COMMERCIAL LAW 1
LAWS1000
CHAPTERS 8, 10 & 11 SUMMARIES
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Pillay, K. and Du Plessis, R. (2023) Commercial law: Fresh perspectives. 4th edn. Cape Town, South Africa, Western Cape: Maskew Miller Learning. .
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, CHAPTER 8: Contents of a Contract
Identifying Terms by Their Role
• Term = a clause or provision in a contract, which sets out the respective rights, duties and obligations of the parties
• Contractual terms are intended to be legally binding on the parties
• When parties enter a contract, they reach agreement about the rights and obligations of each party
• This agreement sets out, in detail, exactly what the contract requires each party to do
• Three different types of terms:
1) Terms that identify a contract as a specific contract, called essentialia
2) Terms that are implied into a specific contract by law, called naturalia
3) Other terms that the parties have agreed to, called incidentalia
• Essentialia
- All contracts must follow the general principles of contract law
- BUT there are some contracts, called specific contracts, where particular terms must be included eg. Contracts
of sale and leases
- Essential terms of a contract, which identify that contract as a specific contract, are called essentialia
- Essentialia are thus the terms that must be present in a contract in order for it to be classified as a specific type of
contract
- Parties to the contract must agree on these essential terms for the contract to be considered a specific contract
- Eg. For a contract to be a valid contract of lease, there must be consensus about the following essentialia:
~ Object being leased
~ Length of the lease
~ Amount of rent payable
- Eg. For a contract of sale to be valid, there must be consensus about the following essentialia:
~ The item being sold
~ Price payable
• Naturalia
- The importance of classifying contracts is that, once a contract has been identified to be a particular specific
contract, there are terms that the law automatically reads into the contract
- These terms are naturalia of the contracts
- These clauses are implied by law
- Naturalia apply automatically to a contract even if the parties have not specifically agreed to them
- However, it is possible for the contracting parties to change naturalia by agreement
• Incidentalia
- The terms in a contract that parties have agreed to, but which are neither the essentialia or naturalia of the
contract
- These are the terms that meet the specific needs of the contracting parties
Identifying Terms by How They Become a Part of a Contract
• The second way we classify terms is by how they become a part of a contract
• Terms incorporated into a contract can be:
- Express
- Implied
- Tacit
- Imposed
