Chapter 10 PT 2 Flashcards
(22 cards)
Terms are –
1) The stipulations that the parties include in their contract.
2) The provisions included in the operation of law are included in contracts.
Essentialia
1) Refers to the essential or fundamental elements crucial for forming and maintaining a contract.
2) These elements are considered necessary for the contract to be valid and enforceable.
3) These elements are typically explicitly agreed upon by the parties involved and are
fundamental to the very nature of the contract.
Example of Essentialia
1) In a sale contract, the essentialia would include the parties involved, the
price of the item being sold, the description of the item.
Naturalia elements
1) Are aspects that are not explicitly mentioned in the contract but are
deemed to be included based on common understanding, usage, or law.
2) These elements are considered to be automatically included in any contract belonging to one of the classes of specific contracts traditionally recognised by our law.
3) The terms are inherent or natural implications of the contract, even if not
expressly stated – ex lege
Examples of Naturalia
I an apartment lease agreement, the landlord’s responsibility for maintaining
the building’s structure and ensuring basic utilities are functional is often considered
naturalia, even if not explicitly listed in the contract.
Advantages of Naturalia
1) Serve to protect one of the parties from a hazard typically associated with that type of
contract.
2) Convenient as parties do not have to negotiate and agree upon them
Incidentalia elements
1) Additional or incidental terms and conditions attached to a contract but are not fundamental or essential to its existence.
2) These elements are secondary or ancillary in nature and may include clauses related to dispute resolution, warranties, or specific contingencies.
3) These terms are additional terms agreed upon by the parties that supplement or
modify the rights and duties incorporated by law – namely, naturalia
Incidentalia examples:
1) For example, incidentalia clauses in a service contract could cover issues like the
process for dispute resolution, the timeframe for service delivery, or any additional services that may be agreed upon later.
Express Terms
1) These are terms specifically agreed upon by the parties and are either articulated in an oral contract or written down.
2) The terms clearly define each party’s obligations, rights, and duties.
3) Express terms are important because they outline the primary elements and conditions of the agreement.
Signed contracts: the caveat subscriptor rule:
1) The caveat subscriptor rule (let the signatory beware) is a principle which holds that a person who signs a document is bound by its terms whether they have read and understood the document or not
The signatory can escape liability –
1) In situations of iustus error (regarding the contents of the contract, the nature of the
contract or the identity of the parties) or,
2) Where the other party reasonably relied on the appearance of consensus suggested
by the fact that the document
Standard-form contracts:
1) Standard form contracts are pre-prepared contracts where the terms and conditions (also called imposed terms) are set by one of the parties, and the other party has little to no ability to negotiate more favourable terms.
2) These are commonly used in routine commercial transactions
Ticket Cases Examples:
For example, when a person parks in a paid parking lot and receives a ticket from a machine, the back of the ticket might state that the parking lot operator is not responsible for damages or theft
Unsigned documents:
1) In some instances, unsigned documents can still be binding if both parties act in a way that implies acceptance of the terms.
2) Express terms need not all appear in the document that records a contract between parties
3) But they may be incorporated into the contract by reference – by referring to terms that are to be found in some other document that the parties may not necessarily sign
Ticket cases:
1) Ticket cases refer to scenarios where a contract is formed by the purchase and use of a ticket, such as parking or coat check tickets.
2) These often contain terms on the back of the ticket, which are binding if reasonably communicated to the consumer.
Notices:
1) Notices refer to clauses (so-called exemption or owner’s risk clause) typically designed to limit the liability of the party issuing the notice.
2) They must be adequately communicated to the other party to be enforceable
Notices Example:
For example, A gym has a notice at the entrance that states that patrons use the facilities at their own risk and that the gym will not be liable for any injuries sustained
The Consumer Protection Act:
1) The Consumer Protection Act protects consumer rights, improves consumer information, and prohibits unfair marketing and business practices
Examples of CPA:
1) For example, a consumer would have the right to return defective goods within a specified period for a full refund, despite what any signed contract might stipulate about non- refundability.
Terms prohibited by:
1) Certain contract terms may be explicitly prohibited by law and, if included, are
unenforceable. This includes terms that are unfair, discriminatory, or that waive fundamental rights under misleading conditions.
2) Immoral or contrary to public policy
Statutory prohibition
Examples of terms prohibited:
For example, a rental agreement that includes a clause allowing the landlord to terminate the lease at any time without notice would be considered unfair and thus prohibited under South
African law
Additional Clauses
1) The Conventional Penalties Act is an early example of a statute allowing a court to modify the contractual terms between the parties.
2) A penalty clause (or conventional penalty) typically requires one of the parties to
pay a certain sum to the other in the event of a breach of their contract.
