Summary
Summary Case summaries for contract law
- Course
- Contract law
- Institution
- University Of The Witwatersrand (wits)
A full summary list of contract law cases
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Case Legal Issue Legal Principle1) George v Fairmead 1958 (2) - When will a party be “Caveat subscriptor” rule; a party will generally
SA 465 (A) bound to a contract? be bound to a written contract even if he didn’t
read it.
2) Boots Co Ltd v Somerset - Simulated contracts; is “Plus valet quad agitar quam quod simulate
West Municipality 1990 (3) SA there a real intention, concipitur”; a court must give effect to the real
216 (C) definitely ascertainable transaction and not what it purports to be. Courts
which differs from the may consider facts leading up to the contract and
simulated intention? look at any unusual provisions.
3) Church of the Province of - Is there animus “An offer, acceptance and consideration are not
Southern Africa, Diocese of contrahendi between the sufficient to create a contractual relationship
Cape town v CCMA and contracting parties? If not, giving rise to a legally enforceable obligation, it
others 2002 (3) SA 385 (LCC) agreement is not legally must be accompanied by an intention to contract”
binding or enforceable.
4) Maize Board v Jackson 2005 - Does a simulated contract “Parties may not call a contact by a name or give
(6) SA 592 (SCA) exist between parties? it a shape intended not to express, but to disguise
its true nature…in such a case a court will give
effect to the substance of the contract (real
contract) as opposed to its form (simulated
contract)” Simulated contract is not a real contract
as there’s no animus contrahendi.
5) Wessels v Swart NO 2002 - Was a valid oral “An offer and acceptance can take any form,
(1) SA 680 (T) agreement formed? unless there are prescribed formalities”. If the
plaintiff avers there is a contract, she must prove
its existence and terms. Offer and acceptance can
be express or tacit and need only adhere to
formalities if required by law or set up by the
parties.
6) Gelbuild Contractor CC v - Was the offer made with “Generally a tender or quote constitutes an offer,
Rare Woods South Africa animus contrahendi? but it is a question of fact. For a quote to
(Pty) Ltd 2002 (1) SA 886 (C) - Were the terms of the offer constitute a valid offer it must be made animo-
certain? contrahendi, i.e. with the express or implied
intention that G would be bound by R’s mere
acceptance thereof. The court will look to
objective (nature, words, surrounding
circumstances) and subjective factors to determine
animus contrahendi.
7) Pitout v North Cape - Animus contrahendi, offer “Case depends on facts. Courts will look to
Livestock Co-op Ltd 1977 (4) or tentative declaration of objective and subjective (surrounding
SA 842 (A) intent? circumstances, nature of offer and words used) to
- NB objective and conclude if undertaking was made with animus
subjective factors. contrahendi. Courts must be satisfied that the
- Outstanding matters to be parties intended the promise to constitute a
negotiated = no contract. concluded bargain on the precise terms, that no
additional terms were to be agreed upon.
8) Gelbuild Contractors CC v - Were the terms of the offer “Even if an offer is made with animus
Rare Woods SA (Pty) Ltd 2002 certain? contrahendi, its terms must also be certain”. For a
(1) SA 886 (C) sale the merx should be clearly described and the
price certain or capable of being made certain (via
formula). If the offer is not certain it’s void for
vagueness.
9) Crawley v R 1909 TS 1105 - Does an advertisement “An ad simply amounts to the announcement of
constitute a valid offer an intention to sell at the price advertised. Nothing
which can be accepted? obliges any tradesman to sell to any customer who
chooses to present himself”, therefore ad is an
invitation to the public to do business.
This extends to tenders, goods without prices and
notices.
1
,10) Carlill v Carbolic Smoke - Can an advertisement “Where an ad is worded in such a way that it
Ball Co [1893] 1 QB 256 (CA) constitute a valid offer? shows animus contrahendi and it has sufficient
detail to be complete and certain, it constitutes a
valid offer”
11) Dietrichsen v Dietrichsen - Time and place of “If a time period is not set, an offer lapses after a
1911 TPD 486 formation of contract. reasonable period”.
12) Bloom v The American - Does a valid contract exist “Acceptance must be a conscious response to the
Swiss Watch Co 1915 AD 100 where the offeree does not offer, the offeree must be aware of the offer
consciously respond to an otherwise there will be no animus contrahendi or
offer? privity of contract”.
13) Levin v Drieprok - Whether an offer made to “It is a cardinal principle of the law of contract
Properties (Pty) Ltd 1975 (2) W personally could be that a simple contractual offer made to a specific
SA 397 (A) accepted in his capacity as person could be accepted only by that person,
director of DP. therefore a purported acceptance by some other
person is ineffectual…the reason is that there is no
intention on the part of the offeror to contract with
such other person.
14) JRM Furniture Holdings v - Does an acceptance “The acceptance must be absolute, unconditional
Cowlin 1983 (4) SA 541 (W) followed by a proposal to and identical with the offer. If not, there is no
modify the contract make a contract. Court must determine whether additional
valid contract? demands form part of acceptance or are separable.
Separable = naturalia; proposal to modify
following a clear, sep acceptance.
15) A to Z Bazaars (Pty) Ltd v - Has the offeror prescribed If the offeror has prescribed a specific mode of
Minister of Agriculture 1975 any formalities of a valid acceptance, the acceptance must take this mode to
(3) SA 468 (A) acceptance? be valid.
16) McKenzie v Farmer’s Co- - How to determine whether “Courts will look to the intention of the offeror.
op Meat Industries Ltd 1922 a particular mode of They infer that the offeror has prescribed a
AD 16 acceptance is prescribed. particular mode of acceptance by the
circumstances of the case and the channel of
communication chosen by the offeror, etc.”
17) Union Spinning Mills (Pty) - Can silence or inaction of Generally, silence/inaction is not an indication of
Ltd v Paltex Dye House (Pty) the offeree be regarded as a consent. However, where it is the ordinary
Ltd 2002 (4) SA 408 (SCA) valid acceptance? practice for a merchant to send an ‘order
confirmation’ form to the customer which
includes the terms and conditions on which it does
business, the manufacturer can prescribe that
silence/non-rejection will constitute a valid
acceptance, in a long-standing business
relationship acceptance can be assumed from
silence/non-rejection.
18) Electronic - See p50. Failure to respond to an unsolicited
Communications and - Contract concluded when communication cannot amount to a valid
Transactions Act 25 of 2002 and where offeror receives acceptance.
acceptance, whether aware Receipt Theory for time and place of contract.
of it or not.
19) Dietrichsen v Dietrichsen - When is an acceptance The Information Theory is the starting point
1911 TPD 486 valid? unless there is a clear indication to the contrary.
- What theory for formation Thus acceptance must be communicated to the
of contract applies? offeror before a valid contract exists.
20) S v Henckert 1981 (3) SA - What formation theory “The information theory applies to contracts
445 (A); applies to telephone concluded telephonically”.
Tel Peda Investigation Bureau contracts?
(Pty) Ltd v Van Zyl (1965)
21) Driftwood Properties (Pty) - Does the information “The offeror may prescribe a different method of
Ltd v MckLean 1971 (3) SA theory apply when the acceptance, e.g. mere signature, and dispense with
591 (A) offeror has prescribed an the need to communicate the acceptance to the
alternative method of offeror. Here the contract is concluded when and
acceptance? where the offeree complies with the offeror’s
2
, instructions regarding method of acceptance.”
22) Cape Explosive Works Ltd - Which theory for the “Expedition theory applies for the purposes of
v SA Oil & Fat Industries Ltd formation of contracts commercial convenience and certainty. If the
1921 CPD 244 applies to postal contracts, offeror makes offer through post he implicitly
information or expedition? consents to acceptance through post so that the
- Exception: Unless contract is concluded when and where the
indication to the contrary. acceptance is posted/transmitted to offeror.”
23) Yates v Dalton 1938 EDL - Which theory of formation “The expedition theory applies to contracts
177 of contracts applies to concluded by telegram”
contracts concluded by
telegram?
NB! Expedition Theory will 1) Offer and acceptance 3) Postal services functioned normally at the time
only apply to postal contracts if: were made by mail [24) [26) Bal v Van Staden 1902 TS 128]
Smeiman v Volkers 1954 4) The offeror did not indicate a different
(4) SA 170 (C)] intention [27) A to Z Bazaars (Pty) Ltd v
2) The acceptance was Minister of Agriculture 1975 (3) SA 468 (A)].
correctly addressed [25)
Levben Products Pvt Ltd v
Alexander Films 1959 (3)
SA 208 (SR)]
28) CGEE Alsthom - What happens when an “Acceptance of part of an offer can result in a
Equipments et Enterprises offer is partially accepted? binding contract on that part, provided the parties
Electriques, SA Division v - See p44. had such an intention.”
GKN Sankey (Pty) Ltd 1987
(1) SA 81 (A)
29) Hirschowitz v Moolman - What is a pactum de “A pactum de contrahendo is simply an
1985 (3) SA 739 (A) contrahendo? agreement to make a contract in the future.”
30) Brandt v Spies 1960 (4) SA - In an option contract what “If the main offer is invalid for some reason (no
14 (E) happens when the main compliance with formalities) or illegal – the
offer is invalid or illegal? option contract will fail for lack of certainty.
31) Brandt v Spies 1960 (4) SA - Whether an option contract “A verbal agreement to keep open a written offer
14 (E) must also comply with the for the sale of land is a valid option contract”
formalities prescribed by
law for the valid formation
of the substantive contract.
32) Venter v Birchholtz 1972 - (As above) “A verbal agreement to keep a written offer for
(1) SA 276 (A) the sale of land open, signed by the offeror , is
completely valid and effective” (Obiter)
33) Hischowitz v Moolman - (As above) “Where formalities are required for the main
1985 (3) SA 739 (A) contract, the same formalities are required for the
ancillary contract (the pactum de contrahendo)”
(Obiter)
34) Sommer v Wilding 1984 (3) - Can the option holder “An option holder can claim damages for breach
SA 647 (A); claim damages for breach of of an option contract and can choose whether to
Boyd v Nel 1922 AD 414 the option contract? cancel or uphold the contract.”
35) Owsianick v African - Can a pre-emption contract “A right of pre-emption must be construed
Consolidated Theatres (Pty) impose a positive duty on constrictively…a pre-emption contract does not
Ltd 1967 (3) SA 310 (A) the grantor to do something? normally place a positive duty on the grantor to do
- I.e. to make or invite an something. It simply imposes a negative duty n
offer from the grantee? the grantor to refrain from frustrating the grantee’s
rights.”
36) Soteriou v Retco Poyntons - (As above) “There was a positive duty on R to give
(Pty) Ltd 1985 (2) SA 922 (A) preference to S. the content of that positive duty is
embodied in the form of preference agreed upon.
I.e. the pre-emption agreement sets out what the
grantor must do to give preference to the grantee.”
37) Associated South African - (As above) “Whether there is a positive obligation on the
Bakeries (Pty) Ltd v Oryx & grantor depends on the wording of the contract”
Vereinigte Bäckerein (Pty) Ltd If positive = specific performance. If negative =
3
, 1982 (3) SA 893 (A) interdict.
38) Owsianick v African - Trigger events for rights of “It is advisable to describe the trigger event
Consolidated Theatres (Pty) pre-emption. clearly and with sufficient detail” and “If there’s
Ltd 1967 (3) SA 310 (A) any threat to the pre-emption agreement the
grantee can get an interdict to prevent the threat
from materializing.”
39) Soteriou v Retco Poyntons - Unreasonable offers for “The grantor cannot avoid his duty to make an
(Pty) Ltd 1985 (2) SA 922 (A) pre-emption contracts. offer by making an unreasonable offer, because he
must make a bona fidei offer. I.e. the parties must
act in good faith. If the offer is not made in good
faith, the grantor will be in breach of the pre-
emption contract.”
40) Associated South African - What happens when a “The grantee can buy the property from the
Bakeries (Pty) Ltd v Oryx & grantor has breached a pre- grantor on the same terms as the third party by his
Vereinigte Bäckerein (Pty) Ltd emption contract by selling unilateral choice. All he must do is inform the
1982 (3) SA 893 (A) the subject matter of the grantor of his decision and the grantor will have
right to a third party? no choice.
But, if ownership has already passed to third
party, grantee cannot recover it unless third party
knew of pre-emptive right (doctrine of notice).
41) Soteriou v Retco Poyntons - What is the difference “In an option agreement a firm, definitive,
(Pty) Ltd 1985 (2) SA 922 (A) between an option and a irrevocable offer is already in place. The exercise
pre-emptive contract? of the offer merely contemplates acceptance
(unilateral action) by the holder.” Pre-emption
agreement contemplates bilateral action for the
formation of the substantive contract.
42) NBS, Boland Bank v One - Is a contract void for Discretion to fix performance will only be valid if:
Berg River Drive CC; Deeb v uncertainty if it allows one 1) The discretion is to fix the other parties
ABSA Bank Ltd; Friedman v of the parties to determine performance AND,
Standard Bank of SA Ltd 1999 the performance of the other 2) The discretion is subject to arbitrio boni viri
4 SA 928 (SCA) party? (the judgement of a good person),
3) The discretion is NOT to fix a purchase price or
rental.
43) Southernport - Whether a contract to Whether agreement to negotiate in good faith is
Developments (Pty) Ltd v negotiate a second contract enforceable?
Transnet Ltd 2005 (2) SA 202 (bridging agreement) will be
(SCA) enforceable. I.e. is the first
agreement to negotiate a
valid contract?
44) Wilson v Smith 1956 (1) - Can a contract be valid “Generally such a contract would be void…
SA 393 (W) even if performance is however, if the parties foresaw the risk of
objectively impossible? impossibility and, despite this impossibility,
wanted to conclude a valid contract it may be
valid…usually the party who takes the risk of
being bound to give an impossible performance
will bargain for some sort of compensation from
the other party. Such contracts will be valid
despite the fact that one of the performances is
impossible if this is what the parties intended.”
45) Johnston v Leal 1980 (3) - What happens when “If the agreement in question is of the type
SA 927 (A) parties did not complete all contemplated by the statute, e.g. state of land, the
the clauses on a document contract in question is subject to the statutory
subject to statutory formalities. In this case, contract is of sale of land,
formalities? and according to the Act the whole contract must
- 46) Alienation of Land be reduced to writing.”
Act 68 of 1981
47) Impala Distributors v - Can a contract that is “A contract that is required by law to be in writing
Taunus Chemical required by law to be in may be cancelled orally (unless subject to a non-
Manufacturing Co (Pty) Ltd writing be cancelled and cancellation clause). However, any variation
4
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