QUESTION 1
Z hands over a written offer to sell his Rolex watch to X for R250 000. The offer is made to X
only, and it sets out all the relevant terms for a contract of sale. Z signed the written offer as the
seller. X and Y are best friends and they both sign the same document as buyers, as t...
OCTOBER NOVEMBER EXAMINATION
PVL3702 EXAMINATION ANSWERS
24 OCTOBER 2023
QUESTION 1
Z hands over a written offer to sell his Rolex watch to X for R250 000. The offer is
made to X only, and it sets out all the relevant terms for a contract of sale. Z
signed the written offer as the seller. X and Y are best friends and they both sign
the same document as buyers, as they want to purchase the watch jointly. X then
hands the signed document to Z, who reads it. The next day Z finds a new
purchaser (D) who immediately pays him R300 000 cash for the same watch. Z
accepts this cash amount and hands the watch to D. When X and Y learn that Z
sold the watch to D, they approach you for legal advice. Do a detailed analysis
and application of the offer and acceptance requirements and advise X and Y if
they concluded a legally binding contract with Z. Discuss fully and refer to case
law in your answer. Do not apply the Consumer Protection Act 68 of 2008. Your
answer must not exceed two typed pages or three written
pages.
Analysis of the Offer and Acceptance Requirements
To determine if X and Y concluded a legally binding contract with Z, we need to analyze
the requirements of offer and acceptance.
Offer
An offer is a clear and unequivocal expression of willingness to enter into a contract on
specific terms. In this case, Z handed over a written offer to sell his Rolex watch to X for
R250 000. The offer was made to X only and set out all the relevant terms for a contract
of sale. Z signed the written offer as the seller.
Acceptance
Acceptance is the unqualified and unconditional agreement to all the terms of the offer.
X and Y both signed the same document as buyers, indicating their intention to
purchase the watch jointly.
Communication of Acceptance
For acceptance to be valid, it must be communicated to the offeror. In this case, X
handed the signed document to Z, who read it. However, it is unclear whether Z was
aware that both X and Y signed the document as buyers.
Revocation of Offer
, An offer can be revoked before acceptance, but the revocation must be communicated
to the offeree. In this case, Z found a new purchaser (D) and sold the watch to D for
R300 000 cash. Z accepted the cash amount and handed the watch to D. It is unclear
whether Z communicated the revocation of the offer to X and Y before selling the watch
to D.
Application and Conclusion
Based on the analysis of the offer and acceptance requirements, it can be concluded
that X and Y did not conclude a legally binding contract with Z. Although they signed the
document as buyers, it is unclear whether Z was aware of their joint intention to
purchase the watch. Additionally, it is unclear whether Z communicated the revocation
of the offer to X and Y before selling the watch to D.
To further support this conclusion, the case of Harvey v Facey can be referenced. In
this case, the court held that a mere statement of the lowest price at which the seller
would sell was not an offer but an invitation to treat. Similarly, Z’s written offer may be
seen as an invitation to treat rather than a binding offer.
Therefore, X and Y may not have a legally enforceable claim against Z for breach of
contract. However, it is advisable for X and Y to consult with a legal professional to fully
assess their rights and options in this situation.
QUESTION 2
2.1 The theory where a contract is concluded when and where the offeror learns or is
informed of the acceptance is the “Knowledge Theory.”
2.2 The theory where a contract is concluded when the letter of acceptance reaches the
address of the offeror is the “Receipt Theory.”
2.3 The theory where a contract is concluded when and where the offeree posts his or
her letter of acceptance is the “Dispatch Theory.”
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