PVL3702 - LAW OF CONTRACT -ASSIGNMENT MEMO PACK.

Question Read the judgments in Cape Explosive Works Ltd v South African Oil and Fat Industries; Cape Explosive Works Ltd v Lever Brothers (South Africa) Ltd 1921 CPD 244, Bal v Van Staden 1902 TS 128 and A to Z Bazaars (Pty) Ltd v Minister of Agriculture 1975 (3) SA 468 (A). Use the cases to identify the relevant examinable section(s) in the prescribed textbook. Study the relevant section of the textbook. Use these cases and textbook to answer the following question: S, who lives in Upington, sends P, who lives in Cape Town, a letter by post in which she offers to sell him her (S’s) motorcycle, a collector’s piece, for R100 000. She states in her letter that her offer will expire on 1 February. P accepts S’s offer by letter which he posts on 8 January. The postal service is disrupted by a strike which starts on 6 January and only ends on 1 February. During this period no post is delivered. S receives the letter only on 7 February and only reads it on the next day. Did a valid contract of sale arise between S and P and, if so, where and when was the contract concluded? Advise P fully. Substantiate your advice and refer to relevant case law. Do not discuss option contracts. TOTAL [10] Answer Preliminary steps relating to basic research: In order to identify the law, which you should apply to the problem, you were asked to: (1) read three court judgments; and (2) identify the relevant section(s) in the prescribed textbook. (1) Read three cases In Cape Explosive Works Ltd v South African Oil and Fat Industries; Cape Explosive Works Ltd v Lever Brothers (South Africa) Ltd 1921 CPD 244, the expedition theory was introduced into South African law. In terms of this theory, if certain requirements are met, a contract is concluded where and when the letter of acceptance was posted by an offeree. In this case, two 2 4 offers were made from different companies, to the offeree. The offeree was based in the Cape where it received the offers. The offerors sent their offers by letter through post from Gauteng and Durban, where they were based respectively. In response to both offers, the offeree sent letters of acceptance which were posted at Somerset West in the Cape, and addressed to the offerors. These acceptance letters were then subsequently received and read in Gauteng and Durban respectively, by the respective offerors. The court had to address the issue of where and when the contracts were concluded. The offerors argued that each contract was concluded in the relevant province where and when the offerors received and read the offerees acceptance. The court disagreed and held that the contracts were concluded at Somerset West, where the letters of acceptance were posted. From the judgment in Bal v Van Staden 1902 TS 128, it seems that the expedition theory can only apply when the postal services are operating normally. It emerges from A to Z Bazaars (Pty) Ltd v Minister of Agriculture 1975 (3) SA 468 (A), that the expedition theory will not apply where the offeror has expressed a contrary intention, either expressly or tacitly