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Summary LPL4801 Summarised Study Notes
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- University Of South Africa (Unisa)
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LPL4801EXAM PACK
,LPL401 8
"
#$ % Introduction to the contract of lease
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Every specific contract is a contract, which means that all the general principles of the law of contract
apply to it
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⇒ It Is the content (terms) of a contract which determines whether it is to be assigned to a specific class
of contracts or whether it is to be regarded as a contract a contract which does not fit into
any particular contract
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⇒ The essentialia are not terms that are essential for the validity of the contract, they are terms that are
essential for the classification of a contract as one of a specific type i.e. determine the category into
which a contract falls
⇒ Essentialia of a contract of sale:
1. An undertaking by the one contractant (the seller) to deliver a thing to his or her co contractant
2. An undertaking by the co contractant to pay a sum of money in exchange for the thing
⇒ Any specific contract is defined in terms of its essentialia
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⇒ The class to which a particular contract belongs determines its naturalia included in the contract by
operation of law (ex lege) need not be expressly negotiated by the parties
⇒ It is necessary to classify a contract as a specific type as this is required to determine the natural
terms of the contract.
⇒ May be excluded by agreement between the parties to a particular contract of that class
⇒ The parties are free to insert as many additional terms as the like these are called incidental terms
#$ % Definition and essential elements
3 types of letting and hiring: the hiring of services which are conducted under supervision; the hiring of a
person’s services in order to obtain the results of the labour such as building a house and the letting and
hiring of a thing which can be either movable or immovable
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It is a reciprocal agreement between one party, namely the lessor, and another party, namely the lessee,
where by the lessor binds himself or herself to give to the lessee the temporary use and enjoyment of the
thing, in return for the payment of the rent
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⇒ There are 6 absolute requirements:
1. Consensus or apparent consensus
2. The parties must have contractual capacity
3. Prescribed formalities must be complied with
4. The obligations created by the contract must be possible of performance
5. The contractual agreement must be legal
6. Performance must be determined or determinable
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1. The lessor must delivers and the lessee must receive a thing or property for the temporary use
and enjoyment of this thing or the property
2. There must be a thing or property which is being let
3. An amount of rent must be paid for the use and enjoyment of the leased thing
The parties must agree to deliver and receive a particular thing
⇒ An expression of the general requirement that performance must be possible
⇒ Supervening impossibility: where performance becomes impossible through no fault of the lessor.
Obligations are terminated.
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,LPL401 8
⇒ Prevention of performance: absolute or objective impossibility of performance where performance
is prevented permanently as regards everyone, and relative or subjective prevention of performance
where it is only performance by the debtor which is rendered impossible (breach of contract in the
form of prevention of performance
The letting and hiring of the leased thing must be temporary and not in perpetuity
⇒ A lease cannot be forever; only a contract in which the temporary use and enjoyment of the thing is
granted to one of the parties can be a lease.
⇒ The requirement that a contract of lease must be of limited duration is complied with in the following
cases: (i.e. temporary lease)
If the lease is to run for a definite period
If the lease is to run until the occurrence of an event which is sure to occur although the date
of its occurrence may be uncertain
If the lease is at the will or either the lessor or the lessee
If the lease is for an indefinite time with the rent payable periodically (in such a case the lease
may be terminated by either party by reasonable notice given to the other
The thing subject to the lease can either be corporeal or incorporeal or an object still to come into
existence
⇒ In 5 ! + # + it was argued, on the strength of + !5 , # 5 " "
5 "! " that there is no doubt that an incorporeal thing can form part of a lease
The court said, “What was let is not corporeal property but the incorporeal right to trade”. In contrast
to this case, the view had been taken in a series of previous decision that the granting of an
exclusive right to do business on certain premises is not the lease of a thing, but an innominate
contract for the granting of something similar to a personal servitude. The view that an incorporeal
thing, a right, can be hired is unconvincing. In the case of a usufructuary, it is very clearly the thing,
which is the object of the usufruct, which is being let.
The fact that the lessor is the usufructuary of the thing merely means that the lessor is able, by virtue
of his or her legally valid title, to protect the lessee in hi or her possession of the thing.
⇒ As long as the performances of the parties are ascertainable, there can be no objection to the
landlords agreeing to deliver only a portion of an existing thing e.g. A lets a flat to B
⇒ A thing that has not yet come into existence can also be let. Called a .
If the thing does not come into being, the lessor’s performance naturally becomes impossible.
⇒ An undertaking to make available a fungible (consumable) thing at a price, cannot qualify as a lease.
Letting and hiring presumes that the use and enjoyment of the thing will be made available and not
that the lessee will use up the thing
The lessee must pay rent for the leased thing
⇒ Where the counter performance for the use and enjoyment of the lease thing does not sound in
money, the contract is not one of lease.
⇒ There is one exception rural leases, where the rent is either a definite quantity or an agreed upon
portion of the produce of the leased property
#$ &% Legality of contracts of lease
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⇒ A contract is unlawful when its conclusion, performance or the reason for its existence is forbidden by
statutory or common law, or it is contrary to public policy
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Results in the contract being void and unenforceable. The onus of proving the illegality rests on the part
alleging it
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, LPL401 8
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⇒ From an immoral cause no action arises. This is an absolute rule of the law of contract and there are
no exceptions.
⇒ The court will also refuse to enforce the contract. The unlawfulness of the contract means that the
one party may not only not claim performance from the other but the unlawfulness also means that a
party who has suffered damages as a result of such a contract may not claim damages from the
other party by relying on the contract
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⇒ Where 2 parties are both guilty the one who is in possession is in the stronger position. This rule is
founded on public interest and prevents the lessee from claiming return of rent i.e. restitution.
⇒ What relief is available to the lease to the repayment of the rental?
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⇒ Because the rule sometimes operates harshly it is sometimes relaxed
⇒ Where a party to an unlawful contract has performed but his or her performance is not disgraceful, he
or she can recover that which he or she has performed from the other party.
⇒ The rule is therefore to be applies as a general rule to which an exception must be
made whenever “simple justice between man and man demands it”
#$ % The obligations of the lessor
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Study unit 5: to make available or deliver the use and enjoyment of the property
Study unit 6: to refrain from disturbing the lessee’s use and enjoyment of the property
Study unit 7: to place and maintain the property in the condition agreed upon
Study unit 8: to warrant against eviction
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⇒ Failure to fulfill an obligation is a form of breach of contract by the lessor,
⇒ Failure to deliver constitutes
⇒ Delivery of a defective performance constitutes positive malperformacne
⇒ Delivery to someone other that the contracted lessee constitutes repudiation
⇒ Failure to prevent eviction constitutes positive malperformance
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⇒ The lessor must deliver the thing at the agreed time and place. He must make it available to the
lessee. The delivery must be such that the lessee obtains the of the thing.
⇒ The lessor must also deliver everything without which the thing cannot be used properly
⇒ Who the lessee is in the case where the lessor lets the same object to two different parties but
establishes neither in possession of the object. Who should be considered the actual lessee?
→ A, the lessor, enters into a contract of lease with B, in terms of which B rents A’s thing but,
before B takes possession, A leases the same thing to C.
→ If C is not in possession and at the time of contracting with A, he was aware of the contract
between A and B, the original lessee’s (B) right prevails. B can thus prevent A from delivering
the object to C, by means of an interdict
→ Where C contracted with A some jurists consider the
rule to apply. Accordingly, B can prevent A from putting C in possession of the thing. Other
jurists believe that C should be given possession. Our courts follow the view that the
rule is applicable and that B can prevent A from giving C possession, by
means of an interdict
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