SU3: Formalities Flashcards
(19 cards)
Formalities as a requirement for the conclusion of a valid contract of sale:
External visible form required for that specific contract
True or false: The general rule is that no formalities are required for a valid or enforceable contract of
sale?
True
When are formalities required to form a valid/enforceable contract?
The parties themselves may also (where no statutory formalities are required) agree to certain formalities for their contract.
What are the two possible reasons for an agreement for which the intention should be examined carefully (written, signatures, proof of payment)?
- That the contract will only be valid after the formalities are complied with; or
- That the formalities will only serve as proof of an existing contract between the parties, in which case a valid contract already exists before the formalities are complied with.
When can parties as a general rule not change, exclude or abandon formalities through mutual agreement?
When formalities are required by legislation.
Contract of sale of land
Define the following concepts:
1. Alienate
2. Land
3. Deed of alienation
- Alienate: means to sell, exchange,donate irrespective of the fact that it is subject to suspensive/resolutive condition.
- Land: any unit; any right to claim transfer of land; any undivided share in land.
- Deed of alienation: document(s) in terms of which land is alienated- wider meaning than contract.
What is the 3 aims of the formalities for contract of sale of land?
- To prevent disputes regarding the contents of a contract;
- To prevent any uncertainties regarding the contents of the contract;
- To prevent malpractices.
What does the Alienation of Land Act 68 of 1981 require?
It requires that the sale of immovable property be
reduced to writing and signed by both parties or their agents.
What are the two formalities for a contract of sale of land?
- Contract must be written
- Contract must be signed
3.Formalities for a contract of sale of land
List the 5 requirements when stated that a) a contract must be written:
- Object sold must be clearly defined
- Purchase price must be clearly defined
- Parties must be clearly described
- Alteration of written contracts
- Termination and re-instatement of written contracts
What does the formality b) Signature of parties entail?
- Both parties must sign the deed of alienation
- If parties do not act personally, their represenatives must act on their written authority
- A party to a contract does not have to sign his/her name in full (any mark/initial that identify party is sufficient)
- Where contract of purchase/sale has 2 documents, each document signed by both parties to agreement to effectively form a deed of alienation.
Describe the term “agent”.
An agent act on behalf of individuals or entities to perform certain tasks, make decisions, or enter into agreements.
An agent should have a written authority to act on behalf of his/her principle.
When should a written authority exist and agent have knowledge thereof?
The written authority must already exist at the time of the conclusion of the contract.
What is the result of such a deed of alienation and why?
It will be null and void, because one cannot act as an agent on behalf of a principal who does not exist at the time of the representative act.
4. Influence of the Consumer Protection Act on formalities
True or false: The Consumer Protection Act does not require agreements in general to be in writing
True
If an agreement is in writing, by who does it need to be signed by?
A consumer [section 50(1) and (2)]
What does section 22 state a written agreement should require?
Such written agreement should be in plain and understandable language.
5. Consequences of non-compliance with formalities
What are 6 legal consequences where formalities are not complied with the Alienation of Land Act?
a) Contract is null and void: agreement is legally invalid from outset; as if it never existed.
b) If one of the parties delivered whole/part of his/her performance, he/she can claim counter-performance from the other party.
c) Any party who delivered such performance is entitled to reclaim his/her performance from the other party.
d) Buyer has made performance in terms of invalid contract: entitled to claim from the seller interest at prescribed interest rate and reasonable compensation.
e) Seller who allowed buyer to possess land is entitled to claim from the buyer [Reasonable compensation for the buyer’s occupation, use and enjoyment of the land;
and Compensation for any intentional or negligent damages caused to the land by the
actions of the buyer or someone for whose actions he/she is responsible]
f) Where both parties delivered complete performances in terms of a contract which is actually null+void because of the fact that formalities where not complied with, the contracts is deemed to have been valid+binding from time of conclusion thereof.
What are the rights to revoke offer/terminate deed of alienation?
Here’s a clear and concise summary of the bullet points you provided:
Summary:
- Under Section 29A of the Alienation of Land Act, a natural person buying residential land for R250,000 or less can cancel the sale in writing within five days of signing.
- Upon cancellation, all payments made by the buyer must be refunded within 10 days.
- According to the Consumer Protection Act, a consumer can cancel a purchase within five business days if the goods were obtained through direct marketing.
- The supplier must refund any payment within 15 business days of cancellation.
- The consumer is responsible for returning the goods, including the cost and risk involved.
- Contracts involving direct marketing must inform consumers of their right to cancel (cooling-off right).
- The cooling-off right allows consumers to cancel, without penalties, agreements resulting from direct marketing within five business days.
- Direct marketing includes promoting or offering goods/services or soliciting donations via personal contact, mail, or electronic communication.
