Please enable JavaScript.
Coggle requires JavaScript to display documents.
Theme 1 - The content and operation of contracts - Coggle Diagram
Theme 1 - The content and operation of contracts
1.2 Parties to the contract
Representation
Requirements
Intention
Authorisation
No obligation between principal and third party unless
Ratification
Estoppel
Distinguish between
Nuntius (messenger)
Doctrine of the undisclosed principle
The contract for the benefit of a third party
Where parties make use of stipulatio alteri
Insurance
Trust inter vivos
Parties
Stipulans - stipulates the benefit to the third party
Promittenes - promises to act to the benefit of the third party
Third party
Construction
Direct right model
Acceptance model
Multiplicity of parties
Types of joint relationships
True co-debtorship - common / collective joint relationship
True co-debtorship - joint and several liability (solidary)
Contractual agreement
Cession
Unjustified enrichment
Simple joint relationship
Factors determining joint relationship
Parties intention
Nature of the performance
Prescribed legal rules
1.1 General
Factors influencing the content and operation of a contract
Number of parties
Other factors
Difference in the nature of certain types of obligations and terms
1.3 Types of obligations
Simple, alternative, generic or facultative obligations
Generic
Performance relates to something that forms part of the genis / family
Facultative
Parties have agreed that a specific performance will be delivered but the debtor has a choice to deliver another performance. Creditor can only claim the first performance
Alternative
Where a party can perform one of a number of alternatives. The creditor has a right to claim performance of the alternatives if one cannot be delivered.
Simple
The parties have agreed to the exact performance that has to be rendered
Unilateral and reciprocal obligations
Unilateral
Performances that are not dependent on each other
Reciprocal
Performances given in exchange for one another
Divisible or indivisible performances
Divisible
Can be divided into meaningful parts
Indivisible
Cannot be divided into meaningful parts
1.4 Types of terms
Essentialia, naturalia, incidentalia
Incidentalia
You can vary the naturalia and you do that by so called incidentalia
Naturalia
Terms additional to the essentialia that are incorporated in contract by operation of law (ex lege) once contract is concluded.
Essentialia
Certain types of contracts have certain core rights and duties. These rights and duties are essentialia
Express terms, tacit terms and implied terms
Tacit terms
Terms which are actually or deemed to be intended by the parties but they are unarticulated.
The bystander test together with the criterion of business efficacy
Factors when applying the test
Only if necessary to give business efficacy to the contract
Inferred from the express terms and surrounding circumstances
Not read in a tacit term if it is contrary to the express terms
Not when the contract is detailed and comprehensive
There should not be multiple variations of the term
Concerns the actual or supposed intention of the parties
Tacit contracts
Entire contractual relationship is unarticulated
Two approaches . tests to prove the contract exists
Unambiguous conduct by the parties that is capable of no other reasonable interpretation
Process of inference, most plausible conclusion
Express terms
Expressed in words or writing
Implied terms
Term included by operation of law unless parties agree otherwise
All naturalia are ex lege terms, but not all ex lege terms are naturalia
General terms
Warranty
Term where the party assumes absolute liability for performance
Distinguish between
Consensual - contractually agreed
Ex lege
Non-variation clause
Variations have to be in writing
Supposition / assumption
Operation or exercise of contract dependent on existence of earlier or current stat of affairs
Exemption clauses
Term excluding or limiting the liability of a party - e.g., Voetstoots clause
Contra proferentem - interpretation of an ambiguous term against the party who drafted it
Modus
Qualifies a creditor's right to do something in the future
Time clauses
Reference to certain future event but we are not sure when that future event will occur.
Conditions
Qualifies operation of obligations with regards to uncertain future events
Types
Positive
A condition that will be fulfilled once it becomes certain that the future event has occurred
Negative
The condition will be fulfilled once it becomes certain that the event will not occur
Resolutive
Continued existence of the obligation is dependent on occurrence of uncertain future event. If condition is fulfilled then the obligation lapses
Potestative
Whose fulfilment depends entirely on the will of the creditor
Casual
Where the fulfilment falls outside of the conduct or actions of the parties
Mixed
Which depends partly on the actions of the creditor and partly on external factors
Suspensive
Suspends the full operation until certain that uncertain future event has occurred or will not occur
1.5 Proof and interpretation
South African Traditional approach
How to determine the common intention
Look at the ordinary meaning of the words
Look at the context the words are used in
Background circumstances
If ambiguous after these:
Consider evidence of surrounding circumstances
What passed between the parties
Subjective approach but also looked at public policy
Step-by-step approach
Current approach
Determine the meaning which would be conveyed to a reasonable person in the position of the parties
Look at the language, read in context and look at the background
This is a unitary approach
Objective approach
Two broad approaches to interpretation
Historical-psychological approach
Subjective
Parties common intention
Normative approach
Objective
Takes into account more objective factors like good faith