Chapter 1

• define what is a contract

  a contract is an agreement intended to create enforceable obligation
• what is animus contrahendi

  the intention to create legally binding obligations
• what agreements are not contracts

  • jokes
  • social arrangements
  • theatrical performances
• define gentlemens agreement 


  an informal agreement in which people trust one another to do what they promised
• what is a declaration 


  an agreement that is not yet legally binding
• what are the types of agreements

  absolving, real (transfer), obligatory
• what is the nature of contracts?

  juristic or bilateral act, entails promises or undertakings, reciprocal nature of contract
• What distinguishes legally binding agreements from contracts?

  The fact that parties seriously intend their agreement to have binding legal effect does not necessarily mean that it is a contract. Not all binding agreements create obligations, some are intended to destroy or honour obligations by transferring rights.
• some agreements are intended to create obligations, but to destroy them, or to honour an obligation by transferring rights
• What are the classifications of legally binding agreements apart from contracts?

  (1) obligatory: create obligations

  (2) absolving: dissolve obligations

  (3) real (transferring)
• what are the requirements for a valid contract

  consensus

  capacity

  formalities

  legality

  possibility

  certainty
• Contract

  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 process of contracting is by and large an informal one - most contracts are concluded orally or tacitly without any formality
• Requirements for a valid contract

  • Consensus - the minds of the parties must meet on all material aspects
  • Capacity - the parties must have the necessary capacity to contract
  • Formalities - where required, the agreement must be in a certain form
  • Legality - the agreement must be lawful
  • Possibility - the obligations undertaken must be capable of performance
  • Certainty - the agreement must have a definite or determinable content

  
• 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)
• Contract

  Forms part of the law of obligations, which also includes delict and enrichment
• Delict

  A wrongful act that causes harm to another person, giving rise to an obligation to compensate the victim
• Enrichment

  A situation where one person is unjustly enriched at the expense of another, giving rise to an obligation to make restitution
• Agreements with public bodies or organs of state present special difficulties as they straddle the divide between public and private law
• The Constitution requires that all administrative action must be lawful, reasonable and procedurally fair, which frames the contractual relationship with the state
• Even if one or more of the requirements for a valid contract are absent, so that the contract fails, it is common practice to describe the agreement as 'an invalid contract'
• Posit, in order to qualify as a contract, there is freedom of contract, which means that parties can agree to anything that is possible and lawful
• All contracts are consensual, in the sense of being based on an agreement of some sort, and are bonae fidei, in that the parties are required to conduct their relationship in a manner consistent with good faith
• Contract

  Part of private law and the law of obligations
• 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)

  The right created by an obligation, binding only the parties to it
• Real right (ius in rem)

  The right of ownership, 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

  
• Within limits, contracting parties are free to determine the nature and content of the obligations that regulate their relationship
• 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
• Property (in the narrower sense)

  Material things (corporeals), such as a book, a car or a farm