misconceptions concerning
contracts is that they must be in written form to be valid. If
this were so, the majority of all contracts concluded daily
would be invalid.
Purchasing goods, going to the movies, using public
transport and eating at a restaurant are examples of
activities that include the conclusion of valid contracts as
no specific legal formalities (such as reducing the contract
to writing) are required.
There are, however, exceptions and in certain specific
This brochure will give you some insight into what
contracts are and how they operate.
One must, however, remember that there many different
kinds of contracts and, although some are mentioned
here, it is advisable to proceed with caution when entering
into a contract and to consult an attorney in the event of
any uncertainty.
No. The parties must intend legal and not merely moral
consequences to arise from their agreement. This means
that the parties must understand and intend that should
one party not carry out the promise he made in terms of the
contract, the other party may sue him in terms of the
contract.
For example, where A's girlfriend, B, promises to
accompany him to a dance and B changes her mind after
A has bought tickets to the dance, A may not sue B for the
price of the wasted tickets, because the parties did not
intend such legal consequences to arise from their
agreement.
WHAT IS A CONTRACT?
ARE ALL AGREEMENTS BETWEEN TWO OR MORE
PARTIES CONTRACTS?
A contract is an agreement between two or more people
in terms of which one party offers to do, deliver or not do
something, and the other party accepts this offer.
Usually the party who accepts the offer must remunerate
the other party or do something in exchange. For example,
A offers to sell his bicycle to B for R100 and B accepts the
offer.
CONTRACTSA LEGAL GUIDE
Published on behalf of the attorneys’ profession by the:
instances the law requires that the contract be in written
form. If the parties do not comply with this requirement and
one of the parties is unhappy with the outcome of the
arrangement, then the arrangement cannot be enforced in
some of the instances where writing is a requirement.
Some important examples of contracts that must be in
writing, with or without formalities, are marriage contracts,
donations, sale of land (of which the hire purchase
agreement is an example).
The terms and contents of a contract are easily proved if
the contract is reduced properly to writing.
Remember that an attorney draws up contracts as part of
his daily work and is thus able to express more clearly in
writing what the parties intend. A party relying on an oral
contract will probably have difficulty in proving the
contents in a court of law.
The contract could contain terms that were not part of the
verbal negotiations which are included solely for the
benefit of the other party. Conversely, the contract might
not contain terms or stipulations to your benefit which were
agreed upon during the verbal negotiations. Remember:
when in doubt, consult an attorney and go through written
WHAT ARE THE ADVANTAGES OF REDUCING A CONTRACT TO
WRITING, IF THE LAW DOES NOT REQUIRE THIS IN THE SPECIFIC
INSTANCE?
WHAT ARE THE PITFALLS OF SIGNING A WRITTEN CONTRACT
THAT HAS BEEN DRAWN UP BY THE OTHER PARTY?
agreements very carefully.
Never sign a contract without reading it merely because
you are in a hurry or want to rid yourself of an irritating
salesman.
WHAT IS BREACH OF CONTRACT?
CONTRACT OF SALE
WHAT MAY A PURCHASER DO IF HE BUYS SOMETHING THAT HAS A HIDDEN FAULT?
This means that one of the parties has in fact broken the
agreement in one or more of the following ways:
! He has not done or delivered what he promised in
terms of the contract.
! He has not paid for goods delivered by the other party.
! He has refused to carry out the contract.
! He has prevented the other party from doing or
delivering what the other party must do or deliver
according to the contract.
! He has delivered or done what he promised to do in
terms of the contract, but his performance is defective
and is completely useless or only of partial use to the
other party.
! He has, in fact, prevented himself from being able to
perform in terms of the contract.
Where a party to a contract has breached the agreement,
the innocent party should consult an attorney who will
institute an action if necessary.
The law states that the seller is responsible or liable for and
hidden or latent faults that exist in the article bought if they
were present at the time of sale. Purchasers should be
beware of buying something that is sold “voetstoots” or “as
is” or “as it stands” because selling this way the seller has
excluded his responsibility or liability for any hidden faults.
This is usually a statement made about a product by the
seller which he promises to make good. For example, the
seller may warrant that a particular television set he is
selling will not break down in four years. If it does, then the
seller must make good his promise and repair the unit at no
extra charge.
Purchasers should beware of guarantees that absolve the
seller from liability for hidden defects in the article bought
in exchange for relatively little protection for the buyer.
Remember that not all or any representations made by a
seller are guarantees.
Therefore, ask the seller exactly what he means by a
certain statement that relates to the product.
WHAT IS A WARRANTY OR GUARANTEE AND HOW DOES IT AFFECT THE BUYER?
FIRM DETAILS