PVL3702 ASSIGNMENT 01 SEMESTER 02 ANSWERS DUE 19 AUGUST 2024
ASSIGNMENT 01 QUESTION:
Jack is a property developer who is well known for building residential developments. He recently built cluster homes in an upmarket suburb in Cape Town. All the cluster homes are built with the same size and l...
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PVL3702 ASSIGNMENT 01 DUE 19
AUGUST 2024
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,ASSIGNMENT 01 QUESTION:
Jack is a property developer who is well known for building residential
developments. He recently built cluster homes in an upmarket suburb in Cape
Town. All the cluster homes are built with the same size and layout, and they
only differ with the positioning of each cluster in the complex. This
development is brand new, and Jack is marketing the development himself.
Jack shows Gloria a beautiful cluster home in the complex, which is next to
the guardhouse at the entrance of the complex. Gloria immediately falls in love
with this cluster home and a few days later she as the purchaser signs the
offer to purchase document presented to her by Jack, who completed all the
relevant details on the document relating to the description of the property.
The document is later also signed by Jack as the seller. However, it
subsequently turns out that the cluster home referred to in the signed
document is not the one that Gloria viewed and fell in love with. The one she
signed for and the one she viewed are different properties. In fact, the cluster
home she signed for is right at the back of the complex which she never
viewed, and which is not in the best position in the complex. Jack is of the
view that a legally binding contract was concluded with Gloria, in accordance
with the written signed document, for the cluster home described in the
document. Gloria approaches you for legal advice as she thought that she was
signing for the cluster home that was next to the guardhouse at the entrance
of the complex. Apply the will theory and the direct reliance theory and advise
Gloria whether she concluded a legally binding contract with Jack, based on
the written document that they both signed, for the cluster home described in
the document. Discuss fully and refer to case law in your answer. Do not apply
the Consumer Protection Act 68 of 2008.
, The main issue is whether there existed a legally binding contract between Jack
because Gloria believes she is purchasing property different from that described in
the signed contract. It is necessary to find out whether the presence of
misrepresentations or mistakes concerning the identification of property affects the
validity of the contract under the will theory and the direct reliance theory.
The will theory in the law of contracts places significant importance on contracts
being formed based on the common consensus or meeting of the minds of the
parties involved. The theory also postulates that for the contract to be viable in court,
there must have been consensus ad idem amongst the contracting parties as to the
nature of the contract. According to the Will theory, there is a need to dig deeper into
the subjective intentions of both Jack and Gloria when entering into the contract. The
mutual assent is the cornerstone of contract formation. If one party is mistaken about
the subject matter due to a misrepresentation or misunderstanding, this undermines
the mutual assent required for a valid contract. 1
Gloria specifically and firmly thought that she was entering into a contract for the
cluster home adjacent to the guardhouse, where the unit is located, a house she and
her husband had inspected and wanted to purchase. Jack thinks the contract
concerns the cluster home, which is described in the signed document, which is
another cluster home located at the back of the complex. In Maresky v Morkel case2,
the court asserted that for a contract to exist, both parties need to assent to the
same terms. The subjective intentions of the parties play a crucial role in determining
whether consensus was achieved. However, if one can evidence that while signing
the contract, Gloria and Jack had different intentions as to the content of the
contract, then true consensus is questionable.
In Constantia Insurance Co Ltd vs Compusource (Pty) Ltd, 3 the court reiterated the
requirement of consensus ad idem meaning that the intention to contract must
concur. Thus, the discrepancy between Jack's and Gloria’s expectations regarding
1
Hutchison & Pretorius (eds) The Law of Contract in South Africa 4th ed (2022)
Oxford, Cape Town
2
Maresky v Morkel 1994 (1) SA 249 (C).
3
Constantia Insurance Co Ltd v Compusource (Pty) Ltd 2005 (4) SA 345 (SCA).
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