Law of Contract 201s compiled pack.

Tutorial Letter 201/2/2012 Law of Contract PVL3702 Semester 2 Department of Private Law This tutorial letter contains important information about your module. Bar code 2 CONTENTS 1 MEMORANDA OF ASSIGNMENTS .............................................................................. 3 2 COMMENTARY ON EXAMINATION ............................................................................. 10 PVL3702/201 3 Dear Student 1 MEMORANDA OF ASSIGNMENTS This tutorial letter contains the memoranda of the answers to the assignments. 1.1 Assignment 01 Question X, an organiser of art exhibitions, contracted with Y for an exhibition to be held on 24 to 27 July. These dates were the only dates mentioned during the negotiations. After having been pressurized by X, Y hurriedly signed the standard form contract without reading it. The contract contained a clause permitting X to change the dates of the exhibition unilaterally. Thereafter X changed the dates. X had no reason to believe that Y would have signed the contract if he had known of the term. Y averred that the contract was void. Will Y succeed in his attempt to have the contract set aside? Substantiate your answer and refer to relevant case law. Apply the direct reliance approach of the courts in answering this question. (10) Answer Identifying the problem The facts seemingly indicate that X and Y have not reached consensus based on the will theory. If so, it is necessary to determine if Y may be held bound to a contract with X, based on the reliance theory, or whether Y will escape liability. Only the direct approach to the reliance theory will be considered. Discussing the relevant law applicable to the problem, referring to the relevant case law, AND applying the law to the facts of the problem The direct reliance approach can only be applied after it has been determined that Y acted under a material mistake. It must thus be determined whether agreement (consensus ad idem) as a contractual basis exists between the parties, as required in terms of the will theory. Consensus has three elements (Hutchison and Pretorius (eds) The law of Contract in South Africa Oxford University Press Southern Africa ): the parties must seriously intend to contract, be of one mind as to the material aspects of the proposed agreement (the terms and the identity of the parties to it), and be conscious of the fact that their minds have met.