Contracts

Question 1

What is a contract

Answer 1

An agreement between two or more people, intended to be enforced by law

Question 2

What are the types of contracts and give an example of each

Answer 2

Written (sign on paper) , verbal (“ I owe you”) and tacit (products sold are in working condition

Question 3

What are parties to a contract

Answer 3

Those people who have reached an agreement

Question 4

What are the 8 elements of a contract

Answer 4

Offer and acceptance
Consideration
Intention
Capacity
Form
Genuine consent
Legality of purpose
Possibility of performance

Question 5

What is offer and acceptance in contracts

Answer 5

Both parties must understand the terms of the contract to be the same thing

Question 6

What is consideration in contracts

Answer 6

Something of value must me exchanges

Question 7

What is the intention In contracts

Answer 7

Intended for agreement to be legally bound

Question 8

What is capacity in contracts

Answer 8

Both parties must be legally able to enter contract (not under any influence)

Question 9

What is form in contracts

Answer 9

Any legal forms required must be completed

Question 10

What is genuine consent in contracts

Answer 10

Parties should not be forced or under threat to enter contract

Question 11

What is legality of purpose in contracts

Answer 11

Contract must not be for an illegal purpose

Question 12

What is the possibility of performance in contracts

Answer 12

Must be possible for contract to be fulfilled

Question 13

What should contracts include

Answer 13

• full names of parties to the contract
• details of agreement
• consequences of contract is broken
• signature of all parties with date and place of signing

Question 14

What are the rights and responsibilities of a contract

Answer 14

• the contract is enforcable by law
• any products must be in working condition
• if there is a breach of contract other party must compensate the other for any loss incurred
• if a contract is signed outside the place of business, there is a five day cooling period to cancel the contract

Question 15

What is a plaintiff

Answer 15

A person who brings a case against another in a court of law

Question 16

What is a defendant

Answer 16

An individual, company, or institution sued or accused in a court of law

Question 17

What is legally binding

Answer 17

Enforced by law

Question 18

What is contractual capacity

Answer 18

The ability of a person to enter a contract

Question 19

What does an employment contract contain

Answer 19

• Job title and job description
• remuneration
• benefits
• hours of work and overtime
• leave
• details of employee

Question 20

What makes contracts defective

Answer 20

If they are:
- void
- voidable
- unenforceable

Question 21

What is a void contract and an example

Answer 21

A contract that isn’t legally enforceable, starting from the time it was created

Eg. A contract to poach rhinos

Question 22

What is a voidable contract and an example

Answer 22

A contract may be rendered voidable if any party was mentally incompetent

Eg being forced to sign over your property through blackmail

Question 23

What is an unenforceable contract and an example

Answer 23

A contract concluded but is not enforceable by law

Eg. A bet with your friends for 100 rands that you can eat 20 hotdogs in 60 seconds

Question 24

What is a breach in contract

Answer 24

A failure, Without legal excuse, to perform any promise that forms all or part of the contract

Question 25

What is an insurance policy

Answer 25

A contract taken out by a person or business (the insured) to manage risk.

Question 26

What is insurance and give an example

Answer 26

Short term insurance taken insurance an incident happens Eg car insurance

Question 27

What is assurance

Answer 27

Long term insurance for incidents Eg life insurance

Question 28

When does a hire purchase agreement become property of the purchaser

Answer 28

Once all the instalments have been paid, and if the purchaser defaults on any payments the owner has the right to repossess the item

Question 29

What is a lease

Answer 29

A form outlining an agreement between a lessor and lessee that dictates how long an asset or property will be rented

Question 30

What is renting

Answer 30

Refers to the short term arrangement of one party living, or using, a piece of property owned by another party

Question 31

What does rent refer to

Answer 31

A regular payment to a landlord made by a tenant leasing some type of property like a house or apartment

Question 32

What power does the landlord have when renting

Answer 32

The right to change the terms of the rental agreement as they see fit

Question 33

What is outsourcing

Answer 33

A business practice in which a company hired a third party to perform tasks, handle operations or provide services for the company

Question 34

What are the benefits of outsourcing

Answer 34

3rd party involved is an expert in their field, cuts down on admin for the business and business only pays for services when they are needed

Question 35

What is franchising

Answer 35

Where one party grants another party the right to use it’s trademark or trade name as well as certain business systems and processes, to produce and market a good or service according to certain specifications.

Question 36

What are the costs of franchising

Answer 36

- initial lump sum payment to secure trademark for 10 years thereafter it must be renewed - furnishing costs - management fee - royalties - advertising fee

Question 37

What is a cooling off period

Answer 37

In Consumer rights legislation and practise, a cooling off period is a peri of of time following a purchase when the purchaser May chose to cancel and purchase and return goods which have been supplied for any reason and obtain a full refund

Question 38

What is the minimum for a cooling- off period

Answer 38

14 days