Exam (elaborations)
PVL3702- Exam Pack
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- University Of South Africa (Unisa)
PVL3702 - Exam Pack, Exam Questions and Answers
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1) TUTORIAL 2021 S1 A2 - AQuestion 1
Which statement is INCORRECT?
1 A delict constitutes a civil wrong, and in appropriate circumstances, gives rise to a duty to pay
damages.
2 In general, a delictual obligation is imposed by law, whereas a contractual obligation is voluntarily
assumed by the parties.
3 The law of contract, delict, and unjustified enrichment, do not all relate to the law of obligations.
4 In the absence of a valid contract, an unjustified enrichment claim may arise when there is a
transfer of wealth from one person’s estate to another person’s estate, without a good legal ground
or cause for this shift.
5 Sometimes, concurrent contractual and delictual liability can arise, such that the plaintiff may sue
the defendant, on either basis. (1)
Answer
3.
Discussion
Option 3 is the correct answer. See Dale Hutchison & Chris Pretorius (eds) The Law of Contract in
South Africa 3rd ed (Oxford Cape Town 2017) 8, at paragraph 1.4 where it is indicated that the law of
contract forms part of the law of obligations, and it further appears that the other branches of the
law of obligations include delict and enrichment. And towards the bottom of page 8 of this textbook,
it is indicated that the sources of obligations are contract and delict, and unjustified enrichment is
also included therein. Therefore, the law of contract, delict, and unjustified enrichment all relate to
the law of obligations. Accordingly, the statement made in option 3 above is incorrect.
It follows that all the other statements above are correct. See Dale Hutchison and Chris Pretorius
Contract 8-10.
2) TUTORIAL 2021 S1 A2 - A
Question 2
X makes an offer to sell her watch to Y for R2500. X and Y agree on 15 May that X’s offer will be open
for acceptance until 31 May. On 20 May, X informs Y that she (X) intends to sell this watch to Z on 30
May. On 21 May, Y informs X that he (Y) accepts the offer, but X refuses to sell the watch to Y. Which
statement is CORRECT?
1 An option contract was concluded between X and Y on 15 May.
2 An option contract was not concluded between X and Y.
3 From these set of facts, the only legally binding agreement concluded between X and Y occurred
on 21 May.
,4 After X informed Y on 20 May that she (X) intends to sell the watch to Z, the option contract
concluded on 15 May became null and void, but it was subsequently revived on 21 May when Y
accepted X’s offer.
5 An option contract was concluded on 21 May when Y accepted the offer, and a further contract
was concluded for the sale of the watch on this day. (1)
Answer
1.
Discussion
The statement in point 1 above is correct. Where an offer is made by a party (X) and the parties
reach an agreement that such an offer will be open for acceptance by the other party (Y) for a
specified period of time, in such an instance an option contract is concluded between these parties
(see Eiselen GTS et al Law of Contract study guide for PVL 3702 (University of South Africa) 29).
When this reasoning is applied to the facts in the question, it follows that an option contract was
concluded between the parties on 15 May. This also means that the statements in points 2, 3 and 5
above are incorrect.
The statement in point 4 above is also incorrect because the option contract never became null and
void as Y timeously exercised the option (by accepting the offer) before 31 May.
3) TUTORIAL 2021 S1 A2 - A
Question 3
X has a watch that Y likes. On 5 August, X sends a written offer by post to Y, to purchase Y’s watch
for R10000. One of the terms in the offer is that the offer will lapse on 20 August. The offer also
stipulates that X must be aware of the acceptance, for any legal obligations to arise. Y writes the
letter of acceptance on 9 August in response to X’s offer, and Y posts this written acceptance on 10
August. X’s son collects the post from the Post Office on 17 August, and amongst the sealed letters
of post collected, is Y’s acceptance. X’s son is not responsible and only hands all the sealed post to X,
on 20 August. On 21 August, X opens the post and reads the acceptance. Which theory under South
African law forms as the primary basis to apply when considering if a contract was concluded
between the parties?
1 An objective application of the reliance theory.
2 A subjective application of the reliance theory.
3 A subjective application of the will theory.
4 An objective application of the will theory.
5 A subjective application of the declaration theory. (1)
Answer
3.
Discussion
Option 3 is correct. The primary basis to conclude a contract under South African law is in
accordance with the will theory, which entails a subjective approach (Dale Hutchison and Chris
,Pretorius Contract 16). It follows that all the other options above are incorrect (see Dale Hutchison
and Chris Pretorius Contract 14-21).
4) TUTORIAL 2021 S1 A2 - A
Question 4
Assume the same facts as in question 3. Which statement(s) is/are CORRECT?
1 A valid contract was concluded between X and Y on 10 August, based on the application of the
expedition theory.
2 The correct theory to apply is the information theory, therefore a valid contract was not concluded
between X and Y.
3 The correct theory to apply is the reception theory, therefore a contract was concluded between X
and Y on 20 August.
4 The correct theory to apply is the declaration theory, therefore a valid contract was concluded on
9 August.
5 Options 1 and 2 above. (1)
Answer
2.
Discussion
For this question see Dale Hutchison and Chris Pretorius Contract 58-61.
Option 2 is correct. The question deals with when and where an acceptance takes effect. The general
rule to determine such an issue is the information theory. In accordance with this theory, the offeror
must learn of the offeree’s acceptance for the acceptance to have legal effect. And where a time
limit has been prescribed for the acceptance to take effect, the offer automatically lapses if it has
not been accepted within the prescribed time period (Dale Hutchison and Chris Pretorius Contract
56).
The information theory is the general rule, however there are exceptions to the general rule which
may apply. One such exception which may apply relates to postal contracts, in which case the
expedition theory may apply, provided that all the requirements for this exception can be proved.
From the facts given, the offer was made by post and so too was the acceptance. The postal services
appear to be operating normally as both parties appear to be receiving their post. And the contract
is of a commercial nature which relates to the sale of a watch. Whilst these requirements are met,
there is one requirement that is problematic for Y to successfully argue that the expedition theory
should apply. This requirement is that the offeror (X) must not have indicated a contrary intention,
expressly or tacitly (Dale Hutchison and Chris Pretorius Contract 61). This means that if the offeror
(X) intended or indicated either expressly or tacitly that the contract will not be concluded by post,
then the expedition theory will not apply under such circumstances to determine when and where
the acceptance takes legal effect. In this scenario presented, X did indicate a contrary indication as
the offer stipulated that X must be aware of the acceptance for any legal obligations to arise.
Therefore, the expedition theory does not apply to this question because X only became aware of
the acceptance several days after Y posted the acceptance.
, The fact that X must be aware of the acceptance for the acceptance to take legal effect, is consistent
with the information theory. And because the expedition theory as an exception does not apply, the
general rule which is the information theory has to be applied to the set of facts presented. When
this application is done the outcome is that a valid contract was not concluded between X and Y
because the offer already lapsed when X became aware of the acceptance on 21 August. Therefore
option 2 is correct and all the other options are incorrect.
5) TUTORIAL 2021 S1 A2 - A
Question 5
X has a watch that Y likes. X offers to sell her watch to Y for R10 000. Y accepts this offer, and X and Y
further agree that they will reduce their oral contract to writing and that they will both sign it (“the
writing clause”). The parties failed to reduce their contract to writing and sign it. The purpose of the
parties’ stipulation to reduce their contract to writing and have it signed was to have a written
record of their agreement merely to facilitate proof of the terms of the agreement. X insists that a
binding contract was not concluded between the parties because the writing clause was never
executed by both parties. Y believes that a binding contract was concluded. From this set of facts,
the legal dispute which is likely to arise between X and Y, relates to …
1 non-variation clauses.
2 the application of statutory formalities.
3 stipulatio alteri.
4 the expedition theory.
5 whether a formality has been prescribed by the parties. (1)
Answer
5.
Discussion
The dispute does not relate to a non-variation clause, therefore option 1 is incorrect (see Dale
Hutchison and Chris Pretorius Contract 169-170 for the application of non-variation clauses). The
question does not relate to the application of a statute therefore a statutory formality does not
apply. Accordingly, option 2 is incorrect. Stipulatio alteri relates to a contract for the benefit of a
third party which is not applicable here (see Dale Hutchison and Chris Pretorius Contract 237-240 for
a discussion of stipulation alteri). Therefore option 3 is incorrect. The expedition theory relates to
the conclusion of a contract by post which is not an issue that is disputed between X and Y (see Dale
Hutchison and Chris Pretorius Contract 59-61 for a discussion of the expedition theory). It follows
that option 4 is incorrect.
The issue disputed between the parties is whether a valid contract was formed between the parties,
despite the oral contract not being reduced to writing and signed by the parties. The issue therefore
centres around the intention of X and Y for stipulating a writing clause and whether by doing so, the
parties prescribed a formality for the creation of a legally binding contract. In this regard, see Dale
Hutchison and Chris Pretorius Contract 168-169. Therefore option 5 is correct.
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