An agreement entered into by two or more persons with the intention of creating a legal obligation or obligations
Contract
It is a juristic act - an act to which the law attaches the consequences intended by the parties
It is necessarily bilateral or multilateral - there must be at least two parties to an agreement
It entails promises or undertakings on one or both sides
Most contracts entail reciprocity - one party's performance is promised in exchange for the other party's performance
The modern concept of contract is a generalised one - an agreement does not have to be of a specific type to qualify as a contract
All contracts are consensual - based on an agreement of some sort
All contracts are bonae fidei - the parties are required to conduct their relationship in a manner consistent with good faith
Obligation
A legal bond (vinculum iuris) between two or more persons, obliging the one (the debtor) to give, do, or refrain from doing something to or for the other (the creditor)
Delict
A wrongful act that gives rise to an obligation to compensate the injured party
Enrichment
A situation where one person is unjustly enriched at the expense of another
Contract forms part of the law of obligations, which also includes delict and enrichment
The law of contract is part of private law
An obligation comprises a right and a corresponding duty
Contracts can create, discharge or transfer obligations
Legally binding agreements can be obligationary, absolving or real (transfer) agreements
Obligationary agreements are contracts, absolving agreements discharge obligations, and real agreements transfer rights
Marriage and judgments by consent are legally binding agreements that are more than just contracts
Agreements with public bodies or organs of state straddle the divide between public and private law
Requirements for a valid contract: consensus, capacity, formalities, legality, possibility, certainty
The process of contracting is largely informal today, with most contracts concluded orally or tacitly without formality
Contract
A legal bond (vinculum iuris) between two or more persons, obliging the one (the debtor) to give, do, or refrain from doing something to or for the other (the creditor)
An obligation comprises a right and a corresponding duty: the right of the creditor to demand a performance by the debtor, and the duty of the debtor to make that performance
Each party to a contract is usually both debtor and creditor
Most contracts create not one but many obligations, with each party being obliged to make a performance in return for the other party's counter-performance
Personal right (ius in personam)
A right that lies in the relationship between persons, as opposed to a real right (ius in rem) which lies directly in the thing owned and prevails against the world at large
Civil obligation
An obligation that is enforceable by action in a court of law
Natural obligation
An obligation that is unenforceable, but does have certain legal consequences
Primary sources of obligations
Contract
Delict
Unjustified enrichment
Negotiorum gestio
Family relationships
Wills
Statutes
Delict
Wrongful and blameworthy conduct that causes harm to a person
The essential difference between contractual and delictual obligations is that the former are voluntarily assumed by the parties themselves, whereas the latter are imposed by law, irrespective of the will of the parties
The same conduct might constitute both a delict and a breach of contract
The mere fact that the conduct constitutes a breach of contract does not necessarily mean that the conduct is wrongful for the purposes of imposing delictual liability - the conduct must infringe a right of the plaintiff that exists independently of the contract
Unjustified enrichment
A shift of wealth from one person's estate to another's without a good legal ground or cause for this shift
Provided that it is valid, a contract is a causa par excellence for any shift of wealth that flows from it
Where a party transfers an asset to another in performance of a contract that is invalid for some reason, or that subsequently fails, the shift in wealth is sine causa, and one or other of the enrichment actions will lie
Real rights
Rights in corporeal things, such as ownership and lesser real rights like servitudes and real securities
Personal rights
Rights arising from contract, delict or any other source of obligations, such as shares, insurance policies, beneficial interests in a trust, and pension rights
South African law adheres to the abstract rather than the causal system of transfer, so ownership will pass even if the underlying contract is invalid
No rule, no principle and no doctrine of contract law can survive unless it is consistent with the Bill of Rights and the normative framework of the Constitution
The fundamental principles of our law of contract are those expounded by the Dutch institutional writers, with roots in Roman law, but the modern notion of contract differs fundamentally from the Roman one
Roman law had a law of contracts, rather than of contract, and never developed a fully generalised theory of contract - it recognised a number of distinct categories of contract
Only in the case of the consensual contracts (sale, lease, partnership and mandate) was mere agreement sufficient to create a contract in Roman law