PVL3702 Law of Contract- 17 October 2022- EXAM - SOLUTIONS

QUESTION 1 State the requirements for a valid offer and a valid acceptance. Do not discuss these requirements. And in your answer do not make any reference to the Consumer Protection Act 68 of 2008. QUESTION 2 Y meets Z on 1 July and hands Z a signed written offer (including all the material terms), for the purchase of Z’s Rolex watch. Y’s offer is for R50 000 and one of the terms of the offer states: “This offer lapses on 30 August”. Z accepts the offer and signs this document on 15 August. Z posts the document to Y on 28 August. The letter reaches Y on 1 September and on this date Y opens the letter and notices that Z has signed the document. Did Y and Z conclude a valid contract of sale? Discuss fully. Do not apply the Consumer Protection Act 68 of 2008. QUESTION 3 State the requirements that a party must prove in order to have a contract set aside, based on undue influence. Do not discuss these requirements. QUESTION 4 Carol, an owner of an exclusive bicycle shop advertised a special limited-edition bicycle for sale, and invited the public to make offers for the bicycle. Jane and Portia were among many other people who submitted written offers for the bicycle. Jane’s offer was for R150 000, and Portia’s offer was for R190 000. Although Carol intended to accept Portia’s offer, she erroneously wrote a letter to Jane, wherein she accepted Jane’s offer. Jane believes that an enforceable contract was formed but Carol denies this. Apply the direct reliance theory or the iustus error doctrine and advise if a legally binding contract was concluded between Carol and Jane. Discuss fully and refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. QUESTION 5 Tony sells heroin drugs to Samuel for R50 000. Both Tony and Samuel are aware that it is illegal to buy or sell heroin. Tony delivers the heroin drugs to Samuel, but Samuel refuses to pay Tony. Section 5 of the Drugs and Drug Trafficking Act 140 of 1992 provides that no person shall buy or sell (a) any harmful dependence-producing substance or (b) any dangerous dependence-producing substance or (c) any undesirable dependence-producing substance, whilst section 4 prohibits the possession of such substances. Section 13 makes the contravention of both sections 4 and 5 a crime. The Act furthermore lists heroin as a harmful dependence-producing substance. Tony approaches a court to assist him, for the payment of R50 000 from Samuel or the return of the heroin drugs. Consider the merits of both claims and advise if he will be successful? Discuss fully and refer to case law in your answer. Do not apply the Consumer Protection Act 68 of 2008. QUESTION 6 On 1 June M and Q conclude a contract whereby M undertakes to manufacture and install kitchen cupboards in Q’s home for R100 000. At the time of entering into the contract, both parties were aware that the price of timber used for manufacturing kitchen cupboards was going to go up by 20% from 1 August, which meant a saving of R20 000 for Q, because the contract was already concluded on 1 June. The parties agree that the contract price of R100 000 will be paid as soon as the kitchen cupboard units are installed. The parties further agree that the kitchen cupboards must be manufactured and installed by M on or before 15 July. The contract between the parties also stipulates that if either party is in breach of the contract, then the other party is entitled to cancel the contract. On 16 July Q tries to call M to find out why the kitchen cupboards have not been installed, but M’s phone is off. On 10 August, M informs Q that he was on an international world tour holiday and only arrived back in the country recently, and that he is willing to commence manufacturing the kitchen cupboards only if Q is willing to pay an extra R20 000 for the increase in the timber price. Q cancels the contract with M. Q subsequently contracts with X to manufacture and install the kitchen cupboards at a cost of R120 000. When X completes the job, Q approaches you for advice as he wants to claim R20 000 damages from M. Advise Q about the prospects of success for such a claim. Discuss fully. Do not apply the Consumer Protection Act 68 of 2008. QUESTION 7 A plaintiff is in breach of a reciprocal contract but nevertheless claims a reduced contract price. The defendant raises the exceptio non adimpleti contractus as a defence. What are the requirements that the plaintiff must allege and prove for the claim to be successful? Only state the requirements and do not discuss these requirements. QUESTION 8 Briefly discuss tacit terms.