PVL3702 LAW OF
CONTRACT ALL
ASSIGNMENTS
WITH MEMOS
FROM 2012- 2021
,1 MEMORANDA OF ASSIGNMENTS
This tutorial letter contains the memoranda of the answers to the assignments.
1.1 Assignment 01
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
3
,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
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.
(2) Identify the relevant section(s) in the textbook
If the “Table of Cases” is consulted at the end of Hutchison and Pretorius (eds) The Law of
Contract in South Africa 3 rd ed (Oxford Cape Town 2017), you will find the pages where Cape
Explosive, Bal and A to Z are discussed in the textbook. Only those relevant pages which are
prescribed for you to study are referred to below.
The relevant page on which Cape Explosive appears in the text, is on page 60. The page
mainly deals with postal contracts relating to the expedition theory. Accordingly, it explains the
framework of how a contract may be concluded by post, and thereafter there is a discussion of this
case and the court’s ruling. In this case the expedition theory was successfully applied and the court
held that the contract was concluded when and where the letter of acceptance was posted. This
does not automatically mean that the expedition theory will apply to the facts in your
question. Whether or not the expedition theory applies, will be based on the application
of the law to the facts presented.
Bal appears in footnote 61 on page 60 as authority for the requirement that the postal service should
be operating normally for the expedition theory to apply. Therefore, where there is a disruption
of such postal services, like in times of war, the expedition theory would probably not apply.
A to Z appears in footnote 66 on page 61 as authority for the requirement that, for the
expedition theory to apply, the offeror must not have indicated a contrary intention, expressly or
tacitly. This theory will therefore not apply if the offeror prescribes a different mode of
acceptance to be complied with by the offeree, for the contract to be concluded.
Regarding the above cases, the relevant sections of the textbook are pages 60-61 where the
application of the expedition theory relating to postal contracts is discussed. The requirements to be
met for the expedition theory to apply, are also set out. The application of this theory impacts
4
, on determining whether a contract has been concluded, and if so, where and when the contract has
been concluded (or put another way, where and when the acceptance took effect). Considering that
where and when an acceptance takes effect is applicable to this discussion, means that pages 58-59
are also relevant to the facts in the question.
Identifying the problem
The question is whether P accepted S's offer in time and S and P thus reached consensus and
concluded a valid contract of sale. To be more specific, the question relates to the legal rules
pertaining to when and where the acceptance takes effect (Hutchison and Pretorius (eds) The
Law of Contract in South Africa 3rd ed (Oxford Cape Town 2017 58-61)).
Discussing the relevant law applicable to the problem AND applying the law to the facts of
the problem
In our problem S made an offer to sell her motorcycle in a letter sent to P, by post. In this letter
she stated that her offer will expire on 1 February. An offer which has a time limit for acceptance
lapses automatically if it is not accepted within the prescribed time period (Hutchison and
Pretorius Contract 56). P accepted S's offer in a letter that he posted on 8 January, but S only
received the letter and read it after the due date for acceptance. The issue is thus whether P
timeously and validly accepted the offer on or before 1 February.
The general rule is that a contract only comes into being when the offeror knows that his/her offer
has been accepted (Hutchison and Pretorius Contract 59). The theory which explains this rule is
the information theory. This general rule gives effect to one of the requirements of subjective
consensus (Hutchison and Pretorius Contract 14) which is the primary basis of contractual
liability in accordance with will theory (Hutchison and Pretorius Contract 20). If we apply the general
rule, it is clear that the offer expired before acceptance, but first it has to be decided whether the
general rule (information theory) applies, or whether a recognised exception to the general rule will
apply.
There are exceptions to the general rule (Hutchison and Pretorius Contract 58-61). One such
exception is where the offeror stipulates a different method of acceptance. In this regard, the
offeror may dispense with the need for acceptance being communicated to him/her or he/she
can indicate in the offer that the contract will come into being at an earlier stage (Hutchison and
Pretorius Contract 59-60). This may be expressly indicated in the offer itself, but this is not the
case in our problem. It may also be implied from all the circumstances, the language of the offer
itself and the nature of the contract. None of these implied instances are possibly applicable to
the facts presented in the question.
Another exception to the general rule pertains to the expedition theory. Where an offer is made through
the post it is assumed (a legal fiction thus), if certain requirements are met that the offeror
5
CONTRACT ALL
ASSIGNMENTS
WITH MEMOS
FROM 2012- 2021
,1 MEMORANDA OF ASSIGNMENTS
This tutorial letter contains the memoranda of the answers to the assignments.
1.1 Assignment 01
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
3
,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
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.
(2) Identify the relevant section(s) in the textbook
If the “Table of Cases” is consulted at the end of Hutchison and Pretorius (eds) The Law of
Contract in South Africa 3 rd ed (Oxford Cape Town 2017), you will find the pages where Cape
Explosive, Bal and A to Z are discussed in the textbook. Only those relevant pages which are
prescribed for you to study are referred to below.
The relevant page on which Cape Explosive appears in the text, is on page 60. The page
mainly deals with postal contracts relating to the expedition theory. Accordingly, it explains the
framework of how a contract may be concluded by post, and thereafter there is a discussion of this
case and the court’s ruling. In this case the expedition theory was successfully applied and the court
held that the contract was concluded when and where the letter of acceptance was posted. This
does not automatically mean that the expedition theory will apply to the facts in your
question. Whether or not the expedition theory applies, will be based on the application
of the law to the facts presented.
Bal appears in footnote 61 on page 60 as authority for the requirement that the postal service should
be operating normally for the expedition theory to apply. Therefore, where there is a disruption
of such postal services, like in times of war, the expedition theory would probably not apply.
A to Z appears in footnote 66 on page 61 as authority for the requirement that, for the
expedition theory to apply, the offeror must not have indicated a contrary intention, expressly or
tacitly. This theory will therefore not apply if the offeror prescribes a different mode of
acceptance to be complied with by the offeree, for the contract to be concluded.
Regarding the above cases, the relevant sections of the textbook are pages 60-61 where the
application of the expedition theory relating to postal contracts is discussed. The requirements to be
met for the expedition theory to apply, are also set out. The application of this theory impacts
4
, on determining whether a contract has been concluded, and if so, where and when the contract has
been concluded (or put another way, where and when the acceptance took effect). Considering that
where and when an acceptance takes effect is applicable to this discussion, means that pages 58-59
are also relevant to the facts in the question.
Identifying the problem
The question is whether P accepted S's offer in time and S and P thus reached consensus and
concluded a valid contract of sale. To be more specific, the question relates to the legal rules
pertaining to when and where the acceptance takes effect (Hutchison and Pretorius (eds) The
Law of Contract in South Africa 3rd ed (Oxford Cape Town 2017 58-61)).
Discussing the relevant law applicable to the problem AND applying the law to the facts of
the problem
In our problem S made an offer to sell her motorcycle in a letter sent to P, by post. In this letter
she stated that her offer will expire on 1 February. An offer which has a time limit for acceptance
lapses automatically if it is not accepted within the prescribed time period (Hutchison and
Pretorius Contract 56). P accepted S's offer in a letter that he posted on 8 January, but S only
received the letter and read it after the due date for acceptance. The issue is thus whether P
timeously and validly accepted the offer on or before 1 February.
The general rule is that a contract only comes into being when the offeror knows that his/her offer
has been accepted (Hutchison and Pretorius Contract 59). The theory which explains this rule is
the information theory. This general rule gives effect to one of the requirements of subjective
consensus (Hutchison and Pretorius Contract 14) which is the primary basis of contractual
liability in accordance with will theory (Hutchison and Pretorius Contract 20). If we apply the general
rule, it is clear that the offer expired before acceptance, but first it has to be decided whether the
general rule (information theory) applies, or whether a recognised exception to the general rule will
apply.
There are exceptions to the general rule (Hutchison and Pretorius Contract 58-61). One such
exception is where the offeror stipulates a different method of acceptance. In this regard, the
offeror may dispense with the need for acceptance being communicated to him/her or he/she
can indicate in the offer that the contract will come into being at an earlier stage (Hutchison and
Pretorius Contract 59-60). This may be expressly indicated in the offer itself, but this is not the
case in our problem. It may also be implied from all the circumstances, the language of the offer
itself and the nature of the contract. None of these implied instances are possibly applicable to
the facts presented in the question.
Another exception to the general rule pertains to the expedition theory. Where an offer is made through
the post it is assumed (a legal fiction thus), if certain requirements are met that the offeror
5
