Summary
Summary KTR211- law of Contracts 211 - Nature AND Basis OF Contractual Liability
- Course
- KTR211- law of Contracts
- Institution
- University Of Pretoria (UP)
KTR211- law of Contracts 211 - Nature AND Basis OF Contractual Liability
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lOMoARcPSD|4339232Written by Lazie10
KTR211- law of Contracts 211 - Nature AND
Basis OF Contractual Liability
KTR211 law of Contracts 211 (University of Pretoria)
, lOMoARcPSD|4339232
1. Nature and Basis of Contractual Liability
1.1 Notion of a contract
A CONTRACT can be defined as:
1. An agreement;
2. Entered into by two or more persons;
3. With the intention of creating a legal obligation or obligations (the animus contrahendi).
Whether this is present is a matter of fact. Furthermore, the nature of the intention
determines the nature of the contract. This final factor explains why the following are not
contracts:
a. “Gentleman’s agreements”, as they are intended to be enforceable as a matter of
honour rather than law.
b. A “letter of intent”, as this indicates that the parties do not intend the agreement
to be legally binding.
It is important to recognise the following categories of legally binding agreements, of which not all
are contracts:
1. Obligationary agreements: These create obligations and are contracts. An example would be
a contract of lease.
2. Absolving agreements: These discharge or extinguish obligations and are contracts.
3. Real (or transfer) agreements: These transfer rights and are not contracts. This includes
traditio (the real agreement to transfer ownership) and cession agreements (the real
agreement to transfer rights).
Some legally binding agreements can be regarded as more than just contracts:
1. Marriage: It is based on agreement and does give rise to agreements. It should, however, be
regarded as a sui generis agreement conferring on the parties a status of a public nature.
What places it above ordinary contracts is the following:
a. Its primary purpose is not to create obligations.
b. It cannot be unmade by the agreement of the parties - a court order is required.
c. It has certain invariable consequences that cannot be excluded.
2. Judgment by consent: This is when parties litigating against each other agree to certain
things and ask the court to enforce the agreement. It is in substance a contract with the
added status of being a court order.
3. Agreements entered into with public bodies: Special considerations apply to contracts with
the State.
1.2 Requirements for a valid contract
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